Freckle Ltd. (formerly, Knol Resources Corp.) – 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., s. 1(11)(b)
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED (the Act) AND IN THE MATTER OF FRECKLE LTD. (FORMERLY, KNOL RESOURCES CORP.) (the Applicant)
ORDER (Paragraph 1(11)(b))
UPON the application of the Applicant to the Ontario Securities Commission (the Commission) for an order pursuant to paragraph 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 is a corporation continued under the Business Corporations Act (Ontario) (the OBCA) on June 12, 2019, with its registered and head office located at 409 King Street West, Suite 400, Toronto, Ontario, M5V 1K1.
2. The Applicant is the resulting issuer following a reverse takeover transaction completed on June 13, 2019 by way of a three-corner amalgamation among Freckle I.O.T. Ltd., a private company incorporated under the OBCA (Freckle), Knol Resources Corp., a TSX Venture Exchange listed company incorporated under the Business Corporations Act (Alberta) (Knol), and 2690134 Ontario Limited, a wholly owned subsidiary of Knol, incorporated under the OBCA (the Transaction). The Transaction was approved by the shareholders of Freckle on May 20, 2019 and the shareholders of Knol on May 29, 2019.
3. As at the date hereof, the Applicant has the following issued and outstanding securities: (i) 216,521,909 common shares (the Applicant Shares); (ii) 22,129,627 common share purchase warrants, convertible into 22,129,627 Applicant Shares; (iii) 2,061,850 common share purchase broker warrants, convertible into 2,061,850 Applicant Shares; and (iv) 8,214,850 options to purchase Applicant Shares. The Applicant Shares are listed on the TSX Venture Exchange (the Exchange) under the trading symbol "FRKL." No other securities of the Applicant are listed, traded or quoted on any stock exchange or trading or quotation system.
4. The Applicant is a reporting issuer under the Securities Act (Alberta) (the Alberta Act) and the Securities Act (British Columbia) (the B.C. Act). The Applicant became a reporting issuer in Alberta and British Columbia on November 18, 2009.
5. The Applicant is not currently a reporting issuer or equivalent in any jurisdiction other than Alberta and British Columbia.
6. The Applicant's principal regulator is the Alberta Securities Commission. 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 System for Electronic Document Analysis and Retrieval (SEDAR) profile 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 Alberta Act or the B.C. Act and is not in default of any requirement under the Alberta Act or the B.C. 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 Alberta Act and the B.C. Act are substantially the same as the continuous disclosure requirements under the Act.
9. The continuous disclosure materials filed by the Applicant are available on SEDAR.
10. The Applicant is not in default of any of the rules, regulations or policies of the Exchange.
11. As at the date hereof, the Applicant Shares are not listed or traded or quoted on any other stock exchange or trading or quotation system in Canada.
12. Pursuant to section 18 of Policy 3.1 of the TSX Venture Exchange Corporate Finance Manual (the TSXV Manual), a listed-issuer, which is not otherwise a reporting issuer in Ontario, must assess whether it has a "Significant Connection to Ontario" (as defined in Policy 1.1 of the TSXV Manual) and, upon becoming aware that it has a significant connection to Ontario, promptly make a bona fide application to the Commission to be designated as a reporting issuer in Ontario.
13. Following the completion of the Transaction, the Applicant has determined that it has a "Significant Connection to Ontario" for the following reasons: (i) residents of Ontario are the registered holders of more than 10% of the Applicant Shares; (ii) the majority of the Applicant's board of directors reside in Ontario; (iii) the CEO of the Applicant resides in Toronto, Ontario; (iv) the Applicant continued into the Province of Ontario on June 12, 2019; and (v) the Applicant's head and registered office is located in Toronto, Ontario.
14. None of the Applicant, any of its officers or directors, or any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant 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.
15. None of the Applicant, any of its officers or directors, or any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, is or has been subject to:
(a) any known ongoing or concluded investigation 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.
16. None of the Applicant's officers or directors, or any shareholder holding sufficient securities to materially affect the control 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 orders 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.
except that, with respect to John Farlinger who is (i) a current director of the Applicant and (ii) the current executive chairman and chief executive officer of Assure Holdings Corp. (Assure), the British Columbia Securities Commission (BCSC) issued cease trade orders (the Cease Trade Orders) in respect of Assure on May 1, 2018 and August 7, 2018, respectively, as a result of Assure's delay in filing its annual financial statements, management's discussion and analysis and related officer certifications for the fiscal year ended December 31, 2017 and its unaudited financial statements and management discussion and analysis for the first quarter ended March 31, 2018. The Cease Trade Orders were revoked by the BCSC on August 20, 2018.
AND UPON the Commission being satisfied that granting this Order would not be prejudicial to the public interest;
IT IS HEREBY ORDERED pursuant to paragraph 1(11)(b) of the Act that the Applicant is a reporting issuer for the purposes of Ontario securities laws.
DATED at Toronto, Ontario on this 2nd day of December 2019.