New Klondike Exploration Limited – s. 144
Headnote
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 -- 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 and 144.
IN THE MATTER OF THE SECURITIES ACT R.S.O. 1990, CHAPTER S.5, AS AMENDED (the Act) AND IN THE MATTER OF NEW KLONDIKE EXPLORATION LIMITED
ORDER (Section 144 of the Act)
WHEREAS the securities of New Klondike Exploration Ltd. (the Applicant) are subject to a cease trade order (the Ontario Cease Trade Order) dated April 4, 2016 issued by the Director of the Ontario Securities Commission (the Commission) pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act, it was ordered that all trading in the securities of the Applicant, whether direct or indirect, cease until the order is revoked by the Director;
AND WHEREAS the Ontario Cease Trade Order was made on the basis that the Applicant was in default of certain filing requirements under Ontario securities law as described in the Ontario Cease Trade Order and below;
AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act for a full revocation of the Ontario Cease Trade Order;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant was incorporated in the province of Ontario under the Business Corporations Act (Ontario) on February 9, 1948.
2. The Applicant's registered office is located at Suite 3400, 100 King Street West, Toronto, ON, M5K 1A4 and its head office is located at 3704 -- 88 Scott St., Toronto, ON, M5E 1X6.
3. The Applicant is a reporting issuer under the securities legislation of the provinces of Ontario, British Columbia, Quebec and Alberta. The Applicant is not a reporting issuer in any other jurisdiction in Canada. The Applicant's principal regulator is the Commission.
4. The Applicant's authorized share capital consists of an unlimited number of common shares (Common Shares). The Applicant currently has 239,581,495 Common Shares issued and outstanding. Other than the issued and outstanding Common Shares, the Applicant has no other securities, including debt securities, issued and outstanding.
5. The Applicant's securities are not listed, quoted or traded on any exchange, marketplace or other facility in Canada or elsewhere.
6. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file the following continuous disclosure materials as required by Ontario securities law:
(i) audited financial statements for the year ended November 30, 2015;
(ii) management's discussion and analysis (MD&A) relating to the audited annual financial statements for the year ended November 30, 2015; and
(iii) the certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109)
(collectively, the Unfiled Documents).
7. The Filer's failure to file the Unfiled Documents was as a result of financial difficulties.
8. In addition to the Ontario Cease Trade Order, the Applicant's securities are also subject to a cease trade order dated April 7, 2016 issued by the Executive Director of the British Columbia Securities Commission (the BCSC), pursuant to subsection 164(1) of the Securities Act (British Columbia), directing that all trading in the securities of the Applicant cease until the order is revoked by the Executive Director (the BC Cease Trade Order).
9. The Applicant's securities are also subject to a cease trade order dated April 5, 2016 and April 20, 2016 issued by the Autorité des marchés financiers (the AMF), pursuant to paragraph 3 of section 265 and section 318 of the Securities Act (Quebec), directing that all trading in the securities of the Applicant cease until the order is amended or lifted (the QC Cease Trade Order) (collectively with the Ontario Cease Trade Order, the BC Cease Trade Order and the QC Cease Trade Order, theCease Trade Orders).
10. The Cease Trade Orders are reciprocated in Alberta pursuant to section 198.1 of the Securities Act (Alberta), Alberta's statutory reciprocal order provision.
11. Subsequent to the issuance of the Cease Trade Orders, the Applicant failed to file other continuous disclosure documents with the Commission within the prescribed timeframe in accordance with the requirements of Ontario securities law, including the following:
(i) all annual audited financial statements for the years ended November 30, 2016 to November 30, 2019;
(ii) all interim unaudited financial statements for the interim periods ended February 29, 2016 to February 29, 2020;
(iii) all MD&A relating to the financial statements referred to in subparagraphs (a) and (b) above;
(iv) all certificates required to be filed in respect of the financial statements referred to in subparagraphs (a) and (b) above under NI 52-109;
(v) disclosure required by Form 51-102F6V Statement of Executive Compensation -- Venture Issuers, for the years ended November 30, 2015 to 2021;
(vi) disclosure required by Form 52-110F2 Disclosure by Venture Issuers, for the years ended November 30, 2015 to 2021; and
(vii) disclosure required by Form 58-101F2 Corporate Governance Disclosure (Venture Issuers), for the years ended November 30, 2015 to 2021.
(together with the Unfiled Documents, the Unfiled Continuous Disclosure).
12. The Applicant has concurrently applied to the BCSC and AMF for a full revocation of the BC Cease Trade Order and the QC Cease Trade Order, respectively.
