Northeastern Hotel Group Inc.
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, 144.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED
(the Act)
AND
IN THE MATTER OF
NORTHEASTERN HOTEL GROUP INC.
ORDER
(Section 144)
WHEREAS the securities of Northeastern Hotel Group Inc. (the Applicant) are currently subject to a cease trade order dated August 20, 2003 made by the Director pursuant to paragraph 2 of subsection 127 (1) and subsection 127(5) of the Act, and a further cease trade order made by the Director dated August 29, 2003 pursuant to subsection 127(8) of the Act (collectively, the Cease Trade Order) directing that trading in the securities of the Applicant cease unless revoked by a further order of revocation;
AND WHEREAS the 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 Cease Trade Order;
AND WHEREAS the Applicant has applied to the Commission for an order pursuant to Section 144 of the Act to revoke the Cease Trade Order;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant was incorporated on July 7, 1989 pursuant to the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the CBCA).
2. The Applicant's head office is located at 220 Bay Street, Suite 500, Toronto, Ontario, M5J 2W4.
3. The Applicant's authorized share capital consists of an unlimited number of common shares. The Applicant currently has 12,295,567 common shares issued and outstanding.
4. The Applicant is a reporting issuer or the equivalent under the securities legislation of the province of Ontario. The Applicant is not a reporting issuer in any other jurisdiction in Canada.
5. The common shares of the Applicant are not listed or quoted on any exchange or market in Canada or elsewhere.
6. The Applicant was listed on the Canadian Dealing Network (now TSX Venture Exchange) when it was delisted.
7. The Cease Trade Order was issued due to the failure by the Applicant to file with the Commission audited annual financial statements for the year ended March 31, 2003, as required by the Act. The Applicant also did not file annual financial statements, interim financial statements and related MD&A for subsequent periods to date. The Applicant is also in default of the requirement to file the certifications required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109).
8. The Applicant did not file the continuous disclosure documents required by the Act, NI 51-102 and NI 52-109 due to a lack of funds to pay for the preparation and, in respect of the annual financial statements, audit of year-end financial statements.
9. The Cease Trade Order was partially revoked by an order dated September 18, 2009 in order to permit the Applicant to effect a private placement (the Private Placement) of a convertible debenture (the Debenture) to a private Ontario corporation, Cardon Equities Inc., of $70,000 after purchasing all 6,235,000 of the outstanding common shares of the Applicant held by Transpacific Resources Inc. for a nominal price. Distribution of the Debenture was effected under the accredited investor exemption in section 2.3 of National Instrument 45-106 Prospectus and Registration Exemptions.
10. A special meeting of shareholders of the Applicant was held on June 18, 2009. The Applicant has not held an annual shareholders meeting since that date and is in default of the annual meeting requirements under the CBCA.
11. The Applicant has used the proceeds from the Private Placement to complete to bring its continuous disclosure record up to date.
12. The Applicant has filed:
(a) audited annual financial statements, annual MD&A and annual certificates for the fiscal years ended March 31, 2008, March 31, 2009, and March 31, 2010;
(b) unaudited interim financial statements (which include the comparatives from the prior fiscal year), interim MD&A and interim certificates for the three months ended June 30, 2010, the six months ended September 30, 2010, and the nine months ended December 31, 2010.
13. The Applicant has not filed continuous disclosure documents, including without limitation, annual financial statements, annual MD&A, annual certificates for the years ended March 31, 2003 to 2007 (collectively, the Annual Continuous Disclosure Filings). The Applicant has been inactive during this period and is of the opinion that the filings would therefore be of limited use to investors.
14. The Applicant has not filed interim financial statements, interim MD&A, and interim certificates for the periods from and including the three months ended June 30, 2003 to December 31, 2009 (the Interim Continuous Disclosure Filings).
15. Except for the failure to file the Annual Continuous Disclosure Filings and the Interim Continuous Disclosure Filings, the Applicant is not in default of any of its obligations as a reporting issuer under the Act.
16. The Filer is up-to-date with all of its other continuous disclosure obligations and has paid any outstanding participation fees, filing fees and late fees associated with those obligations owing to the Commission in connection with the disclosure documents referred to in paragraph 12 above and has filed all of the forms associated with such payments.
17. The Applicant's SEDAR and SEDI profiles are up-to-date.
18. The Applicant has undertaken to hold an annual meeting of shareholders within three months after the date of this order.
19. The Filer has not changed its business since the date of the Cease Trade Order.
20. Upon the issuance of this Order, the Applicant will issue a press release announcing the revocation of the Cease Trade Order. The Applicant will concurrently file the press release and material change report on SEDAR.
AND WHEREAS 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 Cease Trade Order;
IT IS ORDERED pursuant to section 144 of the Act that the Cease Trade Order is revoked.
Dated at Toronto, Ontario this 20th day of May, 2011.
"Michael Brown"
Assistant Manager