Medifocus Inc. -- s. 144
Headnote
Application by an issuer for a revocation of a cease trade order - cease trade order issued because the issuer had failed to file certain continuous disclosure materials 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
MEDIFOCUS INC.
(the Reporting Issuer)
ORDER
(Section 144)
Background
On August 4, 2011, the Director made an order under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act (the Temporary Cease Trade Order) that all trading in the securities of the Reporting Issuer cease for a period of fifteen days from the date of the Temporary Cease Trade Order.
On August 16, 2011, the Director made a further order under paragraph 2 of subsection 127(1) of the Act (the Cease Trade Order) that all trading in the securities of the Reporting Issuer, whether direct or indirect, shall cease until further order by the Director.
The Temporary Cease Trade Order and the Cease Trade Order were made because the Reporting Issuer was in default of certain filing requirements under Ontario securities law as described in each such order.
The Reporting Issuer has applied to the Ontario Securities Commission under section 144 of the Act for a revocation of the Cease Trade Order.
Representations
This order is based on the following facts represented by the Reporting Issuer:
1. The Reporting Issuer is a reporting issuer under the securities legislation of each of the provinces of Ontario, Alberta, and British Columbia.
2. On June 28, 2011, the Reporting Issuer announced a proposed arm's length non-brokered private placement of its securities (the Private Placement). Subsequently, the Reporting Issuer failed to file its annual financial statements and related annual filings when due on July 29, 2011. As a result, the Temporary Cease Trade Order was issued on August 4, 2011.
3. Notwithstanding the Temporary Cease Trade Order, on August 11, 2011 the Reporting Issuer completed the previously announced Private Placement through the distribution of 1,000,000 common shares (the Common Shares) for aggregate proceeds of $300,000. The Private Placement of Shares was made to a single, arm's length subscriber (the Subscriber).
4. The Reporting Issuer contravened the Temporary Cease Trade Order by completing the Private Placement on August 11, 2011.
5. The Subscriber was aware that the Reporting Issuer's securities were subject to the Temporary Cease Trade order at the time the Private Placement was completed. The Subscriber has not traded the Shares it purchased under the Private Placement.
6. Except as described in paragraphs 3 and 4 above, the Reporting Issuer is not in default of any requirements of the Temporary Cease Trade Order, the Cease Trade Order, the Act or the rules and regulations made pursuant to the Act.
7. The Reporting Issuer has filed all outstanding continuous disclosure documents that are required to be filed under Ontario securities law.
8. The Reporting Issuer has paid all outstanding activity, participation and late filing fees that are required to be paid.
9. The Reporting Issuer's SEDAR profile and SEDI issuer profile supplement are current and accurate.
10. Upon issuance of this revocation order, the Reporting Issuer will issue a news release announcing the revocation of the Cease Trade Order. The Reporting Issuer will concurrently file the news release and a material change report regarding the revocation of the Cease Trade Order on SEDAR.
11. The Reporting Issuer is also subject to a similar cease trade order issued by the British Columbia Securities Commission (BCSC) as a result of the failure to make the filings described in the Temporary Cease Trade Order and Cease Trade Order. The Reporting Issuer has applied to the BCSC to have the cease trade order issued by the BCSC revoked.
Order
The Director is of the opinion that it would not be prejudicial to the public interest to revoke the Cease Trade Order.
It is ordered under section 144 of the Act that the Cease Trade Order is revoked.
Dated: December 21, 2011.