PharmaCielo Ltd. – s. 1(11)(b)

Headnote

Subsection 1(11)(b) – Order that the issuer is a reporting issuer for the purposes of Ontario securities law – Issuer is already a reporting issuer in British Columbia and Alberta – Issuer's securities listed for trading on the TSX Venture Exchange – Continuous disclosure requirements in British Columbia and Alberta are substantially the same as those in Ontario – Issuer has a significant connection to Ontario.

Statutes Cited

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

IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990 CHAPTER S.5,
AS AMENDED
(the Act)

AND

IN THE MATTER OF
PHARMACIELO LTD.

ORDER
(Subsection 1(11)(b))

                UPON the application of PharmaCielo Ltd. (the Applicant) to the Ontario Securities Commission (the Commission) for an order pursuant to subsection 1(11)(b) of the Act that, for the purposes of Ontario securities law, the Applicant is a reporting issuer in Ontario;

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

                AND UPON the Applicant having represented to the Commission as follows:

1.             The Applicant was incorporated under the Business Corporations Act (British Columbia) as AAJ Capital 1 Corp. (AAJ) on May 30, 2017. The Applicant’s head office is located at 82 Richmond Street East, Toronto, Ontario M5C 1P1.

2.             On January 15, 2019, the Applicant completed a qualifying transaction pursuant to the policies of the TSX Venture Exchange (the TSXV) whereby 10949469 Canada Inc. (AAJ Sub), a wholly owned subsidiary of the Applicant, acquired all of the issued and outstanding common shares of PharmaCielo Ltd. (PharmaCielo Private Co), pursuant to a plan of arrangement (the Arrangement) under an arrangement agreement between the Applicant, AAJ Sub, and PharmaCielo Private Co dated August 17, 2018. Pursuant to the Arrangement, PharmaCielo Private Co and AAJ Sub amalgamated and continued as a wholly owned subsidiary of the Applicant, and the Applicant changed its name to PharmaCielo Ltd.

3.             The authorized share capital of the Applicant consists of an unlimited number of common shares (Common Shares) and an unlimited number of preferred shares (Preferred Shares). As of the date hereof, 96,442,373 Common Shares are issued and outstanding. No Preferred Shares are issued and outstanding.

4.             The Applicant has been a reporting issuer under the Securities Act (British Columbia) (the BC Act) and under the Securities Act (Alberta) (the Alberta Act) since January 30, 2018 when it was first listed on the TSXV.

5.             The Applicant is not a reporting issuer or the equivalent in any jurisdiction in Canada other than Alberta and British Columbia.

6.             The British Columbia Securities Commission is the Applicant’s current principal regulator and the Commission will be the principal regulator of the Applicant once it has obtained reporting issuer status in Ontario. Upon granting of this Order, the Applicant will amend its profile on the System for Electronic Document Analysis Retrieval (SEDAR) to indicate that the Commission is its principal regulator.

7.             The Applicant is not on the lists of defaulting reporting issuers maintained pursuant to the BC Act or the Alberta Act, and is not in default of any requirement of either the BC Act or the Alberta Act or the rules and regulations made thereunder.

8.             The Applicant is subject to the continuous disclosure requirements of the Alberta Act and the B.C. Act. The continuous disclosure requirements of the BC Act and the Alberta Act are substantially the same as the requirements under the Act.

9.             The Common Shares are listed and posted for trading on the TSXV under the trading symbol “PCLO”. The Common Shares are not traded on any other stock exchange or trading or quotation system.

10.          The Applicant is not in default of any of the rules, regulations or policies of the TSXV.

11.          The continuous disclosure materials filed by the Applicant under the BC Act and the Alberta Act are available on SEDAR. The Applicant made its first filing on SEDAR on November 1, 2017.

12.          The TSXV requires all of its listed issuers, which are not otherwise reporting issuers in Ontario, to assess whether they have a significant connection to Ontario, as defined in Policy 1.1 of the TSXV Corporate Finance Manual, and, upon first becoming aware that it has a significant connection to Ontario, to promptly make a bona fide application to the Commission to be designated a reporting issuer in Ontario.

13.          The Applicant has determined that it has a significant connection to Ontario in accordance with the policies of the TSXV. Specifically, based on the factors that: (i) as at June 3, 2019, approximately 64,565,921 of the 96,442,373 outstanding Common Shares or 66.95% are held by persons resident in Ontario; (ii) the Applicant’s mind and management is principally located in Ontario; and (iii) the Applicant’s head office is located in Ontario.

14.          The Applicant does not have a shareholder that holds sufficient securities of the Applicant to affect materially the control of the Applicant.

15.          Neither the Applicant nor any of its officers or directors has:

a.             been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority;

b.             entered into a settlement agreement with a Canadian securities regulatory authority; or

c.             been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision.

16.          Neither the Applicant nor any of its officers or directors is or has been subject to:

a.             any known ongoing or concluded investigations by a Canadian securities regulatory authority; or a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or

b.             any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

17.          None of the officers or directors of the Applicant, is or has been at the time of such event an officer or director of any other issuer which is or has been subject to:

a.             any cease trade order or similar orders or order that denied access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, within the preceding 10 years; or

b.             any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

                AND UPON the Commission being satisfied that granting this Order would not be prejudicial to the public interest;

                IT IS HEREBY ORDERED pursuant to subsection 1(11)(b) of the Act that the Applicant is a reporting issuer for the purposes of Ontario securities law.

                DATED at Toronto on this 10th day of June, 2019.

“Winnie Sanjoto”
Manager, Corporate Finance
Ontario Securities Commission