Section 144 -- partial revocation of cease trade order to permit certain trades pursuant to the terms of a CCAA Plan of Arrangement and Compromise, a stock consolidation and a private placement.
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 C.S.5, AS AMENDED (THE "ACT")
IN THE MATTER OF
AGRO PACIFIC INDUSTRIES LTD.
WHEREAS the securities of Agro Pacific Industries Ltd. (the "Applicant") are subject to a cease trade order issued by the Ontario Securities Commission (the "Commission") on November 11, 2003 (the "Cease Trade Order");
AND WHEREAS the Applicant has applied to the Commission pursuant to section 44 of the Act (the "Application") for a partial revocation of the Cease Trade Order;
AND WHEREAS the Applicant has represented to the Commission that:
1. The Applicant was formed on November 1, 1997 by amalgamation under the Companies Act (British Columbia). On May 21, 2002, the Applicant was continued as a federal company under the Canada Business Corporations Act.
2. The Applicant is a reporting issuer under the securities legislation (the "Legislation") of the provinces of British Columbia and Ontario.
3. The authorized share capital of the Applicant consists of an unlimited number of common shares with no par value, of which 7,687,138 common shares were issued and outstanding as of June 17, 2004. Other than its common shares, the Applicant has no securities, including debt securities, outstanding.
4. The Order was issued as a result of the Applicant's failure to file its interim financial statements for the nine month period ended July 31, 2003. Subsequently, the Applicant failed to file its audited financial statements for the year ended October 31, 2003 and the interim financial statements for the three month period ended January 31, 2004.
5. The Applicant is also subject to a cease trade order issued by the British Columbia Securities Commission (the "BCSC") on November 6, 2003, relating to the failure of the Applicant to file its interim financial statements for the nine months ended July 31, 2003. The Applicant has concurrently applied for a partial revocation of that cease trade order.
6. The Applicant sought the protection of the Supreme Court of British Columbia pursuant to the Companies' Creditors Arrangement Act ("CCAA") on March 27, 2000. The Applicant made a Plan of Arrangement and Compromise (the "Plan") dated for reference March 22, 2001. The Plan was approved by the creditors of the Applicant on April 18, 2001 and approved by the courts on April 26, 2001.
7. The Plan, among other items, provided that the unsecured creditors would receive common shares of the Applicant as settlement of the remaining debt owed to unsecured creditors. It was contemplated that common shares in the Applicant equal to 2.75 times the number of shares held by existing shareholders of the Applicant, would be issued to the unsecured creditors. Given that there are 7,687,138 common shares issued and outstanding, the Applicant is required to issue 21,139,630 of its common shares to unsecured creditors as settlement for approximately $12 million of debt compromised by CCAA (the "CCAA Shares"). Upon issuing the CCAA Shares, the Applicant will have 28,826,768 common shares issued and outstanding.
8. An extraordinary general meeting of the shareholders of the Applicant was held on February 12, 2003. The Applicant shareholders were asked to approve, among other items, the issuance of the CCAA Shares, a stock consolidation on a basis of one new share for every ten old shares (the "Stock Consolidation") and a change of name from "Agro Pacific Industries Ltd." to "Agstar Power Incorporated" or such other name as recommended by management. These resolutions were passed by the shareholders of the Applicant.
9. On January 17, 2003, the Toronto Stock Exchange suspended trading of the shares of the Applicant for failure to meet certain continuous listing requirements of the Toronto Stock Exchange. On January 16, 2004, the Applicant's common shares were de-listed from the Toronto Stock Exchange. The Applicant's common shares are not listed or quoted on any other exchange or market in Canada or elsewhere.
10. To bring its continuous disclosure records up to date, the Applicant proposes to file on SEDAR its audited financial statements for the fiscal year ended October 31, 2003, and its interim financial statements for the nine month period ended July 31, 2003 and for the three month period ended January 31, 2004 (collectively, the "Financial Statements"). The Applicant is awaiting the completion of the audited financial statements and they will be filed on SEDAR when completed.
11. The Applicant is currently inactive and has no business operations. The Applicant has a working capital deficit of approximately $100,000 as at June 17, 2004, not including the $12 million in debt compromised by CCAA.
12. The Applicant has been in discussions with the TSX Venture Exchange (the "TSXV") regarding the listing of its shares on the NEX board.
13. In conjunction with the foregoing, the Applicant wishes to proceed with the proposed CCAA Share issuance and the Stock Consolidation and to change the name of the company to "Adriana Ventures Inc.", subject to regulatory approval. Following the CCAA Share issuance and the Stock Consolidation, the Applicant will have approximately 2,882,677 common shares issued and outstanding.
14. To fund the cost of the issuance of CCAA Shares, the Stock Consolidation, the name change, cost of legal and accounting professionals, and for general working capital, the Applicant is proposing to complete a private placement of equity securities to raise gross proceeds of $142,500 (the "Private Placement") by issuing 2,850,000 post-consolidated common shares at a price per share of $0.05.
15. The Applicant cannot complete the issuance of the CCAA Shares, the Stock Consolidation or the Private Placement because of the Order.
16. The Private Placement is to be completed in compliance with all applicable policies of the NEX board of the TSXV and applicable securities legislation.
17. The Applicant will provide written notice to the recipients of the CCAA Shares and the Private Placement shares that all of the Applicant's securities, including the CCAA Shares and the common shares issued under the Private Placement, will remain subject to the Order.
AND WHEREAS considering the Application and the recommendation of the staff of the Commission;
AND WHEREAS the Director 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 and is hereby partially revoked solely to permit the issuance of the CCAA Shares, the Stock Consolidation and the issuance of the Private Placement shares and all acts in furtherance of the completion of the issuance of the CCAA Shares, the Stock Consolidation and the Private Placement.
June 21, 2004.