The Securities Commission granted a partial revocation of a cease trade order (CTO) that had been imposed on an issuer due to its failure to file the required annual financial statements and other continuous disclosure documents. The issuer sought this partial revocation to complete a private placement to raise funds necessary to update its continuous disclosure records and pay related fees.
The issuer was non-compliant with the filing requirements due to logistical challenges caused by the COVID-19 pandemic. The funds from the private placement are intended to cover costs such as accounting and audit fees, legal fees, filing fees, office expenses, transfer agent fees, and finder’s fees, with the goal of bringing the issuer’s continuous disclosure obligations up to date.
The partial revocation was granted under section 144 of the Securities Act (Ontario) and was contingent upon several conditions. These included providing each subscriber and finder with a copy of the CTO and the partial revocation order, as well as obtaining signed acknowledgments from them that the securities acquired will remain subject to the CTO until a full revocation is granted.
The decision was made in accordance with the applicable legislative provisions, including the Securities Act, R.S.O. 1990, c. S.5, as amended, sections 127 and 144, and National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions. The outcome allows the issuer to proceed with the private placement under the specified conditions, with the understanding that a full revocation of the CTO would be sought in the future.