Section 144 -- Application by an issuer for a full revocation of a cease trade order issued by the Commission -- cease trade order issued because the issuer had failed to file certain continuous disclosure materials required by Ontario securities law -- defaults subsequently remedied by bringing continuous disclosure filings up-to-date -- cease trade order revoked.
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, CHAPTER S.5, AS AMENDED (the Act) AND IN THE MATTER OF RED ORE GOLD INC.
ORDER (Section 144 of the Act)
WHEREAS the securities of Red Ore Gold Inc. (the Applicant) are subject to a temporary cease trade order dated September 11, 2014 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, as extended by a further cease trade order dated September 23, 2014 made by the Director, pursuant to paragraph 2 of subsection 127(1) of the Act (collectively, the Ontario Cease Trade Order), ordering that all trading in the securities of the Applicant, whether direct or indirect, cease until the Ontario Cease Trade Order is revoked by the Director;
AND WHEREAS the Ontario 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 Ontario Cease Trade Order;
AND WHEREAS the Commission issued a partial revocation of the Ontario Cease Trade Order on March 11, 2016 solely to permit trades in securities of the Applicant in connection with a private placement and all other acts in furtherance of that private placement (the Partial Revocation);
AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act for a full revocation the Ontario Cease Trade Order;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant was incorporated under the Business Corporations Act (British Columbia) on January 13, 2011.
2. The head office of the Applicant is located at #206-2290 Marine Drive, West Vancouver, B.C. V7V 1K4. The Applicant's principal regulator is the British Columbia Securities Commission (BCSC).
3. The Applicant is an exploration stage junior mining company.
4. The Applicant's authorized share capital consists of an unlimited number of common shares of which 26,180,227 are issued and outstanding and an unlimited number of preference shares of which none are issued and outstanding. The Applicant has 4,350,000 common share purchase warrants exercisable at a price of $0.033 per common share until May 9, 2018.
5. The Applicant has no other securities, including debt securities, issued and outstanding.
6. The Applicant's securities are not listed on any stock exchange or quotation system.
7. The Applicant is a reporting issuer under the securities legislation of the provinces of British Columbia, Alberta and Ontario (collectively, the Reporting Jurisdictions). The Applicant is not a reporting issuer or the equivalent in any other jurisdiction in Canada.
8. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file its audited annual financial statements, as well as the corresponding management's discussion and analysis (MD&A) and certifications of such annual filings as required by National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109) for the fiscal year ended April 30, 2014 (collectively, the Annual Filings). The Annual Filings were not filed in a timely manner as a result of the Applicant's financial difficulties.
9. The Applicant is also subject to (i) a cease trade order dated September 8, 2014 (the BC Cease Trade Order) issued by the BCSC as a result of its failure to file its audited annual financial statements and the corresponding MD&A for the fiscal year ended April 30, 2014, and (ii) a cease trade order dated December 9, 2014 (the Alberta Cease Trade Order) issued by the Alberta Securities Commission (the ASC) for failure to file the Annual Filings and its interim unaudited financial statements, the related MD&A and certifications of interim filings as required by NI 52-109 for the period ended July 31, 2014. The Applicant has concurrently applied to the BCSC and the ASC for a full revocation of the BC Cease Trade Order and the Alberta Cease Trade Order.
10. In connection with the Partial Revocation of the Ontario Cease Trade Order and similar orders that were issued by the BCSC and the ASC on March 11, 2016 respectively, the Applicant completed a non-brokered private placement of units pursuant to which an aggregate of 4,350,000 were sold at a price of $0.025 per unit for aggregate gross proceeds of $108,750 (the Offering).
11. Since the issuance of the Ontario Cease Trade Order, the Applicant has filed the following continuous disclosure documents on May 3, 2016:
(i) Form 13-502F2 -- Class 2 Reporting Issuer -- Participation Fee for the years ended April 30, 2014 and April 30, 2015;
(ii) the Annual Filings;
(iii) audited annual consolidated financial statements, MD&A and NI 52-109 certificates of the Applicant for the fiscal year ending April 30, 2015;
(iv) the unaudited interim financial statements, MD&A and NI 52-109 certificates of the Applicant for the period ended July 31, 2015;
(v) the unaudited interim financial statements, MD&A and NI 52-109 certificates of the Applicant for the period ended October 31, 2015; and
(vi) the unaudited interim financial statements, MD&A and NI 52-109 certificates of the Applicant for the period ended January 31, 2016.
12. The Applicant has not filed interim unaudited financial statements, corresponding MD&A and NI 52-109 certificates for the periods ending July 31, 2014, October 31, 2014 and January 31, 2015 (collectively, the Outstanding Filings).
13. The Applicant has requested that the Commission exercise its discretion in accordance with subsection 3.1(2) of National Policy 12-202 Revocation of a Compliance-related Cease Trade Order and elect not to require the Applicant to file the Outstanding Filings.
14. Except for the failure to file the Outstanding Filings, the Applicant is not in default of any requirements under applicable securities legislation or the rules and regulations made pursuant thereto in any of the Reporting Jurisdictions, except for the existence of the Ontario Cease Trade Order, the BC Cease Trade Order and the Alberta Cease Trade Order (collectively, the Cease Trade Orders).
15. As of the date hereof, the Applicant has paid all outstanding activity, participation and late filing fees that are required to be paid.
16. Since the issuance of the Cease Trade Orders, there have been no material changes in the business, operations or affairs of the Applicant which have not been disclosed by the Applicant via news release and/or material change report and filed on SEDAR.
17. Except for the failure to file the Outstanding Filings, the Applicant has filed all outstanding continuous disclosure documents that are required to be filed in the Reporting Jurisdictions and is up-to-date with all of its continuous disclosure obligations.
18. Other than the Cease Trade Orders, the Applicant has not previously been subject to a cease trade order issued by any securities regulatory authority.
19. The Applicant is not considering, nor is it involved in any discussions relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.
20. The Applicant intends to hold an annual meeting of shareholders within 90 days of the revocation of the Cease Trade Orders and will prepare a management information circular which will be mailed to shareholders and filed on SEDAR in accordance with Form 51-102F5.
21. The Applicant's SEDAR issuer profile and SEDI issuer profile supplement are current and accurate.
22. Upon the revocation of the Cease Trade Orders, the Applicant will issue a news release and concurrently file a material change report on SEDAR announcing the revocation of the Cease Trade Orders and to outline the Applicant's future plans.
AND UPON considering the application and the recommendation of the staff of the Commission; and
AND UPON the Director being satisfied that it would not be prejudicial to the public interest to revoke the Ontario Cease Trade Order;
IT IS ORDERED pursuant to section 144 of the Act that the Ontario Cease Trade Order is revoked.
DATED at Toronto this 17th day of May, 2016.