Reef Resources Ltd. – s. 144

September 23, 2022

Order

Headnote

Application by an issuer for a revocation of a cease trade order issued by the Commission -- cease trade order issued because the issuer failed to file certain continuous disclosure documents 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., s. 144.

National Policy 12-202 Revocation of Certain Cease Trade Orders.

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED (the Act) AND IN THE MATTER OF REEF RESOURCES LTD. (the Applicant)

ORDER (Section 144 of the Act)

WHEREAS the securities of the Applicant are subject to a cease trade order dated December 23, 2013 made by the Director of the Ontario Securities Commission (the Commission) under paragraph 2 of subsection 127(1) of the Act (the Ontario Cease Trade Order), directing that all trading in the securities of the Applicant cease until the Ontario Cease Trade 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 WHEREAS the Applicant has applied to the Commission pursuant to section 144(1) 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 is a corporation that was incorporated pursuant to the Business Corporations Act (Alberta) on November 26, 1996.

2. The Applicant's head office is located at 1220, 700 4th Ave SW Calgary, Alberta, T2P 3J4 and its registered office is located at 1250, 639 -- 5th Avenue SW, Calgary, Alberta, T2P 0M9.

3. The Applicant is a reporting issuer in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia (collectively, the Reporting Jurisdictions). The Applicant is not a reporting issuer in any other jurisdiction in Canada. The Applicant's principal regulator is the Alberta Securities Commission (ASC).

4. The authorized capital of the Applicant consists of an unlimited number of common shares (Common Shares) and an unlimited number of preferred shares (Preferred Shares). As at the date hereof, 70,500,082 Common Shares and no Preferred Shares are issued and outstanding. The Applicant has also issued and outstanding debentures having an aggregate principal amount of $250,000. The Debentures are unsecured, non-convertible, bear interest of 10% per annum and mature one year from the date of issuance. There are no securities issued and outstanding as of the date hereof that are convertible into or that give any person the right to acquire any securities of the Applicant.

5. No securities of the Applicant are traded in Canada or any other country on a marketplace as defined in National Instrument 21-101 -- Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

6. The Applicant was a natural resources issuer with non-producing oil and gas assets located in Huron County, Ontario until it recently sold these assets to Levant Exploration and Production Corp. Since the sale of its assets, the Applicant has ceased to carry on an active business. The Applicant intends to engage in a process of identifying and evaluating potential business opportunities.

7. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file its audited annual financial statements for the year ended July 31, 2013 and accompanying management's discussion and analysis (MD&A), within the timeframe required under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and certifications (NI 52-109 Certificates) of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the 2013 Annual Disclosure).

8. Subsequent to the failure to file the Unfiled Documents, the Filer also failed to file the following documents in accordance with the requirements of Ontario securities laws:

(a) audited annual financial statements, accompanying MD&As and NI 52-109 Certificates for the years ended July 31, 2014 through to July 31, 2021 as required under NI 51-102;

(b) unaudited interim financial reports, accompanying MD&As and NI 52-109 Certificates for the interim periods ended October 31, 2013 through to April 30, 2022, with the exception of unaudited interim financial reports, accompanying MD&As and NI 52-109 Certificates for the interim periods ended January 31, 2019 and January 31, 2022, as required under NI 51-102;

(c) the disclosure required by Form 51-102F6V Statement of Executive Compensation -- Venture Issuers (Form 51-102F6V) for the years ended July 31, 2013 through to July 31, 2021;

(d) the disclosure required by Form 52-110F2 Disclosure by Venture Issuers (Form 52-110F2) for the years ended July 31, 2013 through to July 31, 2021; and

(e) the disclosure required by Form 58-101F2 Corporate Governance Disclosure (Venture Issuers) (Form58-101F2) for the years ended July 31, 2013 through to July 31, 2021.

9. The 2013 Annual Disclosure and subsequent filings were not filed in a timely manner as a result of the Applicant's financial difficulties.

