Securities Law & Instruments

Headnote

Section 144 -- partial revocation of a cease trade order to permit shareholders to vote on proposed debt settlement and acquisition of holding company holding licence of proprietary Internet search software.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S. 5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

WISPER INC. (the "Corporation")

 

ORDER

(Section 144)

WHEREAS the securities of the Corporation are subject to a temporary order of the Manager, Corporate Finance (the "Manager") of the Ontario Securities Commission (the "Commission") dated October 22, 2002 and extended by an order of the Manager dated November 1, 2002 made under section 127 of the Act (collectively referred to as the "Cease Trade Order") directing that trading in the securities of the Corporation cease until it is revoked by a further order of revocation.

AND WHEREAS the Corporation has applied to the Commission pursuant to section 144 of the Act (the "Application") for a full revocation of the Cease Trade Order.

AND UPON the Corporation having represented to the Commission as follows:

1. The Corporation was amalgamated on May 31, 1996 under the name Logicsys Inc. pursuant to the Business Corporations Act (Ontario). On January 11, 2001 the name of the Corporation was changed to Wisper Inc.

2. The Corporation is a reporting issuer under the Act, the Securities Act (Alberta) (the "Alberta Act") and under the Securities Act (British Columbia) (the "BC Act") and is not a reporting issuer or the equivalent under the securities legislation of any other jurisdiction in Canada.

3. The authorized share capital of the Corporation consists of an unlimited number of Common Shares, an unlimited number of First Preferred Shares and an unlimited number of Second Preferred Shares, of which 36,333,614 Common Shares and no First Preferred Shares or Second Preferred Shares were issued and outstanding as of February 26, 2004.

4. The Cease Trade Order was issued as a result of the Corporation's failure to file its audited financial statements for the fiscal year ended May 31, 2002 due to lack of funds necessary to engage an auditor. Subsequently, the Corporation failed to file its interim financial statements for the three-month period ended August 31, 2002, the six-month period ended November 30, 2002, the nine-month period ended February 28, 2003, the three-month period ended August 31, 2003 and audited financial statements for the fiscal year ended May 31, 2003.

5. The Corporation is also subject to cease trade orders issued under the BC Act and the Alberta Act and has concurrently applied for a revocation of those cease trade orders.

6. The Corporation has filed on SEDAR its financial statements for the fiscal years ended May 31, 2002 and May 31, 2003, (the "Annual Financial Statements") and its interim financial statements for the three-month period ended August 31, 2003 (collectively, the "Financial Statements") and has sent the Financial Statements to its shareholders. The auditor's reports for the Annual Financial Statements each contains a qualification paragraph in regards to accounts payable balances of the Corporation's subsidiary, Wisper Networks Inc. ("Wisper Networks").

7. The Corporation is currently inactive and is contemplating a series of transactions to reactivate itself (the "Reactivation Transactions").

8. The Reactivation Transactions include: (i) the effective consolidation of all issued and outstanding Common Shares on a one for ten basis; (ii) the settlement of all outstanding indebtedness in consideration for the issuance of post-consolidated Common Shares (the "Debt Settlement"); (iii) a change of corporate name; and (iv) the acquisition of all outstanding securities of a holding company which has recently been formed, whose assets at closing will consist of a Canadian Master Licence of proprietary Internet search software developed by AgentShopper Inc. of Toronto and its affiliates and cash of approximately $350,000 (the "Licence Transaction").

9. Following completion of the Reactivation Transactions, existing holders of Common Shares will hold approximately 18% of the outstanding post-consolidated Common Shares.

10. Shareholders approved the Reactivation Transactions at a special meeting held in Toronto on Wednesday, December 17, 2003 (the "Shareholders' Meeting").

11. The Manager granted the Corporation a partial revocation of the Cease Trade Order on December 16, 2003 solely to permit the Shareholders' Meeting to be held and to permit the shareholders of the Corporation to consider and vote on the Reactivation Transactions (the "Partial Revocation Order").

12. The Corporation sent to its shareholders and filed on SEDAR an information circular (the "Circular") which contains disclosure about the Reactivation Transactions, the Corporation and the proposed business and affairs of the Corporation following the completion of the Reactivation Transactions.

13. The Common Shares of the Corporation were delisted from the TSX Venture Exchange and are currently not listed or quoted on any exchange or market in Canada or elsewhere.

14. Other than its Common Shares, the Corporation has no securities, including debt securities, outstanding.

15. The Corporation has applied for a full revocation of the Cease Trade Order, in order to complete the Reactivation Transactions and to permit the trading of its securities generally.

16. As represented by the Corporation in the Partial Revocation Order, the Corporation has bankrupted its wholly-owned subsidiary Wisper Networks, has prepared and filed on SEDAR new audited statements as at and for the seven month period ended December 31, 2003 which include an unqualified auditors' report and has issued and filed on SEDAR an accompanying press release and material change report.

17. Other than:

(a) the Cease Trade Order;

(b) the Corporation's failure to file or send to its shareholders the Annual Financial Statements with an unqualified auditor's opinion; and

(c) the Corporation's failure to file or send to its shareholders interim financial statements for the six month period ended November 30, 2002 and interim financial statements for the nine month period ended February 28, 2003,

the Corporation is not in default of any requirements of the Act or the rules or regulations thereunder.

AND UPON considering the application and the recommendation of the staff of the Commission.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest.

IT IS ORDERED, pursuant to section 144 of the Act, that the Cease Trade Order be revoked to permit the Corporation to complete the Reactivation Transactions and to permit the trading of its securities generally.

February 27, 2004.

"Kelly Gorman"