Securities Law & Instruments

Headnote

 

Application by an issuer for a revocation of a cease trade order – Issuer subject to cease trade order as a result of its failure to file financial statements – Issuer has brought its filings up-to-date – Issuer is otherwise not in default of applicable securities legislation – Issuer has provided an undertaking to the Commission that it will not complete (a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, (b) a reverse takeover with a reverse takeover acquiror that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or (c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, unless the issuer files a preliminary prospectus and a final prospectus with the Ontario Securities Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act.

 

Statutes Cited

 

Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.

 

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990 C. S.5 AS AMENDED

(the “Act”)

 

AND

 

IN THE MATTER OF

ORBUS PHARMA INC.

 

ORDER

(Section 144 of the Act)

 

                WHEREAS the securities of Orbus Pharma Inc. (the Applicant) are subject to a cease trade order dated May 10, 2010 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 issued by the Director on May 21, 2010 pursuant to paragraph 2 of subsection 127(1) of the Act (the Ontario Cease Trade Order) directing that all trading in securities of the Applicant, whether direct or indirect, shall cease until further order 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 below;

 

                AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act to revoke the Ontario Cease Trade Order;

 

                AND UPON the Applicant having represented to the Commission that:

 

1.             The Applicant is a corporation existing under the Business Corporations Act (Alberta) formed pursuant to an amalgamation on June 1, 2006.

 

2.             The head office of the Applicant is located at 3215 – 12th Street NE, Calgary, Alberta, T2E 7S9.

 

3.             The Applicant is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Nova Scotia and is not a reporting issuer in any other jurisdiction in Canada. The Commission is the principal regulator for the Applicant.

 

4.             The authorized capital of the Applicant consists of an unlimited number of Class A common voting shares (the Common Shares) and an unlimited number of Class B common non-voting shares (the Class B Shares), of which 22,547,508 Common Shares and196,500,261 Class B Shares are currently issued and outstanding.

 

5.             Other than the Common Shares and Class B Shares, the Applicant has no securities (including debt securities) issued and outstanding.

 

6.             The Ontario Cease Trade Order was issued as a result of the Applicant failing to file its audited annual financial statements and management’s discussion and analysis (MD&A) for the year ended December 31, 2009 within the timeframe as required under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and related certifications (the NI 52-109 Certificates) as required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109) (collectively, the Annual Filings).

 

7.             The Applicant is also subject to cease trade orders issued by the securities regulators in the Provinces of British Columbia, Manitoba, Alberta and Québec (together with the Commission, the Orbus Pharma Inc.) for failing to file the Annual Filings (the Orbus Pharma Inc., and together with the Ontario Cease Trade Order, theOrbus Pharma Inc.).

 

8.             The Applicant subsequently failed to file other continuous disclosure documents with the Commission within the prescribed timeframe in accordance with the requirements of Ontario securities law, including the following:

 

(a)           all audited financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the years ended December 31, 2010 to December 31, 2015; and

 

(b)           all unaudited interim financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the periods ended March 31, 2010 to September 30, 2016.

 

9.             The Common Shares were suspended from trading on the TSX NEX Exchange on April 30, 2010 for failure to maintain minimum TSX NEX Exchange listing requirements. No securities of the Applicant are listed or traded on any other stock exchange or market in Canada or elsewhere.

 

10.          On September 7, 2010, the Applicant filed a proposal (the Proposal) in accordance with the Bankruptcy and Insolvency Act (Canada) (the BIA) that included a reorganization of the Applicant's share capital and trades of securities of the Applicant. The Proposal was approved by the creditors of the Applicant on September 28, 2010 and the Court on October 18, 2010 as required under the BIA.

 

11.          To facilitate the trades contemplated by the Proposal, the Commission and the Alberta Securities Commission each granted a partial revocation order of the Cease Trade Orders issued by it dated January 13, 2011. The trades were completed on or about April 27, 2011 and a press release and material change report was filed on SEDAR on April 29, 2011 (the Closing).

 

12.          The Applicant has not carried on business since the Closing and has been inactive. Aside from approximately $140,000 cash on hand, it has no material assets or liabilities.

