TJR Coatings Inc. -- s. 144
Headnote
Application by an issuer for a revocation of a cease trade order -- Issuer subject to cease trade order as a result of its failure to file financial statements -- Issuer has brought its filings up-to-date -- Issuer is otherwise not in default of applicable securities legislation, except for certain matters which it intends to remedy -- Issuer is currently inactive, but intends to reactivate itself -- Issuer has provided an undertaking to the Commission that it will not complete (a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, (b) a reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or (c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, unless the issuer files a preliminary prospectus and a final prospectus with the Ontario Securities Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127(1), 127(5), 127(8), 144.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
(the "Act")
AND
IN THE MATTER OF
TJR COATINGS INC.
ORDER
(Section 144)
WHEREAS the securities of TJR Coatings Inc. (the "Issuer") are subject to a temporary cease trade order of the Director under the Act dated January 15, 2001 made under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, as extended by a further order of the Director dated January 26, 2001 made under subsection 127(8) of the Act (collectively, the "Cease Trade Order") ordering that trading in the securities of the Issuer cease until the Cease Trade Order is revoked by a further order of revocation;
AND WHEREAS the Issuer has made an application (the "application") to the Ontario Securities Commission (the "Commission") for revocation of the Cease Trade Order pursuant to section 144 of the Act;
AND WHEREAS the Issuer has represented to the Commission that:
1. The Issuer was incorporated on December 11, 1998 pursuant to the Business Corporations Act (Ontario) ("OBCA") under the name TJR Coatings Inc. The Issuer was dissolved on December 17, 2007 for failing to comply with the Corporations Tax Act (Ontario), but was revived on June 10, 2011.
2. The Issuer is a reporting issuer under the securities legislation of Ontario. The Issuer is not a reporting issuer in any other jurisdiction in Canada and is not subject to cease trade orders in any other jurisdiction.
3. The Issuer's authorized capital consists of an unlimited number of common shares (the "Common Shares"), of which 22,583,836 Common Shares are issued and outstanding. Other than the Common Shares, the Issuer has no securities, including debt securities, outstanding.
4. The Common Shares of the Issuer are not listed, quoted or traded on any exchange, marketplace or other facility in Canada or elsewhere. Prior to the Cease Trade Order, trading in Common Shares of the Issuer was reported to the Canadian Unlisted Board Inc. ("CUB") in accordance with the over-the-counter trading provisions in Part V1 of Regulation 1015 under the Act (the "Regulation"). Prior to the initiation of CUB's trade reporting facility on October 10, 2000, trading in Common Shares of the Issuer was reported to the Canadian Dealing Network Inc. ("CDN") in accordance with the Regulation (this component of CDN was referred to as the CDN Reported Market).
5. Prior to the Cease Trade Order, the Issuer carried on the business of developing and manufacturing a complete woodcare, restoration and coating protection system. Following its incorporation on December 11, 1998, the Issuer acquired 100% of the issued common shares of Noble House Coatings Inc. ("NHCI") on March 31, 1999. NHCI was a manufacturer and distributor of specialized wood coating products. On March 1, 2001, the Issuer discontinued the manufacturing and distribution operations of NHCI and entered into an exclusive distribution agreement with Primeline Products Corporation ("Primeline"). Manufacturing of products was outsourced to a third party on a contract basis. On November 1, 2001, NCHI discontinued all operations as a subsidiary of the Issuer. The Issuer's distribution agreement with Primeline ceased.
6. The Issuer has not carried on business since November 1, 2001. It has no material assets. It has no liabilities other than accounts payable, accrued liabilities and loans payable.
7. The Cease Trade Order was issued as a result of the Issuer's failure to file interim financial statements for the interim period ended October 31, 2000.
