Signal Gold Inc.
Headnote
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- issuer has outstanding warrants and other convertible securities exercisable into securities of acquirer -- holders of outstanding securities no longer require public disclosure in respect of the issuer -- relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
IN THE MATTER OF
THE SECURITIES LEGISLATION OF ONTARIO
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR CEASE TO BE
A REPORTING ISSUER APPLICATIONS
AND
IN THE MATTER OF SIGNAL GOLD INC.
(the Filer)
ORDER
Background
1 The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
Interpretation
2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
Representations
3 This order is based on the following facts represented by the Filer:
1. the Filer was incorporated under the Business Corporations Act (Ontario) (the OBCA);
2. the Filer's head office is located in Toronto, Ontario and the Filer is a wholly-owned subsidiary of NexGold Mining Corp. (NexGold);
3. the Filer is a reporting issuer in each of the of the provinces of Canada and, until December 16, 2024, the common shares in the capital of the Filer (the Filer Shares) were listed and traded on the Toronto Stock Exchange (the TSX) under the symbol "SGNL" and were quoted on the OTCQB under the symbol "SGNLF"; no other securities of the Filer were listed on any marketplace;
4. immediately prior to the Effective Time (as defined below), the Filer had the following issued and outstanding securities:
(a) 379,685,523 Filer Shares;
(b) stock options exercisable to purchase 3,908,000 Filer Shares (the Filer Options);
(c) share units settleable for an aggregate of 9,721,602 Filer Shares (the Filer Share Units) that were issued under the Filer's share unit plan (the Share Unit Plan), a long-term incentive plan of the Filer, under which Filer Share Units granted represented the right to receive one Filer Share as soon as practicable following the maturity date in accordance with the Share Unit Plan; and
(d) an aggregate of 116,902,515 common share purchase warrants, as follows (collectively, the Filer Warrants):
(i) common share purchase warrants to acquire 2,785,000 Filer Shares which expired on December 13, 2024;
(ii) common share purchase warrants to acquire 3,478,586 Filer Shares at a price of $0.24 per Filer Share;
(iii) common share purchase warrants to acquire 15,576,675 Filer Shares at a price of $0.225 per Filer Share;
(iv) common share purchase warrants to acquire 5,861,337 Filer Shares at a price of $0.74 per Filer Share;
(v) common share purchase warrants to acquire 25,413,408 Filer Shares which were cancelled on December 13, 2024; and
(vi) common share purchase warrants to acquire 63,787,409 Filer Shares at a price of $0.11818 per Filer Share;
5. as at the date hereof, an aggregate of 88,704,007 Filer Warrants and 5,627,507 Share Units remain outstanding (collectively, the Outstanding Filer Convertible Securities);
6. to the best of the Filer's knowledge and belief, upon due diligence review of the Filer's internal securities registers and reports of exempt distribution, the Filer was able to ascertain that there are, in aggregate, greater than 15 holders of Outstanding Filer Convertible Securities in at least one of the jurisdictions of Canada and greater than 51 holders of Outstanding Filer Convertible Securities in total worldwide;
7. under the terms and conditions of an arrangement agreement dated October 9, 2024 between the Filer and NexGold, effective at 12:01 a.m. (Toronto Time) on December 13, 2024 (the Effective Time), NexGold acquired all of the issued and outstanding Filer Shares by way of a statutory plan of arrangement under the OBCA (the Arrangement);
8. NexGold is a corporation existing under the Business Corporations Act (British Columbia), and its authorized share capital consists of an unlimited number of common shares (the NexGold Shares), which are listed on the TSX Venture Exchange under the symbol "NEXG" and are quoted on the OTCQX under the symbol "NXGCF";
9. the notice of special meeting of holders of Filer Shares (the Filer Shareholders) and management information circular dated November 5, 2024 (the Filer Meeting Materials) were delivered to the Filer Shareholders entitled to vote at the special meeting of the Filer Shareholders that took place on December 6, 2024 to consider the Arrangement (the Meeting);
10. in accordance with the interim order of the Ontario Superior Court of Justice (Commercial List) rendered on November 5, 2024, the Filer Meeting Materials were distributed to the holders of Outstanding Filer Convertible Securities outstanding as of the record date for the Meeting on November 14, 2024 in connection with the Meeting;
11. the Arrangement was approved by 95.501% of the Filer Shareholders present in person or represented by proxy at the Meeting, excluding, for this purpose, votes attached to shares held by persons described in items (a) through (d) of Section 8.1(2) of MI 61-101 Protection of Minority Security Holders in Special Transactions;
