Mistral Pharma inc. - s. 1(10)(b)

Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- Application by a reporting issuer for a decision that it is not a reporting issuer -- Filer has no publicly held securities -- No intention to seek public financing -- Application under NP 11-203 because of failure to file certain documents -- Requested exemptive relief granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(b).

November 4, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC, ALBERTA AND ONTARIO

(the "Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

MISTRAL PHARMA INC.

(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Makers") has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation") that the Filer is not a reporting issuer in the Jurisdictions (the "Requested Exemptive Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):

(a) the Autorité des marchés financiers is the principal regulator for this application, and

(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions (elsewhere, National Instrument 14-101 Definitions) have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation governed by the Canadian Business Corporations Act (Canada) (the "CBCA") with its head office located at 1717, Trans-Canada Highway, Dorval, Québec.

2. The Filer obtained creditor approval under the Bankruptcy and Insolvency Act (the "BIA") of a proposal (the "Proposal") on September 4, 2008.

3. The Proposal provides for a reorganization of the Filer under section 191 of the CBCA (the "Reorganization") consisting in (i) the cancellation and annulment of all the existing shares, rights, warrants and options for all purposes, and (ii) the creation of a new class of common shares (the "New Common Shares").

4. Pursuant to a subscription agreement dated September 9, 2008 entered into between the Filer and Pharmascience Inc. ("Pharmascience"), Pharmascience has agreed to subscribe to New Common Shares for an aggregate consideration of $2,640,000, conditional upon the implementation of the Proposal and the completion of the Reorganization (collectively, the "Transaction").

5. The Quebec Superior Court of Justice (Commercial Division) (the "Court") made a final order approving the Proposal under the BIA on September 15, 2008.

6. On September 26, 2008, the Filer's Creditors and the Court approved the Proposal.

7. The Reorganization was implemented and is effective since the first moment in time on September 26, 2008.

8. Upon the Reorganization implementation, all of the outstanding shares, rights, warrants and options of the Filer were cancelled.

9. Upon the completion of the Transaction, new common shares of the Filer were issued to Pharmascience. Consequently, Pharmascience is now the sole shareholder of the Filer.

10. At the close of the market on September 30, 2008, the common shares of the Filer were delisted from the TSX Venture Exchange.

11. As a result of the completion of the Transaction, the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 security holders in each of the jurisdictions in Canada and fewer than 51 security holders in total in Canada.

12. No securities of the Filer are traded on a marketplace as defined in Regulation 21-101 respecting Marketplace Operation (elsewhere, National Instrument 21-101 Marketplace Operation).

13. The Filer has no current intention to seek financing by way of a distribution of securities to the public.

14. The Filer applied to voluntarily surrender its status as a reporting issuer in British Columbia under British Columbia Instrument 11-502 Voluntary Surrender of Reporting Issuer Status on September 29, 2008. As a result of such application, the Filer is not a reporting issuer in British Columbia effective October 11, 2008.

15. Upon the grant of the Requested Exemptive Relief, the Filer will not be a reporting issuer or the equivalent in any jurisdiction of Canada.

16. The Filer is not in default of any of its obligations as a reporting issuer under the Legislation except for its obligation to file the following documents:

(a) the annual financial statements and the related management's discussion and analysis for the year ended March 31, 2008, required pursuant to sections 4.1, 4.2 and 5.1 of Regulation 51-102 respecting Continuous Disclosure Obligations (elsewhere, National Instrument 51-102 Continuous Disclosure Obligations) ("Regulation 51-102");

(b) the annual certificates for the year ended March 31, 2008, required pursuant to Part 2 of Regulation 52-109 respecting Certification of Disclosure in Issuers' Annual and Interim Filing (elsewhere, Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings) ("Regulation 52-109");

(c) the interim financial statements and the related management's discussion and analysis for the three-month period ended June 30, 2008, required pursuant to sections 4.3, 4.4 and 5.1 of Regulation 51-102;

(d) the interim certificates for the three-month period ended June 30, 2008, required pursuant to Part 3 of Regulation 51-109.

Decision

Each of the Decision Makers is satisfied that the exemptive relief application meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Requested Exemptive Relief is granted.