Gram Minerals Corp. -- s. 144

Headnote

Section 144 of the Securities Act (Ontario) -- Application for variation of cease trade order -- Applicant cease traded due to failure to file with the Commission audited annual financial statements -- Since June 30, 2001 the Applicant has not filed any documents on SEDAR -- Issuer has applied for a variation of the cease trade order to permit the issuer to proceed with a Private Placement with an accredited investor (as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions) -- All trades associated with the Private Placement will take place in Ontario -- The Applicant will use the proceeds from the Private Placement to complete its required continuous disclosure document and pay all outstanding regulatory fees owing -- The Applicant has undertaken to the Commission to deliver a copy of the information circular related to any transaction -- Partial revocation granted subject to conditions.

Applicable Legislative Provisions

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

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S.5, AS AMENDED

(the Act)

AND

IN THE MATTER OF

GRAM MINERALS CORP.

ORDER

(Section 144 of the Act)

WHEREAS the securities of Gram Minerals Corp. (the Applicant) are currently subject to a temporary cease trade order made by the Ontario Securities Commission (the Commission) dated November 26, 2001 pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, which order was extended by a further order of the Commission dated December 10, 2001 (collectively, the Cease Trade Order) ordering that trading in the securities of the Applicant cease;

AND WHEREAS additional cease trade orders were issued by the Alberta Securities Commission in December 21, 2001, and by the British Columbia Securities Commission on January 8, 2002 (the Additional Orders);

AND WHEREAS notwithstanding the Additional Orders, the Applicant has applied only to the Commission pursuant to Section 144 of the Act for an order partially revoking the Cease Trade Order to permit a private placement to parties resident solely in Ontario;

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated on September 12, 1996 under the Canada Business Corporations Act. The Applicant maintains a registered office at 360 Linden Drive, Cambridge, Ontario N3H 5L5 and a mailing address at 220 Bay Street, Suite 500, Toronto Canada, M5J 2W4. The Applicant's records are currently located at 220 Bay Street, Suite 500, Toronto Canada, M5J 2W4.

2. The authorized share capital of the Applicant consists of an unlimited number of common shares, of which 7,260,852 common shares are issued and outstanding as of January 3, 2012.

3. Other than the common shares, there are no other securities (including debt securities) outstanding.

4. The Applicant has been inactive for many years and has no material assets.

5. The Applicant is a reporting issuer or the equivalent under the securities legislation of the provinces of Ontario, Alberta and British Columbia. The Applicant is not a reporting issuer in any other jurisdiction in Canada.

6. The common shares of the Applicant are not listed or quoted on any exchange or market in Canada or elsewhere.

7. The Cease Trade Order was issued on November 26, 2001 due to the failure by the Applicant to file with the Commission audited annual financial statements for the 3 month period ended June 30, 2001, as required by the Act (the Statements). The Applicant has further failed to file interim financial statements and related MD&A for subsequent periods to date (together with the Statements, the Financial Statements).

8. Since that time the Applicant has not filed any documents on SEDAR.

9. The Applicant has not been previously subject to a cease trade order by the Commission.

10. The Applicant was listed on the Canadian Dealing Network on June 3, 1998 and delisted from the TSX Venture Exchange on June 5, 2002.

11. Except for the Cease Trade Order, the Applicant is not in default of any of the requirements of the Act or the rules and regulations made thereunder, other than the Applicant's failure to file the following documents:

(a) audited annual financial statements for the years ended June 30, 2001 through 2012 inclusive;

(b) interim financial statements for the interim periods beginning on September 30th, 2001 and ending on March 31, 2012;

(c) management's discussion and analysis relating to the financial statements referred to in paragraphs (a) and (b) above; and

(d) certificates required to be filed in respect of the financial statements referred to in paragraphs (a) and (b) above under National Instrument 52-109.

12. The Financial Statements were not filed with the Commission due to a lack of funds to pay for the preparation and, in respect of the annual financial statements, the audit of, year-end Financial Statements.

13. The Applicant is seeking to effect a financing transaction to enable the Applicant to bring itself into compliance with its continuous disclosure obligations and to fund expenses as more properly outlined in paragraph 17 below. The actions associated therewith may constitute a contravention of the Cease Trade Order. More specifically, the Applicant seeks a partial revocation of the Cease Trade Order to allow the Applicant to complete a non-brokered private placement of its securities (the Private Placement) with an accredited investor (as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions) resident in the Province of Ontario (the Potential Investor) to raise gross proceeds of up to $70,000. The Applicant is proposing to sell a convertible debenture (the Convertible Debenture) allowing the holder to convert the amount owing under the debenture into common shares at a price of $0.01 per common share.

14. All trades associated with the Private Placement will take place in Ontario and the Private Placement will be completed in accordance with applicable securities legislation.

