The Ontario Securities Commission partially revoked a cease trade order (CTO) against Essex Oil Ltd., which had been imposed due to the company’s failure to file required annual financial statements and other continuous disclosure documents. The partial revocation allows Essex Oil to conduct a private placement to raise funds with specific accredited investors and associates to address its filing deficiencies and provide working capital.
Key points include:
– Essex Oil was cease traded for not filing audited financial statements for the year ended June 30, 2016, and subsequent annual and interim financial statements, among other required disclosures.
– The company sought to raise funds through a private placement of 75,000,000 common shares at C$0.002 each, primarily with two subscribers, to fulfill its continuous disclosure obligations and pay outstanding fees.
– The private placement is exempt from formal valuation and minority shareholder approval requirements under Multilateral Instrument 61-101 due to the company’s non-listed status and the transaction’s value being below $2,500,000.
– The proceeds from the private placement will be allocated to various costs, including working capital, auditor fees, legal and accounting fees, and regulatory fees.
– The partial revocation is conditional upon Essex Oil providing subscribers with a copy of the CTO and the revocation order, and obtaining signed acknowledgments that the securities will remain subject to the CTO.
– The partial revocation does not exempt Essex Oil from the prospectus requirement and will expire upon the closing of the transaction or after 60 days from the order date.
The decision is grounded in Section 144 of the Securities Act (Ontario) and follows the guidelines of National Policy 11-207 for Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.