Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- application for an order that the issuer is not a reporting issuer.

Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10).

December 6, 2013

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO AND ALBERTA
(the Jurisdictions)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
LIPARI ENERGY, INC.
(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer is not a reporting issuer (the Order Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

Terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer was continued under the Business Corporations Act (British Columbia) pursuant to a reverse take-over which was completed on March 11, 2011.

2. The Filer's head office is located in London, Kentucky in the United States and its registered office in Vancouver, British Columbia.

3. The Filer is currently a reporting issuer in each of Alberta and Ontario.

4. The authorized share capital of the Filer consists of an unlimited number of common shares (the Common Shares), an unlimited number of restricted voting shares (the Restricted Shares) and common share purchase warrants (the Warrants).

5. The Common Shares and Warrants were listed on the Toronto Stock Exchange (the TSX). The Restricted Shares were not listed.

6. On October 31, 2013, 0976837 B.C. Ltd. (the Purchaser) acquired all of the issued and outstanding Common Shares and Restricted Shares of the Filer by way of a court approved plan of arrangement (the Arrangement) pursuant to Section 288 of theBusiness Corporations Act (British Columbia). The Arrangement was effected pursuant to an arrangement agreement dated effective August 22, 2013, as amended on September 20 and October 28, 2013. Under the terms of the Arrangement, the Purchaser acquired all the Common Shares and Restricted Shares which it did not already own for cash consideration of CAD$0.48 per Common Share and CAD$0.48 per Restricted Share. The cash consideration represented approximately a 25% premium to the 20-day volume weighted average price of the Common Shares on the TSX for the period ending August 22, 2013. The transaction provided total consideration to public shareholders of up to approximately CAD$9.9 million and implied an equity value for the Filer of approximately CAD$22.7 million all as more fully described in the management information circular of the Filer dated April 2, 2013.

7. On October 29, 2013, the Arrangement was approved by the holders of Common Shares and Restricted Shares of the Filer.

8. The Common Shares and Warrants were delisted from trading on the TSX on November 1, 2013.

9. The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.

10. No securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

11. The Filer is applying for a decision that it is not a reporting issuer in all of the jurisdictions of Canada in which it is currently a reporting issuer.

12. The Filer voluntarily surrendered its status as a reporting issuer in British Columbia pursuant to BC Instrument 11-102 -- Voluntary Surrender of Reporting Issuer Status, effective November 15, 2013.

13. The Filer is not in default of any of its obligations under the legislation as a reporting issuer as of the date hereof, other than the obligation to file its interim financial statements, management's discussion and analysis and certification of interim filings for the interim period ended September 30, 2013 (the Interim Filings), as required under National Instrument 51-102 Continuous Disclosure Obligations and the related certification of such financial statements as required under National Instrument 52-109 Certification of Disclosure in Filers' Annual and Interim Filings, all of which became due on November 14, 2013.

14. The Filer is not eligible to use the simplified procedure under CSA Staff Notice 12-307 Application for a Decision that an Issuer is not a Reporting Issuer because it is in default of its obligation to file the Interim Filings.

15. The Filer has no current intention to seek public financing by way of an offering of securities.

16. The Filer, upon the granting of the Order Sought, will no longer be a reporting issuer or the equivalent thereof in any jurisdiction in Canada.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the Decision.

The decision of the Decision Makers under the Legislation is that the Order Sought is granted.

"James Turner"
Commissioner
Ontario Securities Commission
 
"Judith Robertson"
Commissioner
Ontario Securities Commission