The Ontario Securities Commission (OSC) has granted a partial revocation of a cease trade order (CTO) against Acerus Pharmaceuticals Corporation (the Issuer) to allow for specific trades connected to a court-approved transaction under the Companies’ Creditors Arrangement Act (CCAA). The original CTO was issued due to the Issuer’s failure to file annual financial statements, management’s discussion and analysis, and related certifications.
The Issuer, a specialty pharmaceutical company, sought the partial revocation to proceed with a transaction involving the issuance of a significant number of Class A common shares to First Generation in exchange for debt forgiveness. This transaction is part of a restructuring effort following the Issuer’s financial difficulties and subsequent CCAA proceedings.
The OSC’s decision, under section 144 of the Securities Act (Ontario), is contingent on several conditions, including that First Generation receives copies of the CTO, the partial revocation order, and a written notice acknowledging that all securities of the Issuer, including those issued in the transaction, will remain subject to the CTO until a full revocation is granted. The Issuer also intends to cease being a reporting issuer post-transaction.
The partial revocation is time-limited, expiring upon the transaction’s completion or after 60 days from the order date, whichever comes first. The decision is based on the OSC’s satisfaction that the partial revocation meets the legislative test set out in the Securities Act and related policies.