Taiga Motors Corporation
Headnote
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications and National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- application for order that issuer is not a reporting issuer and for full revocation of failure-to-file cease trade order -- issuer cease traded due to failure to file interim financial statements, interim management's discussion and analysis and related certifications -- issuer has completed reorganization under the Companies' Creditors Arrangement Act -- issuer was granted a partial revocation of the failure-to-file cease trade order -- issuer has applied for a full revocation of the cease trade order -- issuer has applied to cease to be a reporting issuer in each jurisdiction where it is a reporting issuer -- full revocation of the failure-to-file cease trade order and cease to be reporting issuer application granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(10)(a)(ii) and 144.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications.
National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdiction.
[TRANSLATION]
SEDAR+ Project No: 06188497
October 29, 2024
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUÉBEC AND ONTARIO
(the Jurisdictions)
AND
IN THE MATTER OF
THE REVOCATION OF CEASE TRADE ORDERS
AND
IN THE MATTER OF
THE PROCESS FOR CEASE TO BE
A REPORTING ISSUER APPLICATIONS
AND
IN THE MATTER OF
TAIGA MOTORS CORPORATION
(the Issuer)
AND
9526-1624 QUÉBEC INC.
(New ParentCo, collectively with the Issuer, the Filers)
DECISION
Background
1. The Issuer is subject to a failure-to-file cease trade order (the FFCTO) issued by the Autorité des marchés financiers (the Principal Regulator) on August 19, 2024.
2. On October 11, 2024, a condition was imposed on New ParentCo in the CTO Partial Revocation Order, as defined below, by the Principal Regulator, which prohibited New ParentCo from conducting any securities transactions except the CCAA Reorganization, as defined below (the New ParentCo CTO, collectively with the FFCTO, the CTOs of the Filers).
3. The Issuer has applied to the Principal Regulator for an order revoking the FFCTO under Policy Statement 11-207 respecting Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions (Policy Statement 11-207).
4. New ParentCo has applied to the Principal Regulator for an order revoking the New ParentCo CTO under the securities legislation of the Jurisdictions (the Legislation).
5. The Principal Regulator and the Ontario Securities Commission (the Decision Makers) also received an application from the Filers for an order under the Legislation to revoke the reporting issuer status of the Filers in all jurisdictions of Canada (the Cease to be a Reporting Issuer Order).
6. Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
a) the Filers have provided notice that subsection 4C.5 of Regulation 11-102 respecting Passport System, CQLR, c. V-1.1, r. 1 (Regulation 11-102) is intended to be relied upon in all jurisdictions of Canada other than in Québec and Ontario, and
b) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Interpretation
Terms defined in Regulation 14-101 respecting Definitions, CQLR, c. V-1.1, r. 3, in Regulation 14-501Q on definitions, CQLR, c. V-1.1, r. 4, Regulation 11-102, Policy Statement 11-207 and Policy Statement 11-206 Process for Cease to be a Reporting Issuer Applications have the same meaning if used in this order, unless otherwise defined.
Representations
This decision is based upon the following facts represented by the Filers:
7. The head office of the Filers is located in the Province of Québec.
8. The Filers are reporting issuers in all jurisdictions of Canada.
9. The authorized share capital of the Issuer consists of an unlimited number of Class A Restricted Voting Shares, an unlimited number of Class B Shares, and an unlimited number of common shares (the Common Shares) and Proportionate Voting Shares.
10. The Issuer has 31,825,716 issued and outstanding Common Shares and no Class A Restricted Voting Shares, no Class B Shares and no Proportionate Voting Shares outstanding.
11. In addition to the Common Shares, only the following securities were also outstanding, immediately prior to the commencement of the implementation of the CCAA Reorganization (defined hereinafter): (i) warrants to purchase Common Shares (the Warrants), (ii) replacement warrants to purchase Common Shares (the Replacement Warrants), (iii) options to purchase Common Shares (the Options), and (iv) convertible debentures that were convertible into Common Shares (the Convertible Debentures).
