Enablence Technologies Inc.
Headnote
NP 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- Application by an issuer for a revocation of a cease trade order issued by the Commission -- Cease trade order issued because the issuer had failed to file certain continuous disclosure materials required by Ontario securities law within the prescribed timeframe -- 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 amended, s. 144.
National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.
July 29, 2021
ENABLENCE TECHNOLOGIES INC.
REVOCATION ORDER Under the securities legislation of Ontario (the Legislation)
BACKGROUND
1. Enablence Technologies Inc. (the Issuer) is subject to a failure-to-file cease trade order in Ontario (the FFCTO) issued by the Ontario Securities Commission (the Principal Regulator) on June 9, 2020.
2. The Issuer has applied to the Principal Regulator under National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions (NP 11-207) for an order revoking the FFCTO.
INTERPRETATION
Terms defined in National Instrument 14-101 Definitions or in NP 11-207 have the same meaning if used in this order, unless otherwise defined.
REPRESENTATIONS
3. This decision is based on the following facts represented by the Issuer:
(a) The Issuer is incorporated under the Canada Business Corporations Act.
(b) The Issuer's head office is located at 390 March Road, Suite 119, Ottawa, Ontario, K2K 0G7, Canada.
(c) The Issuer is authorized to issue an unlimited number of common shares and an unlimited number of preferred shares. There are 641,927,418 common shares issued and outstanding as of June 9, 2020 and no preferred shares issued and outstanding.
(d) The Issuer is currently a reporting issuer in provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland (the Reporting Jurisdictions). Common shares of the Issuer are listed on the TSX Venture Exchange (the TSXV) under the symbol "ENA" or "ENA.V".
(e) The Issuer's common shares were suspended from trading on the TSXV on June 9, 2020. The Issuer intends to apply for this suspension to be lifted as soon as the FFCTO is revoked.
(f) The Issuer experienced business disruptions related to the COVID-19 pandemic, which hindered compliance with certain filing obligations pursuant to National Instrument 51-102 -- Continuous Disclosure Obligations (NI 51-102). The Issuer had planned to avail themselves of the OSC exemptions enacted in accordance with temporary blanket relief announced in March 2020 by the Canadian Securities Administrators in response to widespread business disruptions caused by the ongoing COVID-19 pandemic, but failed to file the required news release in respect of such exemption prior to the June 1, 2020 deadline as prescribed by to NI 51-102.
(g) The FFCTO was issued as a result of the Issuer's failure to file, in accordance with applicable securities laws, its unaudited interim financial statements for the three and nine months ended March 31, 2020 (Interim Financials), related management's discussion and analysis (Interim MD&A), and certification of the interim filings for the period ended March 31, 2020 (Certification) by the June 1, 2020 deadline as prescribed by NI 51-102 (collectively, the Initial Unfiled Documents).
(h) Since the issuance of the FFCTO, the Issuer also failed to file the following documents (the Subsequent Unfiled Documents) within the required timeframe:
a. audited annual financial statements for the year ended June 30, 2020 and related management's discussion and analysis;
b. unaudited interim financial statements for the three months ended September 30, 2020 and related management's discussion and analysis;
c. unaudited interim financial statements for the three and six months ended December 31, 2020 and related management's discussion and analysis;
d. all certifications by the Chief Executive Officer and the Chief Financial Officer of the Issuer with respect to the Issuer's annual and quarterly filings noted above as required by NI 52-109; and
e. the statements of executive compensation for the financial years ended June 30, 2019 and June 30, 2020.
(i) Subsequent to the FFCTO, the Issuer discovered an error that required the restating of its previously issued audited annual financial statements for the year ended June 30, 2019 (the Original 2019 Annual Financials) to reflect additional accruals for commissions related to the Issuer's continued issuance of promissory notes, an issuance of common stock and advisory fees.
(j) The Issuer's Original 2019 Annual Financials had not accrued related commissions or fees for fundraising and strategic mandates, which are payable in common shares of the Issuer (excluding any related tax amounts which are payable in cash).
(k) On September 25, 2020, the Issuer filed, together with the applicable fees the Initial Unfiled Documents.
(l) On October 1, 2020, the Issuer filed, together with the applicable fees and certifications the amended and restated financial statements for the year ended June 30, 2019 to correct the errors noted in (i), above, with respect to the Original 2019 Annual Financials.
(m) On May 12, 2021, the Issuer filed, together with the applicable fees, the Subsequent Unfiled Documents.
(n) On May 28, 2021, the Issuer filed, together with applicable fees, certifications, and related management's discussion and analysis, unaudited interim financial statements for the three and nine months ended March 31, 2021.
(o) On June 23, 2021, the Issuer filed statements of executive compensation for the financial years ended June 30, 2019 and June 30, 2020, which were noted by Staff as being outstanding.
(p) On June 24, 2021, to correct deficiencies noted by Staff, the Issuer refiled its management's discussion and analysis and related certifications for: (i) the financial year ended June 30, 2020; (ii) the three months ended September 30, 2020; (iii) the three and six months ended December 31, 2020; and (iv) the three and nine months ended March 31, 2021.
(q) The Issuer has now filed the Initial Unfiled Documents and the Subsequent Unfiled Documents in the Reporting Jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR) in accordance with NI 51-102 and NI 52-109.
(r) While the FFCTO was in effect, the Issuer received loans from four individuals to support the Issuer's working capital. The loans were facilitated by Paradigm Capital Inc., a firm registered with IIROC, and were evidenced by promissory notes. The issuance of the promissory notes may be considered to be trades contrary to the terms of the FFCTO. Paradigm Capital Inc. has notified IIROC in relation to its role in facilitating the loans and the inadvertent breach of the FFCTO.
(s) The Issuer is: (i) up-to-date with its continuous disclosure obligations; (ii) not in default of any of its obligations under the FFCTO other than as described in representations (i) and (o), above, and (iii) not in default of any requirements under applicable securities legislation or the rules and regulations made pursuant thereto in any of the Reporting Jurisdictions, except the existence of the FFCTO.
(t) The Issuer's SEDAR and System for Electronic Disclosure by Insiders (SEDI) profiles are now current and accurate in all material respects.
(u) The Issuer is not considering, nor is it involved in any discussions relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.
(v) The Issuer has paid all activity, participation and late fees that are required to be paid in the Reporting Jurisdictions and has filed all forms associated with such payments.
(w) The Issuer has provided a written undertaking to hold an annual meeting within three months after the date on which the FFCTO is revoked.
(x) Since the issuance of the FFCTO, there have not been any material changes in the business, operations or affairs of the Issuer that have not been disclosed to the public.
(y) Upon the revocation of the FFCTO, the Issuer will issue a news release announcing the revocation of the FFCTO and concurrently file the news release and a material change report.
ORDER
4. The Principal Regulator is satisfied that the order to revoke the FFCTO meets the test set out in the Legislation for the Principal Regulator to make the decision.
5. The decision of the Principal Regulator under the Legislation is that the FFCTO is revoked.