Chippery Chip Factory Inc. - s. 83

Headnote

Issuer filed and obtained a receipt for a final prospectus relating to a proposed initial public offering of common shares -- prospectus was subsequently withdrawn prior to closing of offering -- no securities were distributed under the prospectus -- as a consequence of obtaining a receipt for the prospectus, issuer became a reporting issuer -- issuer seeking an order that it be deemed to have ceased to be a reporting issuer -- issuer obtaining shareholder approval to make application - issuer deemed to have ceased to be a reporting issuer.

Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am., s. 83.

IN THE MATTER OF

THE SECURITIES ACT R.S.O. 1990, CHAPTER S.5,

AS AMENDED ("THE ACT")

AND

IN THE MATTER OF

THE CHIPPERY CHIP FACTORY INC.

ORDER

(Section 83)

WHEREAS the Ontario Securities Commission (the "Commission") has received an application from The Chippery Chip Factory Inc. (the "Applicant") for an order pursuant to Section 83 of the Act deeming the Applicant to have ceased to be a reporting issuer for the purposes of Ontario securities law;

AND WHEREAS the Commission has considered the application and the recommendation of its staff;

AND WHEREAS the Applicant has represented to the Commission as follows:

1. On September 17, 1997, the Applicant was incorporated under the Canada Business Corporations Act ("CBCA") as The Chippery Chip Factory Inc.

2. The authorized capital of the Applicant consists of an unlimited number of common shares ("Common Shares") and preference shares of which 17,235,903 Common Shares are issued and outstanding and nil preference shares are issued and outstanding.

3. The Applicant has been a reporting issuer in the province of Ontario since March 17, 1998, the date on which it received a receipt from the Commission for a final prospectus in connection with an initial public offering of Common Shares. The Applicant did not close the public offering and no securities were issued under the final prospectus.

4. The Applicant's securities have never been listed on any stock exchange or trading or quotation system.

5. The Applicant is not currently a reporting issuer or the equivalent in any jurisdiction in Canada other than Ontario.

6. The Applicant is not on the list of defaulting reporting issuers maintained pursuant to the Act and the Applicant is not in default of any of its obligations as a reporting issuer.

7. As at the date hereof, there are only 35 registered holders and approximately 45 beneficial holders of Common Shares. All of the Applicant's shareholders acquired their Common Shares pursuant to prospectus exemptions under the Act.

8. Of the 35 registered shareholders, 29 have an address in Ontario.

9. The Applicant has no securities, including debt securities, outstanding other than the Common Shares.

10. The Applicant does not intend to seek public financing by way of an issue of securities.

11. On June 26, 2003, at an annual and special meeting of the shareholders of the Applicant, a majority of the shareholders of the Applicant approved a resolution authorizing the Applicant to make this application. Prior to the meeting, the shareholders were provided with an information circular which disclosed that if the Applicant ceased to be a reporting issuer, it would no longer be required to comply with the continuous disclosure requirements under the Act. In addition, the information circular disclosed that if the Applicant ceased to be a reporting issuer, there would be strict restrictions that would apply to the sale of Common Shares and that some shareholders of the Applicant who otherwise had "free trading" shares would now hold shares that were subject to resale restrictions. 61% of the outstanding Common Shares were voted at the shareholder's meeting on June 26, 2003. 100% of these votes were in favour of a resolution authorizing the Applicant to make this application.

AND WHEREAS the Commission is satisfied that granting this order would not be prejudicial to the public interest;

IT IS ORDERED under Section 83 of the Act that the Applicant is deemed to have ceased to be a reporting issuer for the purposes of Ontario securities law.

April 23, 2004.