The Ontario Securities Commission (OSC) has granted a partial revocation of a cease trade order (CTO) against Medifocus Inc., a medical device company, under section 144 of the Securities Act (Ontario). The original CTO was issued due to Medifocus’s failure to file required financial documents, including audited annual financial statements, interim financial statements, management’s discussion and analysis, and related certifications.
Medifocus applied for the partial revocation to proceed with a reorganization plan under the Companies’ Creditors Arrangement Act (CCAA). The OSC’s decision allows for specific trades related to the reorganization, subject to conditions, including the provision of certain documents to Asset Profits Limited (APL), the party involved in the reorganization, and the acknowledgment that all securities will remain under the CTO until a full revocation is granted.
The reorganization plan includes APL subscribing for new shares in exchange for forgiving a debt, a share consolidation, and the cancellation of existing securities, making APL the sole shareholder. The OSC’s partial revocation is contingent on compliance with the order and will expire upon the completion of the transaction or after 60 days from the date of the order. The decision is based on the OSC’s satisfaction that the partial revocation meets the legislative test and is in accordance with the Securities Act and related policies.