Securities Law & Instruments

Headnote

 

Application by an issuer for a 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.

 

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, CHAPTER S.5, AS AMENDED

(the Act)

 

AND

 

IN THE MATTER OF

CARRIE ARRAN RESOURCES INC.

 

ORDER

(Section 144 of the Act)

 

                WHEREAS the securities of Carrie Arran Resources Inc. (the Applicant) were subject to a temporary cease trade order dated December 3, 2015 issued by the Director of the Ontario 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 December 16, 2015 issued by the Director pursuant to paragraph 2 of subsection 127(1) of the Act (as extended, the Ontario Cease Trade Order), directing 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 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 was incorporated under the Canada Business Corporations Act on April 5, 2006.

 

2.             The Applicant’s head office is located at 141 Adelaide Street West, Suite 301, Toronto, Ontario, M5H 3L5.

 

3.             The Applicant is a resource company focused on exploring and developing mineral properties.

 

4.             The Applicant is a reporting issuer under the securities legislation of the provinces of British Columbia, Alberta and Ontario (collectively, the Reporting Jurisdictions) and is not a reporting issuer in any other jurisdiction. The Commission is the principal regulator of the Applicant.

 

5.             The authorized capital of the Applicant consists of an unlimited number of common shares with one vote each, the right to receive dividends and the right to receive the remaining property of the Applicant upon dissolution.

 

6.             Currently there are 4,526,600 common shares issued and outstanding. There are no options, warrants or other securities convertible or exchangeable into common shares currently outstanding.

 

7.             The common shares of the Applicant were previously listed on the TSX Venture Exchange under the symbol SCO. Effective on or about November 25, 2015, the Applicant’s listing was transferred to the NEX Board of the TSX Venture Exchange (the NEX) and the trading symbol was changed from SCO to SCO.H. The listing was then terminated effective May 10, 2017.

 

8.             The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file its audited annual financial statements and related management’s discussion & analysis (MD&A) for the year ended July 31, 2015 within the prescribed time frame as required under National Instrument 51-102 Continuous Disclosure Obligations and related certifications (the NI 52-109 Certificates) as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

 

9.             The Applicant is also subject to a cease trade order issued by the British Columbia Securities Commission (BCSC) on December 10, 2015 (the BC Cease Trade Order, and together with the Ontario Cease Trade Order, the Cease Trade Orders). The Ontario Cease Trade Order is also effective in Alberta due to the Government of Alberta’s 2015 adoption of statutory reciprocal order provisions. The Applicant has concurrently applied to the BCSC for a revocation of the BC Cease Trade Order.

 

10.          Subsequent to the issuance of the Ontario Cease Trade Order, the Applicant has filed the following continuous disclosure documents with the Reporting Jurisdictions:

 

(a)           audited annual financial statements, MD&A and NI 52-109 Certificates for the year ended July 31, 2015;

 

(b)           audited annual financial statements, MD&A and NI 52-109 Certificates for the year ended July 31, 2016;

 

(c)           unaudited interim financial statements, MD&A and NI 52-109 Certificates for the three month period ended April 30, 2017; and

 

(d)           audited annual financial statements, MD&A and NI 52-109 Certificates for the year ended July 31, 2017.

 

11.          The Applicant has not filed the unaudited interim financial statements, MD&A and NI 52-109 Certificates for the periods ended October 31, 2015 through to and including January 31, 2017 (collectively, the Outstanding Filings).

 

12.          The Applicant has filed all outstanding continuous disclosure documents that are required to be filed in the Reporting Jurisdictions other than (i) the Outstanding Filings and (ii) information circulars for shareholder meetings following the 2015 and 2016 year-ends (the Circulars) and (iii) material change reports regarding the resignations of officers and directors as disclosed in a news release in November 2015 and the expiration of the Applicant’s option to acquire a material exploration property (collectively, the Other Filings) in respect of which Other Filings the material information has been disclosed in the continuous disclosure documents filed with the Reporting Jurisdictions as described in Paragraph 10 above.

 

13.          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 and elect not to require the Applicant to file the Outstanding Filings.

 

14.          Except for the failure to file the Outstanding Filings, the Circulars and the Other 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 Ontario Cease Trade Order; and (iii) is not in default of any requirements under the Act or the rules and regulations made pursuant thereto.

 

15.          The Applicant’s securities are not listed or quoted on any other exchange or market in Canada or elsewhere.

 

16.          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.

 

17.          Since the issuance of the Ontario Cease Trade Order, the Applicant has been dormant and there have not been any material changes in the business, operations or affairs of the Applicant, other than the resignations of officers and directors and the expiration of the Applicant’s option to acquire a material exploration property, which have since been disclosed in the continuous disclosure documents filed with the Reporting Jurisdictions.

 

18.          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.

 

19.          The Applicant has filed all outstanding continuous disclosure documents that are required to be filed in the Reporting Jurisdictions other than the Outstanding Filings, the Circulars and the Other Filings.

 

20.          Other than the Cease Trade Orders, the Applicant has not previously been subject to a cease trade order issued by any securities regulatory authority.

 

21.          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.

 

22.          The Applicant has given the Commission a written 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,

 

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).

 

23.          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, the Other Filings 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 November, 2017.

 

“Sonny Randhawa”

Deputy Director, Corporate Finance

Ontario Securities Commission