 

13.          Since the issuance of the Ontario Cease Trade Order, the Applicant has filed the following continuous disclosure documents with the Jurisdictions:

 

(a)           audited annual financial statements for the years ended December 31, 2014, December 31, 2015, and December 31, 2016 together with the corresponding MD&As, as required under NI 51-102 and the NI 52-109 Certificates; and

 

(b)           the statement of executive compensation for the year ended December 31, 2016.

 

14.          The Applicant has not filed the following:

 

(a)           the audited financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the years ended December 31, 2009 to December 31, 2013;

 

(b)           the unaudited interim financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the periods ended March 31, 2010 to September 30, 2016; and

 

(c)           the statements of executive compensation for the years ended December 31, 2009 to December 31, 2015.

 

(collectively, the Outstanding Filings).

 

15.          The Applicant has requested that the Commission exercise its discretion in accordance with Section 6 of National Policy 12-202 Revocation of a Compliance-related Cease Trade Order (NP 12-202) and elect not to require the Applicant to file the Outstanding Filings.

 

16.          The Applicant has filed with the Commission all continuous disclosure that it is required to file under the Legislation, except for the Outstanding Filings and any other continuous disclosure that the Commission elected not to require as contemplated in sections 3.1(2) and (3) of NP 12-202, and has paid all activity, participation and late filing fees that it is required to pay to the Commission.


17.          Except for the failure to file the Outstanding Filings, the Applicant (i) is up-to-date with all of its other continuous disclosure obligations; (ii) is not in default of any of its obligations under the Cease Trade Orders; and (iii) is not in default of any requirements under the Act or the rules and regulations made pursuant thereto.

 

18.          As of the date hereof, the Applicant has paid all outstanding activity, participation and late filing fees that are required to be paid to the Commission and has filed all forms associated with such payments.

 

19.          As of the date hereof, the Applicant's profiles on the System for Electronic document Analysis and Retrieval (SEDAR) and the System for Electronic Disclosure by Insiders (SEDI) are current and accurate.

 

20.          Since the imposition of the Ontario Cease Trade Order, there has been no change in the Applicant’s insiders or in the controlling shareholders of the Applicant.

 

21.          Since the imposition of the Ontario Cease Trade Order, the Applicant has been dormant, and there have been no material changes to the Applicant’s business or operations.

 

22.          The Applicant is not considering nor, except as described in representation 23 herein, is it involved in any discussions related to, a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

 

23.          Representatives of the two largest shareholders of the Applicant have met with Gianni Kovacevic, President and CEO of CopperBank Resources Corp ("CopperBank") and discussed a proposed transaction. Mr. Kovacevic has provided the Applicant with a draft non-binding term sheet ("LOI") proposing a business combination between the Applicant and a subsidiary of CopperBank sometime in 2017 after all cease trade orders issued against the Applicant have been lifted. As of the date hereof, the Applicant has neither responded nor provided any formal comments to Mr. Kovacevic, CopperBank or their advisors on the LOI.

 

24.          The Applicant has given the Commission a written undertaking (the “Undertaking”) that:

 

(a)           The Applicant will hold an annual meeting of shareholders within three months after the date on which the Ontario Cease Trade Order is revoked; and

 

(b)           The Applicant will not complete:

 

i.              A restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,

 

ii.             A reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or

 

iii.            A significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,

 

including in each such case, any such transaction contemplated under the LOI

 

unless

 

A.            The Applicant files a preliminary prospectus and a final prospectus with the Commission and obtains receipts for the preliminary and final prospectus from the Director under the Act,

 

B.            The Applicant files or delivers with the preliminary prospectus and the final prospectus the documents required by Part 9 of National Instrument 41-101 General Prospectus Requirements (“NI 41-101”) including a completed personal information form and authorization in the form set out in Appendix A of NI 41-101 for each current and incoming director, executive officer and promoter of the Applicant, and

 

C.            The preliminary prospectus and final prospectus contain the information required by applicable securities legislation, including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable).

 

25.          Upon the revocation of the Ontario Cease Trade Order, the Applicant will issue a news release and concurrently file a material change report on SEDAR announcing the revocation of the Ontario Cease Trade Order and outlining the Applicant’s future plans.


                AND UPON considering the Application and the recommendation of the staff of the Commission;

 

                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 3rd day of May, 2017.

 

“Michael Balter”

Manager, Corporate Finance

Ontario Securities Commission