8. In 2001 and 2002, the Issuer attempted to remedy its continuous disclosure defaults. On January 31, 2001, the Issuer filed interim financial statements for the interim period ended October 31, 2000. On November 16, 2001, the Issuer filed audited annual financial statements for the financial year ended January 31, 2001 and interim financial statements for the interim periods ended April 30, 2001 and July 31, 2001. On January 14, 2002, the Issuer filed amended audited annual financial statements for the financial year ended January 31, 2001, amended interim financial statements for the interim periods ended April 30, 2001 and July 31, 2001 and interim financial statements for the interim period ended October 31, 2001. On February 20, 2002, the Issuer filed amended audited annual financial statements for the financial year ended January 31, 2001 and amended interim financial statements for the interim periods ended April 30, 2001, July 31, 2001 and October 31, 2001.
9. The Issuer previously applied for revocation of the Cease Trade Order on November 21, 2001, but that application was later abandoned.
10. Subsequently, the Issuer failed to file audited annual financial statements for the financial years ended January 31, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010 and 2011 (the "Annual Financial Statements"), interim financial statements for all interim periods since October 31, 2001 (the "Interim Financial Statements") and, where applicable following the coming into force of such requirements, related management's discussion and analysis ("MD&A") and certificates under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (the "NI 52-109 Certificates").
11. The Annual Financial Statements, Interim Financial Statements and related MD&A and NI 52-109 Certificates were not filed with the Commission due to a lack of funds to pay for the preparation and audit of the relevant financial statements.
12. In connection with the application, the Issuer has remedied certain of its continuous disclosure defaults. On September 29, 2011, the Issuer filed Interim Financial Statements and related MD&A and NI 52-109 Certificates for the interim periods ended April 30, 2011 and July 31, 2011. On October 28, 2011 and March 29, 2012, the Issuer filed copies of its articles and its by-laws. On December 20, 2011, the Issuer filed Interim Financial Statements and related MD&A and NI 52-109 Certificates for the interim period ended October 31, 2011. On May 23, 2012, the Issuer filed Annual Financial Statements and related MD&A and NI 52-109 Certificates for the financial years ended January 31, 2011, 2010 and 2009. On May 23, 2012, the Issuer paid outstanding participation fees, late fees and other fees. Furthermore, on May 30, 2012, the Issuer filed Annual Financial Statements and related MD&A and NI 52-109 Certificates for the financial year ended January 31, 2012 and paid related participation fees.
13. The Issuer has not filed any outstanding annual disclosure for the fiscal years ended January 31, 2002, 2003, 2004, 2005, 2006, 2007 and 2008, because the Issuer believes that the length of time that has elapsed since the date of the Cease Trade Order makes the filing of the outstanding disclosure for these periods of limited use to investors since the Issuer has not carried on business since November 1, 2001 and was inactive during the subsequent fiscal years.
14. Except for the Interim Financial Statements and related MD&A and NI 52-109 Certificates for the interim periods ended April 30, 2011, July 31, 2011 and October 31, 2011, the Issuer has not filed any outstanding Interim Financial Statements and related MD&A and NI 52-109 Certificates, because the Issuer believes that such Interim Financial Statements and related MD&A and NI 52-109 Certificates will not provide additional useful information concerning the present or future operations or financial circumstances of the Issuer since during the periods covered by such Interim Financial Statements the Issuer was inactive.
15. As a result of the filings described in paragraph 12 above and with the exceptions noted in paragraphs 13 and 14, the Issuer is up-to-date in its continuous disclosure filings with the Commission and has paid all outstanding participation fees, late fees and other fees and is not in default of any requirement in applicable securities legislation in any jurisdiction, except for (a) the existence of the Cease Trade Order, (b) failure to issue and file material change news releases and file material change reports in respect of the Cease Trade Order, the events leading up to the Issuer's cessation of business on November 1, 2001 (as described in paragraph 5 above), the departure of old directors and officers and the appointment of new directors and officers, (c) failure to comply with the delivery of financial statements and MD&A requirements in sections 4.6 and 5.6 of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102"), (d) failure to comply with section 4.11 of NI 51-102 in respect of a change of auditor, and (e) the possible contravention of the Cease Trade Order described in paragraph 16 below. To remedy the defaults described in (c) and (d) above, the Issuer will include (i) copies of the Annual Financial Statements and related MD&A for the fiscal years ended January 31, 2012, 2011, 2010 and 2009 and the Interim Financial Statements and related MD&A for the interim periods ended April 30, 2011, July 31, 2011 and October 31, 2011 and (ii) a "reporting package" (as defined in section 4.11 of NI 51-102) for the change of auditor, with the management information circular for the next annual meeting of shareholders that will be sent to the registered holders and beneficial owners of its securities.
