Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the Business Corporations Act (British Columbia).
Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.
Securities Act, R.S.O. 1990, c. S.5, as am.
Regulation made under the Business Corporations Act, Ont. Reg. 289/00, as am., s. 4(b).
IN THE MATTER OF R.R.O 1990, REGULATION 289/00, AS AMENDED (the "Regulation") MADE UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO), R.S.O. 1990, c. B.16, AS AMENDED (the "OBCA") AND IN THE MATTER OF KINGSWAY ARMS RETIREMENT RESIDENCES INC.
CONSENT (Subsection 4(b) of the Regulation)
UPON the application of Kingsway Arms Retirement Residences Inc. (the "Applicant") to the Ontario Securities Commission (the "Commission") requesting a consent from the Commission pursuant to subsection 4(b) of the Regulation, for the Applicant to continue into the Province of British Columbia, (the "Continuance") pursuant to Section 181 of the OBCA;
AND UPON considering the application and recommendation of the staff of the Commission;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant was incorporated under the OBCA by articles of incorporation effective May 31, 2007. The Applicant amalgamated with its two wholly owned subsidiaries, 2322003 Ontario Inc. and 2172568 Ontario Limited, pursuant to articles of amalgamation effective July 31, 2015.
2. The Applicant's head and registered office is located at 208 Evans Avenue, Suite 115, Toronto, Ontario, M8Z 1J7.
3. The authorized share capital of the Applicant currently consists of an unlimited number of common shares ("Common Shares") and an unlimited number of Class A preferred shares ("Class A Shares"), of which, as at March 31, 2016, there were 20,290,000 Common Shares and no Class A Shares outstanding. The Common Shares are listed for trading on the TSX Venture Exchange (the "TSXV") under the symbol "KWA". The Applicant does not have any securities listed on any other exchange except the TSXV.
4. The Applicant intends to make an application to the Director under section 181 of the OBCA (the "Application for Continuance") for authorization to continue into the Province of British Columbia under the Business Corporations Act (British Columbia), S.B.C. 2002, c. 57 (the "BCBCA"). The Applicant intends to change its name to "Mainstreet Health Investments Inc." in connection with the Continuance, and also change the trading symbol for its Common Shares on the TSXV to "HLP". The Applicant has a name reservation granted by the Registrar of Companies, British Columbia in the name "Mainstreet Health Investments Inc.", under name reservation number NR 6254706.
5. Pursuant to subsection 4(b) of the Regulation, where a corporation is an "offering corporation" (as the term is defined in the OBCA), the Application for Continuance must be accompanied by a consent from the Commission.
6. The Applicant is an "offering corporation" under the OBCA and is a reporting issuer under the Securities Act (Ontario), R.S.O. 1990, c. S.5, as amended (the "Act") and is also a reporting issuer under the securities legislation of British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick and Nova Scotia, (collectively, with the Act, the "Legislation"). The Applicant is not a reporting issuer or equivalent in any other jurisdiction.
7. The Commission is the Applicant's principal regulator. Following the Continuance, the Commission will remain as the Applicant's principal regulator.
8. The Applicant is not in default under any provision of the OBCA or the Legislation, or any of the regulations or rules made under the OBCA or the Legislation.
9. The Applicant is not a party to any proceeding or, to the best of its knowledge, information and belief, any pending proceeding under the OBCA or the Legislation.
10. A summary of the material provisions respecting the proposed Continuance was provided to the holders of Common Shares ("Shareholders") of the Applicant in the management information circular of the Applicant dated February 29, 2016 (the "Circular") in respect of the Applicant's annual and special meeting of Shareholders held on March 30, 2016 (the "Meeting"). The Circular was mailed to Shareholders of record at the close of business on February 29, 2016 and was filed on the System for Electronic Document Analysis and Retrieval on March 1, 2016.
11. In accordance with the OBCA, the special resolution of Shareholders obtained at the Meeting in connection with the proposed Continuance (the "Continuance Resolution") required the approval of a minimum majority of 66 2/3% of the aggregate votes cast by Shareholders present in person or by proxy at the Meeting. Each Shareholder was entitled to one vote for each Common Share held.
12. Shareholders had the right to dissent with respect to the proposed Continuance pursuant to Section 185 of the OBCA, and the Circular disclosed full particulars of this right in accordance with applicable law.
13. The Continuance Resolution was approved at the Meeting by 99.69% of the votes cast by the Shareholders in respect of the Continuance Resolution. None of the Shareholders exercised dissent rights pursuant to section 185 of the OBCA.
14. Following completion of the Continuance, the registered office of the Applicant will be located in British Columbia and the head office of the Applicant will remain in Ontario.
15. The Applicant believes that the BCBCA will provide the Applicant with greater flexibility than the OBCA with respect to the payment of dividends. Given that the BCBCA does not impose the same limitations on declarations of dividends as the OBCA, the Applicant seeks to continue under the BCBCA because the BCBCA will enable the Applicant to declare and pay dividends in a wider range of scenarios. Full disclosure of the reasons for and implications of the proposed Continuance were included in the Circular.
16. The material rights, duties and obligations of a corporation governed by the BCBCA are substantially similar to those of a corporation governed by the OBCA. A summary of certain differences between the two statutes, which was not intended to be exhaustive, was included in the Circular.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
THE COMMISSION HEREBY CONSENTS to the continuance of the Applicant as a corporation under the BCBCA.
DATED at Toronto, Ontario this 1st day of April, 2016.