12. On August 19, 2024, the Common Shares and the Warrants were delisted from the TSX.
13. On August 19, 2024, the Principal Regulator issued the FFCTO in respect of the Issuer following the default of filing its most recent interim unaudited financial statements, its interim management's discussion and analysis with respect thereto and the interim certifications in respect of such filings for the period ended June 30, 2024 (collectively, the Unfiled Documents).
14. The FFCTO has been in effect in each jurisdiction of Canada in which a statutory reciprocal order provision applies, subject to the provisions of local securities legislation.
15. The Issuer has not filed continuous disclosure documents required to be filed by applicable Canadian securities legislation since the date of the FFCTO.
The CCAA Proceedings
16. On July 10, 2024, the Issuer and its subsidiaries, Taiga Motors Inc., Taiga Motors America Inc. and CGGZ Finance Corp. (collectively, the Taiga Entities) sought and obtained protection from their creditors under the Companies' Creditors Arrangement Act RSC 1985, c C-36 (the CCAA), the whole pursuant to the provisions of an order of the Superior Court of Québec (Commercial Division) (the Court), as amended, restated and supplemented since July 10, 2024 (the CCAA Proceedings).
17. Deloitte Restructuring Inc. was appointed by the Court as the monitor (the Monitor) in the CCAA Proceedings. The Monitor has provided, to date, three reports to the Court on the CCAA Proceedings, all of which are available on the website that the Monitor has created for the CCAA proceedings.
18. On July 10, 2024, the Taiga Entities sought and obtained from the Court an order pursuant to the CCAA approving a sale and investment solicitation process (SISP) in respect of the Taiga Entities authorizing the solicitation of investment, refinancing or sale offers for some or all of the Taiga Entities' business or assets, the whole in accordance with the SISP.
19. Following the completion of the SISP, Mr. Stewart Wilkinson (the Purchaser) was selected as the qualifying bidder by the Issuer with the support and recommendation of the Monitor and, on October 7, 2024, the Purchaser, New ParentCo and the Taiga Entities signed a share purchase agreement (the Share Purchase Agreement), which agreement contemplates the acquisition of all of the Common Shares of the Issuer by the Purchaser, subject to the exclusions, terms and conditions set forth therein.
20. Among other things, the Purchaser required that the Share Purchase Agreement shall include a condition precedent to his obligation to proceed with the closing of the transactions contemplated by such agreement that (i) the FFCTO be revoked for the purpose of allowing any trade or distribution required to complete such transaction to proceed, and (ii) the Issuer cease to be a reporting issuer prior to such transactions closing.
21. The Taiga Entities filed an application with the Court to obtain the issuance of an Approval and Vesting Order in the form of a "reverse vesting order" (the RVO) approving, among other things, the acquisition by the Purchaser of all of the issued and outstanding shares of the Issuer in a series of steps (the CCAA Reorganization) set out in the Share Purchase Agreement, including the granting and issuance by the Court of the RVO.
22. On October 10, 2024, the RVO was granted to the Taiga entities by the Court.
23. The CCAA Reorganization was not made subject to any vote by or approval of either the shareholders or creditors of the Issuer.
The CCAA Reorganization
24. The CCAA Reorganization includes the completion of the following main steps in the order presented hereunder:
a) all of the Common Shares were exchanged for common shares of New ParentCo (the New ParentCo Common Shares), then a wholly-owned subsidiary of the Issuer, such that New ParentCo now holds all of the issued and outstanding Common Shares and holders of the issued and outstanding Common Shares immediately prior thereto hold the equivalent number of New ParentCo Common Shares (the Share Exchange). As a result of the Share Exchange, New ParentCo became a reporting issuer in each of the jurisdictions of Canada pursuant to subsection 68(4) of the Act and the corresponding or equivalent statutory provisions of the securities legislation of the other jurisdictions;
b) simultaneously with the preceding step, all of the shares held by the Issuer in the capital of New ParentCo following its incorporation and all of the Options, the Warrants, the Replacement Warrants and the Convertible Debentures were cancelled for no consideration;
c) the Taiga Entities transferred certain excluded assets to New ParentCo as set forth in the Share Purchase Agreement in consideration for promissory notes each having a principal amount of $1.00 (the Promissory Notes);
d) the Taiga Entities transferred certain excluded liabilities to New ParentCo as set forth in the Share Purchase Agreement in consideration for the cancellation of the Promissory Notes;
e) all of the New ParentCo Common Shares issued and outstanding following the Share Exchange were cancelled for no consideration; and
f) as the final step of the CCAA Reorganization, the Purchaser will acquire all of the issued and outstanding shares of the Issuer from New ParentCo pursuant to the terms of the Share Purchase Agreement.
