Chromos Molecular Systems Inc. - s. 144

Headnote

Application by an issuer for an order revoking a cease trade order made by the Commission - cease trade order issued as a result of the issuer's failure to file certain continuous disclosure documents required by Ontario securities law - defaults subsequently remedied by bringing continuous disclosure filings up-to-date - cease trade order revoked.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127, 144.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.0. 1990, CHAPTER S.5, AS AMENDED

(the Act)

AND

IN THE MATTER OF

CHROMOS MOLECULAR SYSTEMS INC.

ORDER

(Section 144)

WHEREAS a Director of the Ontario Securities Commission (the Commission) issued a temporary cease trade order dated April 17, 2007 pursuant to paragraph 2 and paragraph 2.1 of subsection 127(1) and subsection 127(5) of the Act, as extended by an order dated April 27, 2007 (together, the Ontario Cease Trade Order) pursuant to paragraph 2 and paragraph 2.1 of subsection 127(1) of the Act, which provided that all trading in and all acquisitions of the securities of Chromos Molecular Systems Inc. (the Applicant), whether direct or indirect, shall cease until further order by the Director;

AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act for a revocation of the Ontario Cease Trade Order;

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant is a company incorporated under the laws of the Province of British Columbia, with its head office located in North Vancouver, British Columbia.

2. The Applicant is a reporting issuer in all of the provinces and territories of Canada.

3. The authorized share capital of the Applicant consists of an unlimited number of common shares (the Common Shares) of which 88,650,182 Common Shares are issued and outstanding. The Applicant also has outstanding the convertible debenture described in paragraph 12 below.

4. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file audited annual financial statements for the year ended December 31, 2006, management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2006 and the annual information form for the year ended December 31, 2006 as required under National Instrument 51-102 Continuous Disclosure Obligations (the Continuous Disclosure Documents).

5. The Continuous Disclosure Documents were not filed as a result of the Applicant's financial situation at the time.

6. On April 11, 2007, the Applicant filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act (Canada) (the Proposal).

7. In July 2007, the Applicant filed the Proposal to its unsecured creditors to settle all of its financial obligations that had arisen prior to April 11, 2007. At a meeting of unsecured creditors held on August 14, 2007, the unsecured creditors endorsed the Proposal and on August 23, 2007, the Supreme Court of British Columbia in Bankruptcy approved the Proposal.

8. On October 2, 2007, the Applicant sold certain assets. Proceeds from the asset sales were used to repay all amounts owing to secured creditors and, in accordance with the Proposal, all amounts owing to unsecured creditors.

9. On April 11, 2007, the Toronto Stock Exchange suspended trading in the Common Shares of the Applicant and on May 8, 2008, delisted the Common Shares of the Applicant.

10. No securities of the Applicant are listed or traded on any stock exchange or market in Canada or elsewhere.

11. The Applicant has been subject to a cease trade order issued by (i) the British Columbia Securities Commission (BCSC) dated April 13, 2007 for failure to file the Continuous Disclosure Documents (the B.C. Cease Trade Order); (ii) the Alberta Securities Commission dated July 19, 2007 for failure to file audited annual financial statements for the year ended December 31, 2006 and interim unaudited financial statements for the interim period ended on March 31, 2007 (the Alberta Cease Trade Order); (iii) the Manitoba Securities Commission dated February 13, 2008 for failure to file audited annual financial statements for the year ended December 31, 2006 and management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2006 (the Manitoba Cease Trade Order); and (iv) the Autorité des marchés financiers dated April 27, 2007 for failure to file audited annual financial statements for the year ended December 31, 2006 and management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2006 (the Quebec Cease Trade Order).

12. On November 8, 2007, the Applicant applied to the BCSC for a partial revocation of the B.C. Cease Trade Order, in order to permit the Applicant to issue a $400,000 convertible debenture, the proceeds of which were used to fund the preparation of the Continuous Disclosure Documents and the reorganization of the Applicant. The partial revocation order was granted by the BCSC on November 22, 2007 and the debenture was issued on February 12, 2008.

13. Other than the Ontario Cease Trade Order, the B.C. Cease Trade Order, the Alberta Cease Trade Order, the Manitoba Cease Trade Order and the Quebec Cease Trade Order (collectively, the Cease Trade Orders), the Applicant has not previously been subject to a cease trade order.

14. Each of the Cease Trade Orders have been concurrently revoked as of the date hereof.

15. Since completion of its bankruptcy proceedings, the Applicant has prepared and filed all of the Continuous Disclosure Documents through SEDAR (such documents were filed on February 18, 2008 and April 10, 2008).

16. The Applicant is up-to-date with its other continuous disclosure obligations and has paid all outstanding fees to the Commission, including all applicable activity and participation fees and late filing fees.

17. The Applicant's SEDAR and SEDI profiles are up-to-date.

18. Except for the Ontario Cease Trade Order, the Applicant is not in default of any of its obligations as a reporting issuer under the Act or the rules and regulations made pursuant thereto.

19. The Applicant is currently in the process of reviewing its remaining business assets (which include the REM technology, certain rights to use the ACE System for gene therapy and transgenics, and its approximately 29% shareholdings in Agrisoma Biosciences Inc.) to develop a strategic plan for continued operations for the longer term.

20. The Applicant has filed an amended notice of meeting and record date to hold an annual and special meeting of shareholders on August 21, 2008 to: (a) receive the Applicant's consolidated financial statements for the fiscal year ended December 31, 2007 and the report of the auditors thereon together with the related management's discussion and analysis; (b) fix the number of directors of the Applicant for the ensuing year at three; (c) elect three directors to hold office until the close of the next annual meeting; (d) appoint the auditors of the Applicant to hold office until the close of the next annual meeting; and (e) transact such further and other business as may properly come before the meeting. The mailing of the Applicant's meeting materials is expected to take place on or about July 25, 2008, at which time, such meeting materials will be filed on SEDAR.

21. Upon the issuance of this revocation order, the Applicant will issue and file a news release and a material change report on SEDAR.

AND UPON considering the application and the recommendation of the staff of the Commission;

AND WHEREAS the Director is satisfied that it would not be prejudicial to the public interest to revoke the Ontario Cease Trade Order,

IT IS ORDERED, pursuant to section 144 of the Act, that the Ontario Cease Trade Order is revoked.

DATED at Toronto this 22nd day of July, 2008.