Securities Law & Instruments

Headnote

Subsection 83.1(1) - issuer deemed to be a reporting issuer in Ontario - issuer has been a reporting issuer in Alberta since October 17, 2002 and in British Columbia since March 27, 2003 - issuer's securities are listed and posted for trading on the TSX Venture Exchange - continuous disclosure requirements of Alberta and British Columbia substantively the same as those of Ontario.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as amended, s. 83.1(1).

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

ESS CAPITAL INC.

 

ORDER

(Subsection 83.1(1))

UPON the application (the "Application") of ESS Capital Inc. (the "Corporation") to the Ontario Securities Commission (the "Commission") for an order pursuant to subsection 83.1(1) of the Act deeming the Corporation to be a reporting issuer for the purposes of Ontario securities law;

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

AND UPON the Corporation having represented to the Commission as follows:

1. The Corporation was incorporated by a Certificate of Incorporation issued pursuant to the provisions of the Business Corporations Act (Alberta) on April 16, 2002. The Articles of the Corporation were amended on June 12, 2002 to remove the private issuer provisions and the restrictions on share transfer.

2. The head office of the Corporation is located at 127 Temple Crescent West, Lethbridge, Alberta, T1K 4T3, and the registered office of the Corporation is located at 3100, 324 - 8th Avenue S.W., Calgary, Alberta, T2P 2Z2.

3. The authorized capital of Corporation consists of an unlimited number of common shares and an unlimited number of preferred shares issuable in series, of which 4,700,001 common shares and no preferred shares are issued and outstanding as of the date hereof. An aggregate of 275,000 common shares are reserved for issuance on the exercise of an agent's option granted by the Corporation in conjunction with its initial public offering. Another 376,000 common shares are reserved for issuance on the exercise of stock options granted by the Corporation to certain of its officers and directors.

4. The Corporation is a "reporting issuer" under the Securities Act (Alberta) and the Securities Act (British Columbia). The Corporation is not a reporting issuer or its equivalent under the securities laws of any other jurisdiction.

5. The Corporation has not been the subject of any enforcement actions by the Alberta or British Columbia Securities Commissions or the Exchange, and the Corporation is not in default of any requirement of the Act, the Securities Act (Alberta) or the Securities Act (British Columbia).

6. The materials filed by the Corporation as a reporting issuer in the Provinces of Alberta and British Columbia are available on the System for Electronic Document Analysis and Retrieval.

7. The Corporation's common shares are listed on the TSX Venture Exchange (the "Exchange") and currently trade under the symbol "XAQ.P". The Corporation is in good standing under the rules, regulations and policies of the Exchange.

8. The Corporation is a "Capital Pool Company" for the purposes of the policies of the Exchange and has entered into a share purchase agreement made September 10, 2003 pursuant to which it will acquire the issued and outstanding shares of MPC Circuits Ltd., an Ontario-based printed circuit board manufacturing company (the "Acquisition"). The Acquisition is intended to be the Qualifying Transaction of the Corporation for the purposes of the policies of the Exchange. By letter dated October 30, 2003, the Exchange has conditionally approved the additional listing of the 2,260,000 common shares of the Corporation to be issued pursuant to the Acquisition as the Qualifying Transaction of the Corporation. The Acquisition is expected to close on December 8, 2003, the date of the meeting of the shareholders of the Corporation in respect of the Acquisition, among other things.

9. The Corporation has a "significant connection to Ontario" in that Ontario residents beneficially own at least 20% of the outstanding common shares of the Corporation based on the list of registered shareholders of the Corporation as of November 7, 2003, the record date for the upcoming meeting of the shareholders of the Corporation, and information available to the directors and officers of the Corporation regarding the beneficial shareholders of the Corporation. After the Acquisition, that percentage will increase as all of the 2,260,000 common shares issuable under the Acquisition will be issued to Ontario residents.

10. The continuous disclosure requirements of the Securities Act (Alberta) and the Securities Act (British Columbia) are substantially the same as the requirements under the Act.

11. There have been no penalties or sanctions imposed against the Corporation by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority, and the Corporation has not entered into any settlement agreement with any Canadian securities regulatory authority.

12. Neither the Corporation nor, to the knowledge of the Corporation, any of its officers, directors or controlling shareholders is or has been subject to:

(a) any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority or entered into a settlement agreement with a Canadian securities regulatory authority; or

(b) any other penalties or sanctions imposed by a court or regulatory body that would likely to be considered important to a reasonable investor making an investment decision.

13. Neither the Corporation nor, to the knowledge of the Corporation, any of its directors, officers or controlling shareholders, is or has been subject to:

(a) any known ongoing or concluded investigations by:

(i) a Canadian securities regulatory authority, or

(ii) a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or

(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

14. To the knowledge of the Corporation, none of the Corporation's directors, officers or controlling shareholders is or has been subject to:

(a) any cease trade or similar orders, or orders that denied access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, within the preceding 10 years; or

(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years,

relating to any other issuer which the director, officer or controlling shareholder of the Corporation was a director or officer at the time of such event.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED pursuant to subsection 83.1(1) of the Act that the Corporation be deemed to be a reporting issuer for the purposes of Ontario securities law.

December 3, 2003.

"Erez Blumberger"