13. The Applicant has now filed the following documents with the Commission:
(i) annual audited financial statements for the years ended November 30, 2015 to November 30, 2021;
(ii) interim unaudited financial statements for the interim period ended February 28, 2022, 2021 and February 29, 2020, May 31, 2022, 2021 and 2020, August 31, 2021 and 2020;
(iii) all MD&A relating to the financial statements referred to in subparagraphs (i) and (ii) above;
(iv) all certificates required to be filed in respect of the financial statements referred to in subparagraphs (i) and (ii) above under NI 52-109;
(v) disclosure required by Form 51-102F6V Statement of Executive Compensation -- Venture Issuers, for the years ended November 30, 2019, 2020 and 2021;
(vi) disclosure required by Form 52-110F2 Disclosure by Venture Issuers, for the year ended November 30, 2021; and
(vii) disclosure required by Form 58-101F2 Corporate Governance Disclosure (Venture Issuers), for the year ended November 30, 2021.
14. The Applicant has not filed the following:
(i) interim unaudited financial statements for the interim periods ended February 29, 2016 to August 31, 2019;
(ii) MD&A relating to the financial statements referred to in subparagraphs (i) above;
(iii) certificates required to be filed in respect of the financial statements referred to in subparagraphs (i) above under NI 52-109;
(iv) disclosure required by Form 51-102F6V Statement of Executive Compensation -- Venture Issuers, for the years ended November 30, 2015, 2016, 2017 and 2018;
(v) disclosure required by Form 52-110F2 Disclosure by Venture Issuers, for the years ended November 30, 2015 to 2020; and
(vi) disclosure required by Form 58-101F2 Corporate Governance Disclosure (Venture Issuers), for the years ended November 30, 2015 to 2020
(collectively, the Outstanding Filings).
15. The Applicant has filed with the Commission all continuous disclosure that it is required to file under Ontario securities law, except for the Outstanding Filings and any other continuous disclosure that the Commission elected not to require as contemplated under section 6 of National Policy 12-202 Revocation of a Compliance-related Cease Trade Order.
16. Except for the failure to file the Outstanding Filings, the Applicant is: (i) up-to-date with all of its continuous disclosure obligations, (ii) not in default of any requirements under the Act or the rules and regulations made pursuant thereto, and (iii) not in default of any of its obligations under the Cease Trade Orders.
17. As of the date hereof, the Applicant's issuer profile on the System for Electronic Document Analysis and Retrieval (SEDAR) and the issuer profile supplement on the System for Electronic Disclosure by Insiders are current and accurate.
18. As of the date hereof, the Applicant has paid all outstanding activity, participation and late filing fees that are required to be paid to the Commission and has filed all forms associated with such payments.
19. Effective May 21, 2020, each of Cybill Tsung, Can Hong (Charles) Liu and Neil Pettigrew were elected as directors of the Applicant. The reconstituted board of directors appointed Can Hong (Charles) Liu as Chief Executive Officer and Chief Financial Officer. Ms. Cybill Tsung resigned as a director on January 15, 2021 and Steven Velimirovic was appointed as a director of the Applicant. Other than the aforementioned appointments and resignations (the Appointments and Resignations), there have been no changes to the Applicant's directors or executive officers since May 21, 2020.
20. On March 31, 2021, the Applicant received a partial revocation of the Cease Trade Orders to permit the Private Placement and Debt Settlement (as defined below).
21. On May 26, 2021, the Applicant completed a non-brokered private placement for aggregate gross proceeds of $112,000 through the issuance of 112,000,000 Common Shares at a price of $0.001 per Common Share (the Private Placement). In addition, the Applicant issued 107,165,954 Common Shares at a deemed price of $0.001 per Common Share pursuant to shares-for-debt transactions related to the settlement of trade payable advances and unsecured notes in the aggregate amount of $107,165.94 (the Debt Settlement).
22. Except for the Appointments and Resignations, the Private Placement and the Debt Settlement, there have been no material changes in the business, operations or affairs of the Applicant since May 21, 2020 which have not been disclosed by news release and/or material change report and filed on SEDAR.
23. Other than the Cease Trade Orders, the Applicant has not previously been subject to a cease trade order issued by any securities regulatory authority.
24. The Applicant is not considering nor is it involved in any discussions related to, a reverse takeover, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.
25. The Applicant has given the Commission a written undertaking that:
(a) the Applicant will hold an annual meeting of shareholders within three months after the date on which the Ontario Cease Trade Order is revoked; and
(b) the Applicant will not complete
(i) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,
(ii) a reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or
(iii) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,
unless
(1) the Applicant files a preliminary prospectus and a final prospectus with the Commission and obtains receipts for the preliminary and final prospectus from the Director under the Act,
(2) the Applicant files or delivers with the preliminary prospectus and the final prospectus the documents required by Part 9 of National Instrument 41-101 General Prospectus Requirements (NI 41-101) including a completed personal information form and authorization in the form set out in Appendix A of NI 41-101 for each current and incoming director, executive officer and promoter of the Applicant, and
(3) the preliminary prospectus and final prospectus contain the information required by applicable securities legislation, including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable).
26. Upon the revocation of the Ontario Cease Trade Order, the Applicant will issue a news release and concurrently file a material change report on SEDAR announcing the revocation of the Ontario Cease Trade Order and outlining the Applicant's future plans.
AND UPON considering the application and recommendation of the staff of the Commission;
AND UPON the Director being 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, Ontario on this 22nd day of August, 2022.