Securities Law & Instruments

Headnote

Section 144 of the Securities Act (Ontario) -- application for partial revocation of a cease trade order -- cease trade order was issued due to failure to file audited annual statements and unaudited interim statements -- issuer has applied for partial revocation of the cease trade order to permit the issuer to enter into a definitive agreement and an amalgamation agreement involving the issuer and a private company that will provide funding to bring the issuer's continuous disclosure up to date -- 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 DESERT EAGLE RESOURCES LTD.

ORDER (Section 144)

WHEREAS the securities of Desert Eagle Resources Ltd. (the "Filer") are subject to a temporary cease trade order dated November 7, 2013 issued by the Director pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, and a further cease trade order issued by the Director on November 19, 2013 pursuant to subsection 127(1) of the Act (together, the "Ontario Order") directing that trading in the securities of the Filer cease until the Ontario Order is revoked;

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

AND UPON the Filer having represented to the Commission that:

1. The Filer is a corporation that was incorporated in Ontario on July 24, 1996.

2. The Filer's head office is located at 65 Queen Street West, Suite 815, Toronto, Ontario, M5H 2M5.

3. The Filer is a reporting issuer in Ontario, British Columbia and Alberta. The Filer is not a reporting issuer in any other jurisdiction in Canada.

4. The authorized capital of the Filer consists of an unlimited number of common shares without par value, of which 9,626,741 common shares are issued and outstanding.

5. The Ontario Order was issued as a result of the Filer's failure to file the following continuous disclosure materials as required by Ontario securities law:

a) audited annual financial statements for the year ended June 30, 2013;

b) management's discussion and analysis relating to the audited annual financial statements for the year ended June 30, 2013; and

c) certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings

(collectively, the "2013 Annual Filings").

6. Subsequent to the issuance of the Ontario Order, the Filer also failed to file the following documents:

a) audited annual financial statements, management's discussion and analysis and certifications of annual filings for financial years ended June 30, 2014 and June 30, 2015; and

b) interim financial statements, management's discussion and analysis and certifications of interim filings for each interim financial period subsequent to June 30, 2013

(together with the 2013 Annual Filings, the "Required Filings").

7. The Filer is not in default of any requirements under Ontario securities law other than the failure to file the Required Filings.

8. On November 7, 2013, the British Columbia Securities Commission (the "BCSC") issued a cease trade order (the "British Columbia Order") against the Filer for failure to file its annual audited financial statements, annual management's discussion and analysis and certification of annual filings for the year ended June 30, 2013.

9. On February 18, 2014, the Alberta Securities Commission (the "ASC") issued a cease trade order (the "Alberta Order") against the Filer for failure to file its annual audited financial statements, annual management's discussion and analysis and certification of annual filings for the year ended June 30, 2013 and interim unaudited financial statements, interim management's discussion and analysis, and certification of interim filings for the interim period ended September 30, 2013.

10. The Filer has not previously been the subject of a cease trade order, other than those referred to in this order.

11. The Filer has been unable to file the Required Filings due to financial hardship following successive years of operating losses.

12. The Filer believes that $105,000 will be sufficient to bring its continuous disclosure up to date and to pay all related participation fees and late filing fees.

13. The Filer proposes to negotiate the terms of, and thereafter enter into a definitive agreement (the "Definitive Agreement") with Syracuse Main Inc. ("Syracuse"), a corporation incorporated on July 13, 2015 under the Business Corporations Act (Alberta). Syracuse is not a reporting issuer in any jurisdiction in Canada. Syracuse is engaged in providing to private small and medium enterprises online market platforms to enable those enterprises to raise equity capital. It is proposed that the Definitive Agreement will provide for the following steps (the "Reorganization"):

a) the Filer will continue under the Business Corporations Act (British Columbia);

b) Syracuse will incorporate a corporation under the Business Corporations Act (British Columbia) (the "BC Corporation");

c) the Filer will amalgamate with the BC Corporation pursuant to an amalgamation agreement or an arrangement agreement (the "Reorganization Agreement") to create an amalgamated corporation (the "Amalgamated Corporation");

d) pursuant to the amalgamation, the shareholders of the Filer will, instead of receiving shares of the Amalgamated Corporation, receive common shares of Syracuse, and Syracuse will in turn receive all the common shares of the Amalgamated Corporation; and

e) Syracuse will continue to be engaged in providing to private small and medium enterprises online market platforms to enable those enterprises to raise equity capital.

