Peragis Inc. - s. 144
Headnote
Section 144 - application for partial revocation of cease trade order - issuer cease traded due to failure to file with the Commission and send to shareholders annual and interim financial statements -- issuer has applied for a partial revocation of the cease trade order so as to permit the issuer to convert certain existing indebtedness into common shares, to proceed with a limited financing to allow the issuer to bring its continuous disclosure up to date and to provide working capital, and to consolidate share capital -- potential investors to receive copy of cease trade order and partial revocation order -- partial revocation granted subject to conditions.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am., s. 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
PERAGIS INC.
ORDER
(Section 144)
WHEREAS the securities of Peragis Inc. (the "Applicant") are subject to a temporary cease trade order dated July 10, 2001 made pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, as extended by a further order dated July 24, 2001 made pursuant to subsection 127(8) of the Act, ordering that trading in securities of the Applicant cease (collectively, the "Cease Trade Order");
AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the "Commission") pursuant to section 144 of the Act for an order varying the Cease Trade Order;
AND WHEREAS the Applicant has represented to the Commission that:
(a) The Applicant was incorporated pursuant to the provisions of the Business Corporations Act (Saskatchewan) on August 13, 1987 and continued under the Canada Business Corporations Act (Canada) ("CBCA") in 1996. The Applicant was struck from the register on October 4, 2005. Pursuant to Articles of Revival, the Applicant was revived under the CBCA on May 3, 2007 as evidenced by a Certificate of Revival dated May 3, 2007.
(b) The registered and records office of the Applicant is c/o Suite 730, 1015 -- 4th Street SW, Calgary, Alberta T2R 1J4. The Applicant's head office will be relocated to Calgary, Alberta.
(c) The Applicant is a reporting issuer in Alberta, British Columbia, Saskatchewan and Ontario.
(d) As a result of the Applicant's failure to file annual audited financial statements for the year ended December 31, 2000 and unaudited interim financial statements for three month period ended March 31, 2001, the British Columbia Securities Commission ("BCSC") issued a cease trade order on June 22, 2001, the Commission issued the Cease Trader Order, the Saskatchewan Financial Services Commission ("SFSC") issued a cease trade order on July 10, 2001, and the Alberta Securities Commission ("ASC") issued a cease trade order on July 20, 2001. The Applicant has filed applications with each of the Commission, BCSC, SFSC and ASC for a partial revocation of their cease trade orders.
(e) The Applicant was listed on the CDNX (now the TSX Venture Exchange) until April 21, 2001, at which time the Applicant was delisted from the CDNX.
(f) The Applicant has an authorized share capital of an unlimited number of common shares ("Common Shares") and an unlimited number of Class B preferred shares of which 14,987,061 Common Shares are currently issued and outstanding and no Class B preferred shares are outstanding. All previously issued warrants and stock options have expired.
(g) The Applicant last filed audited financial statements for the year ended December 31, 1999 and interim financial statements for the nine month period ended September 30, 2000.
(h) The Applicant's business failed in 2001 as a result of financial difficulties and the Applicant's continued inability to raise additional capital. As a result, the Applicant has not been able to prepare, file, or deliver any subsequent financial statements and related Management's Discussion & Analysis. The Applicant is also in default of the requirement to file the certifications required under Multilateral Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings. Apart from the foregoing, the Applicant is not to its knowledge, in default of any requirements of the Act or the rules and regulations made pursuant thereto.
(i) In order to reactivate, the Applicant seeks a partial revocation of the Cease Trade Order to allow it to:
i) convene an annual and special shareholders meeting to obtain shareholder approval for: (i) consolidation of the Applicant's share capital on a 1:14.987061 basis; (ii) continuance into Alberta under the Business Corporations Act (Alberta); (iii) name change; (iv) change of business; (v) election of directors; (vi) change of auditors; and (vii) approval of audited financial statements from 2004 onwards;
ii) complete a private placement of up to 3,000,000 units ("Units") at a price of $0.10 per Unit for aggregate gross proceeds of up to $300,000 (the "Private Placement"); and
iii) issue 12,056,490 Common Shares in satisfaction of $1,055,649 (Cdn.) in historical debts and $150,000 in legal fees incurred to date (and to be incurred) in connection with the reorganization of the Applicant (the "Debt Settlement").
Each Unit shall consist of one Common Share and one Common Share purchase warrant. Each Common Share purchase warrant will entitle the holder thereof to acquire one Common Share at a price of $0.10 per Common Share within 24 months of the date of issue. The trades are expected to take place in British Columbia, Alberta, Saskatchewan, Ontario, and certain states in the United States. The details of the proposed Debt Settlement are as follows:
The proceeds from the Private Placement shall be used as follows:
(j) The Applicant will issue the Units in respect of the Private Placement pursuant to the accredited investor exemption under section of 2.3 of National Instrument 45-106 -- Prospectus and Registration Exemptions and the Common Shares in respect of the Debt Settlement pursuant to the securities for debt exemption under section 2.14 of the same instrument.
(k) The Applicant reasonably believes that it will have sufficient resources upon completion of the Private Placement and Debt Settlement to complete its required continuous disclosure documents, pay all outstanding fees owed to the ASC, BCSC, SFSC, and the Commission, prepare and mail an information circular for an annual and special meeting of shareholders, and fund project investigation costs.
(l) The Applicant cannot complete the mailing of its information circular for an annual and special shareholders meeting, any consolidation of share capital approved at the annual and special shareholders meeting, the Private Placement or Debt Settlement without a partial revocation of the Cease Trade Order
(m) Upon completion of the Private Placement, Debt Settlement, preparation of continuous disclosure documents, and identification or acquisition of a suitable business, the Applicant intends to apply to the Commission, SFSC, ASC, and BCSC for full revocation of the cease trade orders, while concurrently applying for a listing on the TSX, TSX Venture Exchange, or CNQ, as the case may be.
(n) Other than the Cease Trade Order, the Applicant has not previously been subject to a cease trade order by the Commission.
(o) Prior to the completion of the Private Placement and Debt Settlement, each participant in the Private Placement and Debt Settlement will receive:
(i) a copy of the Cease Trade Order;
(ii) a copy of this order; and
(iii) written notice that the Applicant's securities, including any and all securities issued pursuant to the Private Placement and Debt Settlement, will remain subject to the Cease Trade Order following the completion of the Private Placement and Debt Settlement and the Cease Trade Order may remain in effect for the fullness of time.
Each participant in the Private Placement and Debt Settlement will be required to acknowledge in writing the receipt of these three documents from the Applicant.
AND WHEREAS considering this application and the recommendation of the staff of the Commission;
AND WHEREAS the Director being satisfied that it would not be prejudicial to the public interest to partially revoke the Cease Trade Order;
IT IS ORDERED under section 144 of the Act that the Cease Trade Order is partially revoked solely to permit trades in securities of the Applicant that are necessary to complete the mailing of an information circular for an annual and special shareholders meeting, any consolidation of Applicant's share capital approved at such meeting, the Private Placement, and the Debt Settlement, provided that:
(a) The Applicant will obtain and provide to the Commission signed and dated acknowledgements from all participants in the Private Placement and Debt Settlement, which clearly state that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future;
(b) The Applicant will provide a copy of the Cease Trade Order and this order to all participants in the Private Placement and the Debt Settlement;
(c) This order will terminate on the earlier of
(i) the closing of the Private Placement; and
(ii) 365 days from the date hereof.
DATED April 8th, 2008.