25. In connection with carrying out the SISP and obtaining the RVO, the Issuer has engaged in certain acts in furtherance of trades in the securities of the Issuer, including its entry into the Share Purchase Agreement (the Acts), which Acts were taken at the direction of, and with the approval of, and under the supervision of, the Court. Accordingly, the Issuer applied for a partial revocation order from the Principal regulator in order to complete the steps of the CCAA Reorganization set out in subparagraphs 24 (a) to (e).
26. On October 11, 2024, the Principal Regulator granted an order partially revoking the FFCTO for the sole purpose of permitting certain trades in securities of the Issuer to complete some of the CCAA Reorganization steps (the CTO Partial Revocation Order).
27. The CTO Partial Revocation Order includes a condition to the effect that no trade in respect of the securities of New ParentCo may occur (the New ParentCo CTO), other than such trades permitted by the CTO Partial Revocation Order until such time as an order is granted definitively lifting and revoking the New ParentCo CTO. The New ParentCo CTO took effect in each jurisdiction of Canada that has a statutory reciprocal order provision, subject to the terms of the local securities legislation.
28. On October 17, 2024the steps of the CCAA Reorganization set out in subparagraphs 24 (a) to (e) have been completed.
29. Following the completion of the steps of the CCAA Reorganization set out in subparagraphs 24 (a) to (e):
g) The issued and outstanding share capital of the Issuer consists solely of Common Shares, all of which are held by a single shareholder, namely the Purchaser.
h) The authorized share capital of New ParentCo consists solely of New ParentCo Common Shares and no New ParentCo Common Shares are currently issued and outstanding, such that New ParentCo has no shareholders, and New ParentCo has no other issued and outstanding securities.
The Filers
30. The Filers are not OTC reporting issuers under Regulation 51-105 respecting Issuers Quoted in the U.S. Over-the-Counter Markets, CQLR, c. V-1.1, r. 24.1.
31. The outstanding securities of the Filers, including debt securities, are 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.
32. No securities of the Filers are traded on a marketplace as defined in Regulation 21-101 respecting Marketplace Operation, CQLR, c. V-1.1, r. 5 or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
33. The Filers are applying to cease to be a reporting issuer in all of the jurisdictions of Canada in which they are a reporting issuer.
34. The Filers are not in default of any requirements of the applicable securities legislation of any jurisdiction in Canada or the rules and regulations made pursuant thereto, other than the Issuer pursuant to its obligations to complete and file the Unfiled Documents.
35. The Purchaser or the officers of the Filers currently have no intention to cause the Issuer to seek financing by way of a public offering of its securities in Canada or elsewhere.
36. Information that would have been disclosed in the Unfiled Documents no longer provides meaningful or material information since the Issuer has one shareholder as a result of the completion of the CCAA Reorganization.
37. The Filers acknowledge that, in granting the order sought, the principal regulator is not expressing any opinion or approval as to the terms of the CCAA Reorganization.
Order
The Principal Regulator is satisfied that the order to revoke the CTOs of the Filers meets the test set out in the Legislation for the Principal Regulator to make the decision.
The decision of the Principal Regulator under the Legislation is that the CTOs of the Filers are revoked.
The Decision Makers are satisfied that the Cease to be a Reporting Issuer Order meets the test set out in the Legislation for the Decision Makers to make the order.
The decision of the Decision Makers under the Legislation is that the Cease to be a Reporting Issuer Order is granted.
"Marie-Claude Brunet-Ladrie"
Directrice de la surveillance des émetteurs et initiés
OSC File #: 2024/0566
OSC File #: 2024/0567