14. The Reorganization will be carried out in reliance upon the exemption contained in Subsection 2.11(b) of National Instrument 45-106 Prospectus Exemptions.

15. Upon completion of the Initial Steps, defined below, and within a reasonable period of time, the Filer intends to bring its continuous disclosure up to date and apply to the Commission, the BCSC and the ASC to have the Ontario Order, the Alberta Order and the British Columbia Order (together, the "Cease Trade Orders"), respectively, fully revoked. Upon the Cease Trade Orders being fully revoked, the Filer intends to file the Information Circular, defined below, hold the meeting of shareholders of the Filer, referred to below, and complete the Reorganization.

16. The Definitive Agreement will contain a provision that Syracuse will fund all of the costs relating to the Filer bringing its continuous disclosure up to date, as well as the fees and costs relating to the applications to the ASC, the OSC and the BCSC for the full revocation of the Cease Trade Orders, which costs are estimated to be in the amount of $105,000, of which the Filer expects that Syracuse will have sufficient funds to pay, and are allocated as follows:

<<Description>>

<<Cost>>

Application Fees, Filing Fees and Disclosure Costs:

$45,000

Audit and Legal Fees:

<<$60,000>>

Total:

$105,000

17. A meeting of the shareholders of the Filer will be held to approve the Reorganization, and the information circular (the "Information Circular") to be sent to the shareholders and filed on SEDAR at www.sedar.com, will contain disclosure in accordance with NI 51-102, including Section 14.2 of Form 51-102F5 Information Circular.

18. The Filer has applied to the Commission, the BCSC and the ASC for a partial revocation of the Ontario Order, the British Columbia Order and the Alberta Order, respectively, in order to allow the Filer to complete the following steps (the "Initial Steps"):

a) enter into the Definitive Agreement; and

b) enter into the Reorganization Agreement.

19. As the Initial Steps involve trades in securities of the Filer (including, for greater certainty, acts in furtherance of trades in securities of the Filer), the Initial Steps cannot be carried out without a partial revocation of the Cease Trade Orders.

20. The Filer will not carry out any trades, including acts in furtherance of a trade (except for the Initial Steps), until such time as the Cease Trade Orders have been fully revoked.

21. Prior to the completion of the Initial Steps, the Filer will:

a) provide to Syracuse a copy of the Ontario Order;

b) provide to Syracuse a copy of this partial revocation order; and

c) obtain from Syracuse a signed and dated acknowledgement, which clearly states that all of the Filer's securities will remain subject to the Cease Trade Orders, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

22. Upon issuance of this order, the Filer will issue a press release announcing the order and the intention to enter into the Definitive Agreement. Upon entering into the Definitive Agreement, the Filer will issue a press release. As material events transpire, the Filer will issue appropriate press releases and file material change reports as applicable.

AND UPON considering the Application and the recommendations 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 Ontario Order is partially revoked solely to permit trades in securities of the Filer (including, for greater certainty, acts in furtherance of trades in securities of the Filer) that are necessary for and are in connection with the Initial Steps, provided that:

a) prior to the completion of the Initial Steps, the Filer will:

i. provide to Syracuse a copy of the Ontario Order;

ii. provide to Syracuse a copy of this partial revocation order; and

iii. obtain from Syracuse a signed and dated acknowledgement, which clearly states that all of the Filer's securities will remain subject to the Cease Trade Orders, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future;

b) The Filer will make available to staff of the Commission on request, a copy of the written acknowledgement referred to in paragraph (a)iii; and

c) This order will terminate on the earlier of the completion of the Initial Steps and 90 days from the date hereof.

DATED at Toronto, Ontario on this 7th day of July, 2016.

"Michael Tang"
Acting Manager, Corporate Finance
Ontario Securities Commission