Securities Law & Instruments

Headnote

Section 144 of the Securities Act (Ontario) -- application for partial revocation of a cease trade order -- issuer cease traded due to failure to file audited annual statements with the Commission-- issuer has applied for partial revocation of the cease trade order to permit the issuer to proceed with a private placement with accredited investors (as such term is defined in National Instrument 45-106 Prospectus and Registration Requirements) resident in Ontario -- issuer will use proceeds from private placement to prepare and file continuous disclosure documents, pay related fees and fund operations -- partial revocation granted subject to conditions.

Statutes Cited

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)

AND

IN THE MATTER OF
TRANZEO WIRELESS TECHNOLOGIES INC.

ORDER
(Section 144 of the Act)



WHEREAS the securities of Tranzeo Wireless Technologies Inc. (the "Applicant") are subject to a temporary cease trade order dated May 13, 2013 and a further cease trade order dated May 24, 2013 issued by the Director of the Ontario Securities Commission (the "Commission"), pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act (together, the "Cease Trade Order");

AND WHEREAS the Cease Trade Order was made on the basis that the Applicant was in default of certain filing requirements under Ontario securities law as described in the Cease Trade Order;

AND WHEREAS additional cease trade orders were issued by the British Columbia Securities Commission on May 8, 2013 (the "B.C. Cease Trade Order") and by the Autorité des marchés financiers on May 13, 2013 (the "Quebec Cease Trade Order");

AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act for a partial revocation of the Cease Trade Order (the "Application");

AND WHEREAS the Applicant has applied to the British Columbia Securities Commission for an order for partial revocation (the "B.C. Partial Revocation Order") of the B.C. Cease Trade Order and received the B.C. Partial Revocation Order on May 30, 2013;

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was continued as a Canadian federal corporation on April 1, 2004 under the Canada Business Corporations Act.

2. The Applicant's registered and head office is located at 19473 Fraser Way, Pitt Meadows, BC, V3Y 2V4.

3. The Applicant is a reporting issuer under the securities legislation of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland.

4. The Applicant's authorized capital consists of an unlimited number of common shares (the "Common Shares"), without par value, and an unlimited number of preferred shares, without par value, of which 72,573,450 Common Shares were issued and outstanding as of the date hereof. The Applicant has no other securities, including debt securities, issued and outstanding.

5. The Common Shares were suspended from trading on the TSX Venture Exchange ("TSXV") as of May 8, 2013 because of the cease trade orders made by the applicable securities commissions.

6. Other than on the TSXV, the securities of the Applicant are not currently listed or quoted on any exchange or market in Canada or elsewhere.

7. The Cease Trade Order was issued as a result of the Applicant's failure to file with the Commission and mail to its shareholders audited annual financial statements for the year ended December 31, 2012 (the "Audited Financial Statements"), management's discussion and analysis relating to the Audited Financial Statements and certification of foregoing filings as required by National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the "Required Documents").

8. The Applicant has applied for and received the B.C. Partial Revocation Order.

9. The Applicant's failure to file the Required Documents was the result of insufficient funds to prepare and file the Required Documents.

10. Except for the Cease Trade Order, the Applicant is not in default of any requirements of the Act or the rules and regulations made pursuant thereto.

11. The Applicant proposes to raise up to $250,000 on a private placement basis (the "Private Placement") in order to: (i) raise sufficient funds to prepare and file the Required Documents and related filing fees to bring it into compliance with its obligations as a reporting issuer, and the associated fees of professional advisors; and (ii) pay outstanding accounts and fund continuing operations, as described more fully in representation 13 below. The Private Placement will be conducted on a prospectus exempt basis and will include subscribers who are accredited investors (as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions) resident in Ontario.

12. The Applicant has obtained conditional approval of the Private Placement from the TSXV.

13. The net proceeds of the Private Placement are estimated to be applied as follows:

Description

Cost

 

Legal, accounting and audit fees

$125,000

 

Penalties and fees for late filings of continuous disclosure documents

$25,000

 

Payment of outstanding payables (including rent outstanding)

$50,000

 

Private Placement finder's fee

$20,000

 

Working capital for continuing operations

$30,000

 

Total Financing Required

$250,000

14. The Applicant believes that the proceeds of the Private Placement will be sufficient to bring its continuous disclosure obligations up to date and to pay all related outstanding fees. The Applicant will use the proceeds of the Private Placement first to pay for the costs associated with bringing its continuous disclosure record up to date. Any remaining amounts will be used to pay for other costs as outlined in representation 13 above.

15. As the Private Placement will involve trades in securities of the Applicant (including, for greater certainty, acts in furtherance of trades in securities of the Applicant), the Private Placement cannot be completed without a variation of the Cease Trade Order.

16. The Private Placement will be completed in accordance with all applicable laws.

17. Prior to the completion of the Private Placement, the Applicant will:

a) provide each investor in the Private Placement with a copy of the Cease Trade Order;

b) provide each investor in the Private Placement with a copy of this Order; and

c) obtain and, upon receipt, provide to the Commission signed and dated acknowledgements from all investors in the Private Placement, which clearly state that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future and that all of the Applicant's securities, including the securities to be issued in connection with the Private Placement, will remain subject to the Cease Trade Order until it is revoked.

18. Following completion of the Private Placement and filing of the Required Documents, the Applicant will apply to the Commission for a full revocation of the Cease Trade Order and will also apply to the British Columbia Securities Commission and the Autorité des marchés financiers for full revocations of the B.C. Cease Trade Order and Quebec Cease Trade Order, respectively.

19. The Applicant is not considering, nor is it involved in any discussion relating to, a reverse take-over, amalgamation, merger or other form of combination or transaction similar to the foregoing.

20. The Applicant has not previously been the subject of a cease trade order other than those referred to in this Order.

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 is partially revoked solely to permit trades in securities of the Applicant in connection with the Private Placement and all other acts in furtherance of the Private Placement that may be considered to fall within the definition of "trade" within the meaning of the Act, provided that:

(a) prior to the completion of the Private Placement, investors in the Private Placement:

(i) receive a copy of the Cease Trade Order;

(ii) receive a copy of this Order; and

(iii) receive a written notice from the Applicant, and provide a signed and dated acknowledgement to the Applicant, clearly stating that all of the Applicant's securities, including the securities to be issued in connection with the Private Placement, will remain subject to the Cease Trade Order until it is revoked, and that the granting of this Order does not guarantee the issuance of a full revocation order in the future;

(b) the Applicant will provide the signed and dated written acknowledgments referred to in paragraph (a)(iii) above to staff of the Commission; and

(c) the Order will terminate on the earlier of the closing of the Private Placement and 60 days from the date hereof.

DATED at Toronto, Ontario on this 17th day of June, 2013.

"Sonny Randhawa"
Manager, Corporate Finance