12. on December 11, 2024, the Ontario Superior Court of Justice (Commercial List) granted an order approving the Arrangement;
13. on December 13, 2024, the Filer and NexGold issued a news release announcing the completion of the Arrangement in which the Filer also announced that it intended to submit an application to cease to be a reporting issuer;
14. under the Arrangement:
(a) NexGold acquired all of the Filer Shares;
(b) all Filer Options were exchanged into stock options of NexGold to acquire NexGold Shares;
(c) all Filer Warrants were adjusted in accordance with their terms such that the holders became entitled to receive after the Effective time, and NexGold became obligated to issue, upon exercise of such Filer Warrants, such number of NexGold Shares that the holders would have been entitled to receive if the holders had exercised their Filer Warrants immediately prior to the Effective Time; and
(d) all Filer Share Units held by certain specified holders thereof (the Continuing Unitholders, being holders who were anticipated to continue as an employee, director or officer with NexGold, the Filer or an affiliate of NexGold or the Filer following the Effective Time) were adjusted in accordance with the terms of the Share Unit Plan such that, following the Effective Time, each Continuing Unitholder became entitled to receive, and NexGold became obligated to issue, upon settlement of such Filer Share Units, such number of NexGold Shares that the holders would have been entitled to receive if the Filer Share Units had been settled immediately prior to the Effective Time;
15. the treatment of Filer Warrants under the Arrangement is consistent with the terms of the certificates governing the Filer Warrants and the treatment of the Filer Share Units under the Arrangement is consistent with the terms of the Share Unit Plan;
16. the Outstanding Filer Convertible Securities are the only outstanding securities of the Filer other than the Filer Shares held by NexGold and no Filer Shares or other securities of the Filer are issuable upon exercise of any Outstanding Filer Convertible Securities;
17. the Filer is not required to remain a reporting issuer in any jurisdiction under any contractual arrangement between the Filer and the holders of the Outstanding Filer Convertible Securities, and no consents or approvals to cease to be a reporting issuer are required from the holders of the Outstanding Filer Convertible Securities;
18. the Outstanding Filer Convertible Securities do not provide the holders thereof with voting rights in respect of NexGold;
19. in connection with the Arrangement, additional NexGold Shares were authorized for issuance upon exercise of the Outstanding Filer Convertible Securities;
20. the Filer Shares were delisted from the TSX and withdrawn from the OTCQB in the United States effective at the close of business on December 16, 2024;
21. NexGold is a reporting issuer in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador, and as such, NexGold is subject to the continuous disclosure requirements that are relevant to holders of Outstanding Filer Convertible Securities, as such holders are entitled to receive NexGold Shares upon exercise or settlement of such securities, as applicable;
22. NexGold is not in default of any requirement under securities legislation in any jurisdiction;
23. the Filer is not an OTC issuer as that term is defined under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
24. the Filer has no intention to seek public financing by way of an offering of securities;
25. no securities of the Filer, including any debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
26. the Filer is applying for an order that it has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is currently a reporting issuer;
27. the Filer is not in default of any requirement under securities legislation in any jurisdiction;
28. the Filer cannot rely on the exemption available in section 13.3 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) for issuers of exchangeable securities because the Outstanding Filer Convertible Securities are not "designated exchangeable securities" as that term is defined under NI 51-102;
29. the Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications (NP 11-206) because the securities of the Filer, namely the Outstanding Filer Convertible Securities, are not beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;
30. the Filer is not eligible to use the modified procedure under NP 11-206 because, among other things, the Filer is not organized or incorporated in a foreign jurisdiction; and
31. upon the granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction in Canada.
Order
4 The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
DATED at Toronto on this 14th, day of February, 2025.
"Erin O'Donovan"
Manager, Corporate Finance
Ontario Securities Commission
OSC File #: 2024/0745
SEDAR+ File #: 6224304