The Ontario Securities Commission (OSC) issued a partial revocation of a cease trade order (FFCTO) against Molecule Holdings Inc. (the Issuer), which was initially imposed due to the Issuer’s failure to file its audited annual financial statements and other required documents. The Issuer sought this partial revocation to proceed with a debt settlement transaction and a private placement to raise funds. The raised funds will be used to comply with continuous disclosure obligations, pay outstanding fees, and for working capital.
Key Facts:
– The Issuer is a reporting entity in Ontario, Alberta, British Columbia, and Québec.
– The FFCTO was issued on March 5, 2024, due to non-compliance with filing requirements.
– The Issuer plans to amend the terms of its unsecured debentures and conduct a private placement to raise up to $300,000.
Reasoning:
– The Issuer intends to use the proceeds from the private placement to file overdue financial statements and meet other regulatory requirements.
– The Issuer has halted discussions with debenture holders and potential investors since the FFCTO was issued.
– The proposed transactions will be conducted in compliance with applicable securities laws and exemptions.
Outcome:
– The OSC granted a partial revocation of the FFCTO, allowing the Issuer to proceed with the debt settlement and private placement, subject to conditions.
– Conditions include obtaining signed acknowledgments from participants that the acquired securities will remain subject to the FFCTO until a full revocation is granted, and providing copies of the FFCTO and partial revocation order to all participants.
Relevant Laws:
– Securities Act, R.S.O. 1990, c. S.5, as amended, sections 127 and 144.
– National Instrument 45-106 Prospectus Exemptions.