Valucap Investments Inc. - s. 144
Headnote
Application by an issuer for an order revoking a cease trade order made by the Commission - cease trade order issued as a result of the issuer's failure 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., ss. 127, 144.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
(the Act)
AND
IN THE MATTER OF
VALUCAP INVESTMENTS INC.
ORDER
(Section 144)
WHEREAS a Director of the Ontario Securities Commission (the Commission) issued a temporary cease trade order dated September 3, 2004 pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, as extended by an order dated September 15, 2004 pursuant to paragraph 2 of subsection 127(1) of the Act (together, the Ontario Cease Trade Order) which provided that all trading in the securities of Valucap Investments Inc. (the Applicant) shall cease until further order by the Director;
AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act for a revocation of the Ontario Cease Trade Order;
AND WHEREAS the Applicant has represented to the Commission that:
1. The Applicant is governed by the laws of the Yukon Territory, with its head office located in Toronto, Ontario.
2. The Applicant is a reporting issuer in Ontario, British Columbia and Alberta with Ontario being its principal regulator.
3. The Applicant's authorized share capital consists of an unlimited number of common shares (the Common Shares) of which 2,820,733 Common Shares are issued and outstanding. The Applicant also has a promissory note in the amount of $161,997 issued to Seaquest Corporation due on 30 days demand notice (the Promissory Note).
4. Other than the Common Shares and the Promissory Note, the Applicant has no securities (including debt securities) outstanding.
5. Prior to the issuance of the Ontario Cease Trade Order, the Applicant was an investment issuer involved in developing small to mid-cap technology companies with high growth potential. Upon revocation of the Ontario Cease Trade Order, the Applicant intends to continue to be an investment issuer that provides equity and convertible capital to undervalued, under-performing and emerging growth Canadian companies.
6. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file audited annual financial statements for the year ended March 31, 2004 and interim financial statements for the three-month period ended June 30, 2004 (the Continuous Disclosure Documents).
7. The Continuous Disclosure Documents were not filed due to the Applicant's financial difficulties. The Applicant effectively ceased operations beginning in 2004, at which time, its securities were cease traded in Ontario, British Columbia and Alberta.
8. Due to the Applicant's financial difficulties, the Applicant's Common Shares which were previously listed on the TSX Venture Exchange (the TSX-V) were transferred to the NEX board on January 21, 2005, where they currently remain listed. The NEX board provides a trading forum for listed companies that have low levels of business activity or that have ceased to carry on an active business and thus have fallen below the TSX-V's listing standards.
9. The Applicant has been subject to a cease trade order issued by (i) the British Columbia Securities Commission dated September 1, 2004 for failure to file the comparative financial statements for the year ended March 31, 2004, interim financial statements for the three-month period ended June 30, 2004 and management's discussion and analysis for the period ended June 30, 2004 (the B.C. Cease Trade Order); and (ii) the Alberta Securities Commission dated February 25, 2005 for failure to file audited annual financial statements for the year ended March 31, 2004, first quarter interim unaudited financial statements for the period ended June 30, 2004 and second quarter interim unaudited financial statements for the period ended September 30, 2004 (the Alberta Cease Trade Order).
10. Given the inactivity of the Applicant since 2004, the Applicant has not filed on SEDAR its audited annual financial statements and supporting documentation for the fiscal periods ended March 31, 2004 and 2005 (collectively, the Unfiled Financial Statements) because the Applicant believes that the Unfiled Financial Statements would not provide additional useful information concerning the present or future operations or financial circumstances of the Applicant as the Applicant was inactive during this period. The Unfiled Financial Statements were also not sent to the shareholders of the Applicant because the Applicant was inactive and did not have the funds necessary to prepare or distribute such statements.
11. Since the imposition of the Ontario Cease Trade Order, Jeffrey Watts has resumed his role as President and Chief Executive Officer of the Applicant, Vince Bulbrook has joined the Applicant as Chief Financial Officer and Antonio Cosentino has become a Director of the Applicant. Cynthia Lewis and Magaly Bianchini have remained in their roles as directors of the Applicant.
12. The Applicant has not had any other "material changes" within the meaning of the Act since the imposition of the Ontario Cease Trade Order and is not in default of the requirements to file material change reports under applicable securities legislation.
13. On August 19, 2008, the Applicant filed on SEDAR its audited annual financial statements for the fiscal periods ended March 31, 2006, 2007, and 2008 including management's discussion and analysis for such periods as required under National Instrument 51-102 Continuous Disclosure Obligations and accompanying certificates as required under Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the Filed Continuous Disclosure Documents).
14. The Applicant is up-to-date with its continuous disclosure obligations and has paid all required outstanding fees to the Commission.
15. The Applicant's SEDAR and SEDI profiles are up-to-date.
16. Except for the Unfiled Financial Statements, the Applicant is not in default of any of its obligations as a reporting issuer under the Act or the rules and regulations made pursuant thereto.
17. Other than the Ontario Cease Trade Order, the B.C. Cease Trade Order and the Alberta Cease Trade Order (each a Cease Trade Order), the Applicant has not previously been subject to a cease trade order.
18. The Applicant has applied to have each of the Cease Trade Orders concurrently revoked.
19. The Applicant has received financial backing and is preparing to recommence operations as an investment issuer on behalf of its shareholders.
20. Given the inactivity of the Applicant since 2004, the Applicant has not held an annual general meeting of shareholders since September 2003. The Applicant will file a notice of meeting and record date to hold an annual and special meeting of shareholders within three months of the date hereof to: (a) receive the Applicant's audited financial statements for the fiscal periods ended March 31, 2006, 2007 and 2008 and each of the reports of the auditors thereon; (b) elect directors; (c) approve the Applicant's stock option plan; and (d) conduct such other business as required by applicable law. In connection with the annual and special meeting of shareholders, the Applicant will deliver, at the appropriate time, the requisite meeting materials, including a management information circular, to its shareholders.
21. Upon the issuance of this revocation order, the Applicant will issue and file a news release and a material change report on SEDAR.
AND UPON considering the application and the recommendation of staff of the Commission;
AND WHEREAS the Director is satisfied that it would not be prejudicial to the public interest to revoke the Ontario Cease Trade Order;
IT IS ORDERED, pursuant to section 144 of the Act, that the Ontario Cease Trade Order is revoked.
DATED at Toronto this 26th day of August 2008.