The Ontario Securities Commission (OSC) granted a partial revocation of a cease trade order (CTO) against New Klondike Exploration Ltd. (the issuer), initially imposed due to the issuer’s failure to file audited annual financial statements and other required documents. The partial revocation allows the issuer to proceed with a private placement and debt-for-share transaction exclusively to accredited investors, family, friends, business associates, and creditors, under certain conditions.
The issuer’s securities were cease traded in Ontario, British Columbia, Quebec, and reciprocally in Alberta. The issuer sought to issue up to 340 million common shares to raise funds to pay outstanding filing fees and debts. The transactions are to be conducted on a prospectus-exempt basis, in accordance with sections 2.3, 2.5, and 2.14 of National Instrument 45-106 Prospectus Exemptions.
The OSC’s decision, made under section 144 of the Securities Act (Ontario), is contingent on the issuer providing each participant with a copy of the CTO and the partial revocation order, and obtaining signed acknowledgments that all securities will remain subject to the CTO until fully revoked. The issuer must also issue press releases and file reports regarding the transaction and any material changes.
The partial revocation is effective until the transaction closes or 60 days from the order date, whichever comes first. The decision aims to balance the issuer’s need to rectify its financial situation with the protection of the public interest.