National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order than the issuer is not a reporting issuer under applicable securities laws -- issuer has outstanding warrants exercisable into securities of acquiror -- warrant holders no longer require public disclosure in respect of the issuer -- relief granted.
Applicable Legislative Provisions
Securities Act (Ontario), ss. 1(10)(a)(ii).
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (THE JURISDICTION) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF NUUVERA INC. (THE FILER)
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. The Filer was incorporated under the Business Corporations Act (Ontario) (the OBCA) on July 17, 2015 as Mira IX Acquisition Corp. The name of the Filer was changed to Nuuvera Inc. pursuant to certificate and articles of amendment dated December 27, 2017.
2. The Filer's head office is at 135 Devon Road, Unit #11, Brampton, Ontario L6T 5A4.
3. On March 23, 2018 (the Effective Date), Aphria Inc. (the Purchaser) acquired all of the issued and outstanding common shares of the Filer, not already owned by it, pursuant to a plan of arrangement under section 182 of the OBCA (the Arrangement), which became effective at 12:01 a.m. (EST) the (Effective Time) on the Effective Date.
4. The Purchaser is a corporation existing under the OBCA. The authorized share capital of the Purchaser consists of an unlimited number of common shares (the Aphria Shares). The Aphria Shares are listed on the Toronto Stock Exchange (the TSX) under the symbol "APH". The Purchaser is a reporting issuer in Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.
5. Immediately prior to the Effective Time, the Filer had the following outstanding securities: (i) 93,360,603 common shares (the Filer Shares); (ii) 3,217,500 options to purchase Filer Shares (the Filer Options); and (iii) 4,704,545 warrants to purchase Filer Shares (the Filer Warrants). The Filer Shares were listed on the TSX Venture Exchange (the TSXV) under the symbol "NUU". No other securities of the Filer were listed on any exchange.
6. To the best of the Filer's knowledge and belief and based on the distribution certificate provided by the co-lead underwriter of the offering pursuant to which the Filer Warrants were distributed, there are 99 holders of Filer Warrants, 4 of which are in Alberta (3,500 Filer Warrants representing 0.07% of the total aggregate Filer Warrants), 14 of which are in British Columbia (24,250 Filer Warrants representing 0.52% of the total aggregate Filer Warrants), 1 of which is in Nova Scotia (1,000 Filer Warrants representing 0.02% of the total aggregate Filer Warrants), 69 of which are in Ontario (3,785,813 Filer Warrants representing 80.47% of the total aggregate Filer Warrants), 2 of which are in the United States (275,000 Filer Warrants representing 5.85% of the total aggregate Filer Warrants) and 9 of which are in other foreign jurisdictions (614,982 Filer Warrants representing 13.07% of the total aggregate Filer Warrants).
7. The notice of special meeting of holders of Filer Shares was delivered to the holders of Filer Shares, Filer Options, and the Filer Warrants in connection with the special meeting of holders of Filer Shares that took place on March 20, 2018 to consider the Arrangement.
8. Pursuant to the Arrangement, among other things, the following occurred as of the Effective Time:
(a) each Filer Share (other than Filer Shares held by the Purchaser or any affiliates thereof) was deemed to be assigned and transferred by the holder thereof to the Purchaser in exchange for $0.62 in cash (the Cash Consideration) and 0.3546 of an Aphria Share (the Share Consideration, together with the Cash Consideration, the Consideration) for each Filer Share; and
(b) each Filer Option (whether vested or unvested) was exchanged for an option to acquire such number of Aphria Shares as is equal to (A) that number of Filer Shares that were issuable upon exercise of such Filer Option immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio (as defined below), rounded down to the nearest whole number of Aphria Shares, at an exercise price per Aphria Share equal to the greater of (i) the quotient determined by dividing: (X) the exercise price per Filer Share at which such Filer Option was exercisable immediately prior to the Effective Time, by (Y) the Exchange Ratio, rounded up to the nearest whole cent, and (ii) such minimum amount that meets the requirements of paragraph 7(1.4)(c) of the Income Tax Act (Canada). The Exchange Ratio means the sum of (i) 0.3546, plus (ii) the fraction resulting from dividing $0.62 by the volume weighted average trading price of the Aphria Shares on the TSX for the 10 day period immediately preceding the Effective Date.
9. Furthermore, pursuant to the warrant indenture dated February 14, 2018 between the Filer and TSX Trust Company (the Warrant Indenture) and the Arrangement, the Purchaser became obligated to provide and each holder of Filer Warrant became obligated to receive, upon the exercise of such holder's Filer Warrant, in lieu of Filer Shares to which such holder was theretofore entitled upon such exercise and for the same aggregate consideration payable theretofore, the number of Aphria Shares and the amount of cash which the holder would have been entitled to receive as a result of the transactions contemplated by the Arrangement if, immediately prior to the Effective Date, such holder had been the registered holder of the number of Filer Shares to which such holder would have been entitled if such holder had exercised such holder's Filer Warrants immediately prior to the Effective Time.
10. The Filer is not required to remain a reporting issuer pursuant to the terms of the Warrant Indenture. The terms of the Warrant Indenture contain provisions addressing, amongst others, a corporate merger, amalgamation, arrangement, or business combination, including the Arrangement, and provide for the payment of the Consideration in lieu of the Filer Shares subsequent to such an event. As a result, no consents or approvals were required from the holders of the Filer Warrants.
11. In connection with the Arrangement, additional Aphria Shares were authorized for issuance upon exercise of the Filer Warrants.
12. The Filer Shares were delisted from the TSXV as of the close of business on March 27, 2018.
13. The Filer is not eligible to surrender its status as a reporting issuer pursuant to the simplified procedure in National Policy 11-206 Process for Cease to be a Reporting Issuer Applications because the Filer Warrants are not 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.
14. The Filer is not a reporting issuer in any jurisdiction of Canada other than the jurisdictions identified in this order. The Filer is applying for an order that it has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer.
15. Upon granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction of Canada.
16. The Filer and the Purchaser are not in default of any of their obligations under the Legislation as reporting issuers.
17. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
18. The Filer has no intention to seek public financing by way of an offering of securities.
19. 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.
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
DATED at Toronto on this 27th day of April, 2018.