Rodocanachi Capital Inc. – s. 144
Headnote
Section 144 of the Securities Act (Ontario) -- application for partial revocation of a cease trade order -- issuer cease traded due to failure to file interim financial statements with the Commission -- issuer has applied for partial revocation of the cease trade order to permit the issuer to proceed with a private placement with accredited investors (as such term is defined in National Instrument 45-106 Prospectus and Registration Requirements) resident in Alberta, BC, Ontario and Quebec -- issuer will use proceeds from private placement to prepare and file continuous disclosure documents, pay related fees and fund operations -- partial revocation granted subject to conditions.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990 c. S.5, AS AMENDED (the Act) AND IN THE MATTER OF RODOCANACHI CAPITAL INC.
ORDER (Section 144 of the Act)
WHEREAS the securities of Rodocanachi Capital Inc. Ltd. (the Applicant) are subject to a cease trade order issued by the Director on December 16, 2011 pursuant to paragraph 2 of subsection 127(1) the Act (the Ontario Cease Trade Order), directing 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 Applicant has applied to the Ontario Securities Commission (the Commission) for an order pursuant to section 144 of the Act to partially revoke the Ontario Cease Trade Order (the Order);
AND WHEREAS the Applicant has represented to the Commission that:
1. The Applicant is a Québec incorporated company. The Applicant's registered office is located at 1002 Sherbrooke O., 28e étage, Montréal (Québec) H3A 3L6.
2. The Applicant is a reporting issuer in the provinces of Alberta, British Columbia, Ontario and Quebec.
3. As at the date hereof, the authorized capital of the Applicant consists of an unlimited number of common shares (the Common Shares) of which 6,400,000 are issued and outstanding.
4. The Common Shares were traded on the TSX Venture Exchange (the Exchange) until November 2, 2009, date on which the trading was suspended. On December 6, 2011 the Common Shares were transferred on the NEX, a separate board of the Exchange, on which the trading in the Common Shares remains suspended.
5. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file, in accordance with the requirements of Ontario securities law, interim financial statements and the related management's discussion and analysis for the period ended August 31, 2011 and certification of the foregoing filings as required by National Instrument 52-109, Certification of Disclosures in Issuers' Annual and Interim Filings (NI 52-109).
6. In addition to the Ontario Cease Trade Order, the Applicant is subject to the following cease trade orders, each of which was issued due to, in part, the failure to file the 2011 Interim Statements:
a. an order issued by the Alberta Securities Commission on October 31, 2012,
b. an order issued by the British Columbia Securities Commission on December 6, 2011, and
c. an order issued by the Québec L'Autorité des Marchés Financiers on December 19, 2011,
(collectively, the Other Cease Trade Orders).
7. The Applicant's failure to file the interim financial statements, related management's discussion and analysis for the period ended August 31, 2011 and certification of the foregoing filings as required by NI 52-109 and subsequent continuous disclosure documents is a result of financial distress. If the Applicant cannot proceed with the Financing (as defined below), it is likely that the Applicant will not be able to continue its operations.
8. The Applicant intends to complete a non-brokered private placement of securities (the Financing) to raise up to $107,400 to allow the Applicant to bring itself back into compliance with its continuous disclosure obligations by filing the Required Documents (as defined below) and to satisfy filing fees and other expenses of the Applicant as described more fully in paragraph 10 below. The Financing will be conducted on a prospectus exempt basis with subscribers who are accredited investors (as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions) resident in the provinces of Alberta, British Columbia, Ontario and Quebec (each a Potential Investor).
9. To the knowledge of the Applicant none of the Potential Investors will be insiders or related parties of the Applicant.
10. The proceeds of the Financing are estimated to be applied as follows:
a.
Legal fees, accounting and audit fees:
$50,000
b.
Filings of materials, including penalties for both partial and full revocation orders
$40,400
c.
Debt to Computershare, NEX and Broadridge:
$17,000
Total Expenses
$107,400
11. The Applicant believes that the proceeds of the Financing will be sufficient to bring its continuous disclosure obligations up to date and pay all related outstanding fees. In the event that the amount of the Financing is not raised, any funds raised would be returned to the Potential Investors and management would continue its search for an alternative financing.
12. As the Financing will involve trades of securities and acts in furtherance of trades, the Financing cannot be completed without a partial revocation of the Ontario Cease Trade Order.
13. The Financing will be completed in accordance with all applicable laws.
14. Prior to completion of the Financing, each Potential Investor resident in Ontario will:
a. receive a copy of the Ontario Cease Trade Order,
b. receive a copy of this Order, and
c. receive a written notice from the Applicant, and will provide a written acknowledgement to the Applicant, that all of the Applicant's securities, including the Common Shares issued in connection with the Financing, will remain subject to the Ontario Cease Trade Order and the Other Cease Trade Orders until they are each revoked, and that the granting of this Order does not guarantee the issuance of any such full revocation orders in the future.
15. Upon issuance of this Order, the Applicant will issue a news release and file a material change report announcing the Financing and this Order.
16. Upon completion of the Financing and within a reasonable period of time, the Applicant will apply to the Commission for a full revocation of the Ontario Cease Trade Order and will also apply to the securities regulatory authorities where the Other Cease Trade Orders are in effect for a full revocation of those orders.
17. The Applicant has not been previously subject to a cease trade order by the Commission.
18. The Applicant is not in default of any requirements of the Act or the rules and regulations made pursuant thereto, other than:
a) the Applicant's failure to file the following documents (collectively, the Required Documents):
i. audited annual financial statements for the year ended May 30, 2012 and 2013, related management's discussion and analysis and certification of the foregoing filings by the Chief Executive Officer and the Chief Financial Officer of the Applicant as required by National Instrument 52-109 Certification of Disclosures in Issuers' Annual and Interim Filings, and
ii. interim financial statements for the three, six and nine month periods ended August 31, 2011, 2012 and 2013, November 30, 2011, 2012 and 2013 and February 28, 2012 and 2013 respectively, related management's discussion and analyses for the three, six and nine month periods ended August 31, 2011, 2012 and 2013, November 30, 2011, 2012 and 2013 and February 28, 2012 and 2013 respectively, and all certifications of the foregoing filings by the Chief Executive Officer and the Chief Financial Officer of the Applicant as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.
AND WHEREAS considering the Application and the recommendation of the staff of the Commission;
AND WHEREAS 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 partially revoked solely to permit trades in securities of the Applicant (including, for greater certainty, acts in furtherance of trades in securities of the Applicant) that are necessary for and are in connection with the Financing, provided that:
a. prior to completion of the Financing, each Potential Investor resident in Ontario will:
i. receive a copy of the Ontario Cease Trade Orders,
ii. receive a copy of this Order, and
iii. receive a written notice from the Applicant, and will provide a written acknowledgement to the Applicant, that all of the Applicant's securities, including the Common Shares issued in connection with the Financing, will remain subject to the Ontario Cease Trade Order and the Other Cease Trade Orders until they are each revoked, and that the granting of this Order does not guarantee the issuance of any such full revocation orders in the future, and
b. the Applicant will provide signed and dated written acknowledgements referred to in paragraph (a)(iii) above to staff of the Commission on request; and
c. this Order will terminate on the earlier of:
i. the closing of the Financing; and
ii. 120 days from the date hereof.
DATED at Toronto this 26th day of June, 2014.