10. The Applicant is also subject to the cease trade orders from the British Columbia Securities Commission, the Manitoba Securities Commission and the ASC (collectively, the Other Cease Trade Orders and, together with the Ontario Cease Trade Order, the Cease Trade Orders). The Applicant applied for revocations of the Other Cease Trade Orders concurrently with the application for the full revocation of the Ontario Cease Trade Order.

11. Since the issuance of the Ontario Cease Trade Order, the Applicant has prepared and filed the following documents in the Reporting Jurisdictions:

(a) audited annual financial statements, accompanying MD&As and NI 52-109 Certificates for the years ended July 31, 2017, July 31, 2018, July 31, 2020 and July 31, 2021;

(b) unaudited interim financial reports, accompanying MD&As and NI 52-109 Certificates for the interim periods ended October 31, 2018, April 30, 2019, October 31, 2021 and April 30, 2022;

(c) the disclosure required by Form 51-102F6V for the years ended July 31, 2017, July 31, 2018 and July 31, 2021;

(d) the disclosure required by Form 52-110F2 for the years ended July 31, 2018 and July 31, 2021; and

(e) the disclosure required by Form 58-101F2 for the years ended July 31, 2018 and July 31, 2021.

12. The Applicant has not filed:

(a) audited annual financial statements, accompanying MD&As and NI 52-109 Certificates for the years ended July 31, 2013 through to July 31, 2016 and for the year ended July 31, 2019;

(b) unaudited interim financial reports, accompanying MD&As and NI 52-109 Certificates for the interim periods ended October 31, 2013 through to April 2021, with the exception of unaudited interim financial reports for the interim periods ended October 31, 2018, January 31, 2019 and April 30, 2019;

(c) the disclosure required by Form 51-102F6V for the years ended July 31, 2013 through to July 31, 2016 and for the years ended July 31, 2019 and July 31, 2020;

(d) the disclosure required by Form 52-110F2 for the years ended July 31, 2013 through to July 31, 2017, and for the years ended July 31, 2019 and July 31, 2020; and

(e) the disclosure required by Form 58-101F2 for the years ended July 31, 2013 through to July 31, 2017, and for the years ended July 31, 2019 and July 31, 2020;

(collectively, the Outstanding Filings) and has requested that the Commission exercise its discretion, in accordance with sections 6 and 7 of National Policy 12-202 Revocation of Certain Cease Trade Orders, to elect not to require the Applicant to file the Outstanding Filings.

13. Except for the failure to file the Outstanding Filings, the Applicant is (i) up-to-date with all of its continuous disclosure obligations; (ii) is not in default of any of its obligations under the Cease Trade Orders; and (iii) is not in default of any requirements under the Act or the rules and regulations made pursuant thereto.

14. As of the date hereof, the Applicant's profiles on the System for Electronic Document Analysis and Retrieval (SEDAR) and the System for Electronic Disclosure by Insiders (SEDI) are current and accurate.

15. 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.

16. The Applicant is not considering, nor is it involved in any discussion relating to, a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

17. Since the issuance of the Cease Trade Orders, there have not been any material changes in the business, operations or affairs of the Applicant that have not been disclosed to the public.

18. The Applicant held an annual general and special meeting of its shareholders on June 23, 2022. In connection with the shareholders meeting, the Applicant prepared a notice of meeting and management information circular, which was mailed to shareholders and filed on SEDAR on May 27, 2022.

19. Upon the issuance of this revocation order and concurrent revocations of the Other Cease Trade Orders, the Applicant will issue a news release announcing the revocation of the Cease Trade Orders and concurrently file the news release and a related material change report on SEDAR.

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

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED pursuant to section 144 of the Act that the Ontario Cease Trade Order is revoked .

DATED at Toronto, Ontario on this 23rd day of September, 2022.

"David Surat"

Manager, Corporate Finance

Ontario Securities Commission

OSC File #: 2022/0252