The Ontario Securities Commission (OSC) has granted a partial revocation of a cease trade order (CTO) against a corporation, allowing it to proceed with a private placement of debentures. The CTO was initially issued due to the corporation’s failure to file required continuous disclosure documents. The corporation aims to use the proceeds from the private placement to update its continuous disclosure filings and pay related fees.
Key points from the decision include:
– The corporation is a reporting issuer in multiple Canadian provinces and is involved in natural resources with non-producing oil and gas assets.
– It has been subject to CTOs from various securities commissions due to non-filing of financial statements and other continuous disclosure documents.
– The corporation has since filed certain financial documents and intends to file additional outstanding disclosures.
– The private placement involves issuing unsecured, non-convertible debentures with an aggregate principal amount of up to $250,000 to a small number of investors.
– The corporation will rely on prospectus exemptions under National Instrument 45-106 for the private placement.
– The partial revocation of the CTO is subject to conditions, including that investors receive copies of the CTO and acknowledge the securities will remain under the CTO until fully revoked.
The decision is based on section 144 of the Securities Act (Ontario), which allows for the revocation or variation of a decision of the Commission if it is not prejudicial to the public interest. The outcome permits the corporation to raise funds necessary to comply with its continuous disclosure obligations and potentially have the full CTOs revoked in the future.