15. The Applicant will use the proceeds from the Private Placement to complete the preparation, audit and filing of the Financial Statements, bring its continuous disclosure records up to date and improve the Applicant's financial position. The Applicant further intends to, within a reasonable time following closing of the Private Placement and preparation of continuous disclosure documents, apply to the Commission for a full revocation of the Cease Trade Order and also apply to the Alberta Securities Commission and British Columbia Securities Commission for full revocations of the Additional Orders.

16. The use of proceeds is estimated to be applied as follows:

(a)	Fees and penalties for past late filing of materials:	$30,000
(b)	Accounting fees to produce quarterly financial statements and audited year-end financial statements for March 31, 2000 and subsequent up to December 31st 2011:	$15,000
(c)	Payment of Transfer Agent Fees arrears:	$5,000
(d)	Legal fees to document the convertible debenture, effect the filing of the continuous disclosure materials and review of same, preparation of materials to procure an order from the Commission for the full lifting of the Cease Trade Order:	$20,000
	<<Total>>	<<$70,000>>

17. The Applicant reasonably believes that it will have sufficient resources upon completion of the Private Placement to complete its required continuous disclosure documents, pay all outstanding fees owed to the Commission, pay Transfer Agent Fees arrears and pay all related legal fees.

18. Prior to the completion of the Private Placement, the Potential Investor in the Private Placement will receive:

(a) a copy of the Cease Trade Order;

(b) a copy of the partial revocation order; and

(c) written notice from the Applicant requiring the Potential Investor to acknowledge that all of the Applicant's securities, including the securities issued in connection with the Private Placement will remain subject to the Cease Trade Order until it is revoked, and that the granting of the partial revocation does not guarantee the issuance of a full revocation order in the future.

19. Upon the issuance of the partial revocation from the Commission, the Applicant will:

(a) issue a press release and file a material change report announcing, among other things, the Private Placement and the partial revocation order;

(b) market the Private Placement and provide information relating to the Applicant to the Potential Investor in accordance with the provisions of the partial revocation order and in accordance with the Act and the rules and regulations made pursuant thereto; and

(c) issue securities in connection with the Private Placement.

20. As the Private Placement would involve a trade of securities and acts in furtherance of trades, the Private Placement could not be completed without a partial revocation of the Cease Trade Order.

21. The Applicant undertakes to hold its annual meeting of shareholders within three months of the date that the Cease Trader Order is revoked in full.

22. The Applicant has undertaken to the Commission that, in the event the Applicant convenes a meeting of shareholders within eighteen months of the date of this partial revocation order to consider and approve any transaction, including the Private Placement or any transaction involving a reverse takeover, merger, amalgamation, business combination or other form of combination of transaction similar to any of the foregoing, the Applicant will deliver to the Commission a copy of the information circular relating to such meeting not less than twenty days prior to the date such information circular is delivered to the shareholders.

23. Once the Cease Trade Order is fully lifted, the Potential Investor proposes to purchase all of the debt and 4,132,000 common shares of the Applicant from the controlling shareholder of the Applicant and his former spouse and his colleague.

24. Once the Cease Trade Order is lifted the Applicant proposes to seek a business combination with an unrelated Canadian entity yet to be identified and if such combination so qualifies, the Applicant will apply to the TSX Venture Exchange to list its shares on that exchange.

25. Prior to any application being made to the Commission for a partial lifting of the Cease Trade Order, the Applicant prepared and distributed an information circular in connection with a shareholders' meeting convened to approve the Private Placement. Although the information circular contemplated the revocation of the Cease Trade Order before any securities of the Applicant were issued, the Applicant's actions in holding a shareholders' meeting to approve the proposed Private Placement may have contravened the terms of the Cease Trade Order since they contemplated issuance of the Applicant's securities to Cardon Equities Ltd.

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

AND UPON 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 trades and acts in furtherance of trades in connection with the Private Placement as to the issuance of the Convertible Debenture, but not the conversion thereof until a full lifting of the Cease Trade Order has been obtained, nor to permit the issuance of any other securities by the Applicant, provided that:

(a) prior to the Private Placement the Applicant will:

(i) provide to the Potential Investor in the Private Placement a copy of the Cease Trade Order and this Order;

(ii) receive a statement from the Potential Investor in the Private Placement that all of the Applicant's securities, including the Convertible Debenture, will remain subject to the Cease Trade Order until it is revoked; and

(iii) obtain and provide to the Commission a signed and dated acknowledgement from the Potential Investor in the Private Placement which clearly states that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

(b) this Order will terminate on the earlier of:

(i) the closing of the Private Placement; and

(ii) 60 days from the date hereof.

DATED at Toronto on this 19th day of September, 2012.