The Ontario Securities Commission (OSC) has granted a partial revocation of a cease trade order (CTO) against First Choice Products Inc. (the Applicant), which was initially imposed due to the company’s failure to file required continuous disclosure documents. The partial revocation allows the Applicant to proceed with a private placement and a debt settlement with accredited investors.
The Applicant had not filed audited financial statements, management’s discussion and analysis (MD&A), and related certifications for several years, leading to financial difficulties. The company is seeking to raise up to $118,000 through the issuance of unsecured convertible debentures and to settle approximately $32,809 of debt through the issuance of common shares. The raised funds will be used to prepare and file the outstanding continuous disclosure documents and to pay related fees.
The decision is based on the Applicant’s representations and compliance with conditions set by the OSC. These include providing purchasers with copies of the CTO and the partial revocation order, obtaining signed acknowledgments that securities will remain subject to the CTO, and issuing press releases and material change reports as necessary.
The partial revocation is subject to the Securities Act, R.S.O. 1990, c. S.5, as amended, specifically section 144, and is informed by National Policy 12-202 concerning the revocation of certain CTOs. The Applicant’s actions are also subject to Multilateral Instrument 61-101 regarding the protection of minority security holders in special transactions, given that the transactions involve related parties.
The partial revocation is conditional and will expire upon the earlier of the closing of the private placement and debt settlement or 60 days from the date of the order. The Applicant intends to apply for a full revocation of the CTOs after fulfilling its continuous disclosure obligations.