16. The last management information circular of the Issuer was dated October 17, 2001 and was in respect of an annual and special meeting of shareholders held on November 20, 2001. The circular proposed that the shareholders approve a resolution at the meeting authorizing the Issuer to enter into one or more private placements during the 12 month period commencing November 20, 2001 of such number of securities that would result in the issuer issuing or making issuable a number of common shares aggregating up to 100% of the number of the issued and outstanding common shares of the issuer as at October 17, 2001 (the "2001 Private Placement Resolution"). The 2001 Private Placement Resolution was passed at the meeting held on November 20, 2001. Insofar as the 2001 Private Placement Resolution may have been an act in furtherance of a trade, it may have contravened the terms of the Cease Trade Order. However, no securities of the Issuer were issued after the date of the Cease Trade Order and the Issuer did not enter into any agreements contemplating the issuance of securities after the date of the Cease Trade Order.
17. The Issuer has not held an annual meeting of shareholders since November 20, 2001 and therefore has been in default of the annual meeting requirements under the OBCA. The Issuer has provided the Commission with an undertaking that it will hold an annual meeting of shareholders within three months after the date on which the Cease Trade Order is revoked. All matters relating to the meeting will be conducted in accordance with the OBCA and applicable securities legislation.
18. Except for the events leading up to the Issuer's cessation of business on November 1, 2001 (as described in paragraph 5 above), the departure of old directors and officers and the appointment of new directors and officers, the Issuer has not had any "material changes" within the meaning of the Act since it was cease traded and is not otherwise in default of requirements to file material change reports under applicable securities legislation. The events leading up to the Issuer's cessation of business on November 1, 2001 are disclosed in the Issuer's MD&A for the financial years ended January 31, 2011, 2010 and 2009.
19. The Issuer's SEDAR profile and SEDI issuer profile supplement are up-to-date.
20. The Issuer is currently inactive and following the revocation of the Cease Trade Order, the Issuer intends to reactivate itself. The Issuer does not have any definitive plans in place for the operation of the business going forward. In particular, the Issuer is not presently considering, nor is it involved in any discussions relating to, an acquisition, a reverse takeover or similar transaction. However, it is the intention of management of the Issuer to investigate opportunities going forward. The Issuer has provided the Commission with an undertaking that it will not complete:
(a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,
(b) a reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada,
(c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,
unless
(i) the Issuer files a preliminary prospectus and a final prospectus with the Ontario Securities Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act, and
(ii) the preliminary prospectus and final prospectus contain the information required by applicable securities legislation.
21. Forthwith after the revocation of the Cease Trade Order, the Issuer will issue and file a news release and file a material change report on SEDAR disclosing the revocation of the Cease Trade Order and outlining the Issuer's future plans. The material change report will include disclosure on the Issuer's directors and officers, the Issuer's audit committee members, the Issuer's principal shareholder, what remedial continuous disclosure documents have been filed on SEDAR, and a description of the undertakings referred to in paragraphs 17 and 20 above. The news release and material change report will also disclose that a director is currently funding the Issuer by way of loans and the material change report will contain the disclosure required by subsection 5.2(1) of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions in respect of those related party transactions.
AND UPON considering the Application and the recommendation of the staff of the Commission;
AND UPON being satisfied that to make this order would not be prejudicial to the public interest;
IT IS ORDERED, pursuant to section 144 of the Act, that the Cease Trade Order be and is hereby revoked.
DATED this 5th day of June, 2012.