Anitech Enterprises Inc. - s. 144

Headnote

Section 144 - Revocation of cease trade order - Issuer subject to cease trade order as a result of its failure to file annual and interim financial statements - Issuer has brought filings up to date and is otherwise not in default of Ontario securities law.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127(1), 127(5), 144.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

(the ACT)

AND

IN THE MATTER OF

ANITECH ENTERPRISES INC.

ORDER

(Section 144)

WHEREAS the securities of Anitech Enterprises Inc. (the Applicant) are subject to a cease trade order made by the Director dated June 7, 2004 pursuant to subsection 127(1) of the Securities Act (Ontario) (the Act), which order was made in connection with a temporary cease trade order made by the Director dated May 26, 2004 pursuant to subsections 127(1) and 127(5) of the Act (collectively, the Cease Trade Order) directing that trading in the securities of the Applicant cease unless revoked by a further order of revocation;

AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the Commission) pursuant to section 144 of the Act for the revocation of the Cease Trade Order;

AND WHEREAS on February 13, 2006, the Commission varied the Cease Trade Order to permit the amalgamation (the Amalgamation) of Anitech and AMtag ID Inc. (AMtag) and related transactions;

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated on April 4, 1986 under the laws of Alberta, was subsequently continued under the laws of British Columbia, and finally continued under the Business Corporations Act (Ontario) on July 6, 1993. The Applicant does not maintain a head office since it has no active operations. The Applicant's mailing address is currently Suite 6, PO Box 105, 14845 Yonge Street, Aurora, Ontario, L4G 6P6. The Applicant's records are currently located at the offices of Fasken Martineau DuMoulin LLP, at 66 Wellington Street West, Suite 4200, Toronto Dominion Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1N6. Upon the completion of the Amalgamation the Applicant will have its registered and principal business office at 4480 Harvester Road, Burlington, Ontario, L7L 4X2.

2 The authorized share capital of the Applicant consists of an unlimited number of common shares, of which 19,160,496 common shares are issued and outstanding as of January 25, 2006. Other than its common shares, the Applicant has no securities, including debt securities, outstanding.

3. The Applicant is a reporting issuer under the securities legislation of the provinces of Ontario, British Columbia and Alberta. The Applicant is not a reporting issuer in any other jurisdiction in Canada.

4. The common shares of the Applicant are listed on the NEX board of the TSX Venture Exchange but have been suspended from trading, and are not listed or quoted on any other exchange or market in Canada or elsewhere.

5. The Cease Trade Order was issued due to the failure by the Applicant to file with the Commission audited financial statements for the year ended December 31, 2003 and interim financial statements for the three months ended March 31, 2004 (the Financial Statements) as required by the Act.

6. The Applicant is also subject to cease trade orders issued by the British Columbia Securities Commission dated June 2, 2004 and the Alberta Securities Commission dated June 30, 2004 for failure to file the Financial Statements. The Applicant has concurrently applied for a revocation of these cease trade orders.

7. The Financial Statements were not filed with the Commission due to a lack of funds to pay for the preparation and audit of such statements.

8. The audited financial statements for the years ended December 31, 2003 and 2004, and unaudited financial statements for the nine months ended September 30, 2005, were filed with the Commission, via SEDAR on December 21, 2005.

9. The Applicant is up to date in its continuous disclosure obligations, has paid all outstanding filing fees associated therewith, and is no longer in default of the requirements of the Act or any of the rules or regulations made thereunder.

10. The Applicant has agreed to amalgamate with AMtag (the Amalgamation), subject to shareholder approval, to form an amalgamated corporation which will be called "iPico Inc." or such other name as the board of directors of the Corporation, in its sole discretion but subject to applicable regulatory approval, deems appropriate. On the Amalgamation, each of the current shareholders of the Applicant will receive one common share of the amalgamated corporation (Amalco) for every 191.6049 common shares of the Applicant held on the date of the Amalgamation; provided, however, that Shareholders who hold fewer than 19,161 common shares of the Applicant, or who would otherwise be entitled to receive a fractional share of Amalco, will instead receive a cash payment equal to one dollar ($1.00) multiplied by the number of shares (including fractional shares) of Amalco that would otherwise have been issuable to such shareholder. The shareholders of AMtag will receive one common share of Amalco for each common share of AMtag and one 5% cumulative redeemable convertible Class A Share of Amalco for each 5% cumulative redeemable convertible Class A Share of AMtag, as the case may be, held on the date of the Amalgamation. In addition, each obligation of AMtag to issue shares (whether an option, warrant, convertible debt instrument, exchangeable shares of a subsidiary or other contractual obligation) will become an obligation to issue an equal number of common shares or Class A Shares of Amalco, as the case may be. As a result of the Amalgamation, the shareholders of AMtag will own a minimum of approximately 99.73% of the issued and outstanding shares of Amalco, while the current shareholders of the Applicant will hold a maximum of approximately 0.27% of the issued and outstanding shares of Amalco. It is expected that immediately after the Amalgamation Amalco will have 24,650,320 common shares and 5,000,000 Class A Shares issued and outs

11. In connection with, and as a condition of, the Amalgamation, AMtag has entered into agreements with iPico Holdings (Pty) Limited (iPico), its subsidiaries, and certain licencees of iPico (collectively, the iPico Group), to purchase certain assets of the iPico Group, principally intellectual property and material contracts (the Asset Acquisition), for consideration consisting of $5,520,000, 2,873,910 shares (the Exchangeable Shares) of iPico South Africa (Pty) Ltd. (iPico South Africa), a wholly-owned subsidiary of AMtag, which will be exchangeable for 2,873,910 common shares of AMtag, and a $4,475,770 debenture (the Debenture) convertible into 4,475,770 common shares of AMtag. Upon the completion of the Amalgamation, the Exchangeable Shares will be exchangeable for an equal number of common shares of Amalco, and the Debenture will be convertible into an equal number of common shares of Amalco.

12. In connection with, and as a condition of, the Asset Acquisition, AMtag must complete (i) a private placement of 5,000,000 preferred subscription receipts (each exercisable for one Class A Preferred share and Class A Preferred share purchase warrant of AMtag, each such warrant being exercisable to acquire one common share of AMtag at a price of $1.00 per share for a period of 36 months from closing) to Brookfield Technology Fund (Brookfield) for gross proceeds of $5,000,000 (the Preferred Offering), and (ii) a private placement of 10,000,000 common subscription receipts (each exercisable for one common share and half of a common share purchase warrant of AMtag, each such warrant being exercisable for one common share of AMtag at a price of $1.00 per share for a period of 18 months from closing) for gross proceeds of $10,000,000 (the Common Offering and together with the Preferred Offering, the Private Placement). The proceeds of the Private Placement will be used to finance the Asset Acquisition, to pay the costs of the Asset Acquisition, the Private Placement and the Amalgamation, and to provide working capital for Amalco.

13. On March 9, 2006, AMtag closed into escrow the Asset Acquisition. All conditions precedent to the completion of the Asset Acquisition have been satisfied except for the payment of the cash portion of the purchase price.

14. On March 10, 2006, AMtag closed into escrow the Preferred Offering. The gross proceeds of the Preferred Offering are being held in escrow by CIBC Mellon Trust Company (CIBC Mellon) pending the satisfaction of certain conditions as set out in the escrow agreement dated March 10, 2006 between AMtag, CIBC Mellon, and Brookfield. All of the conditions for the release of the escrowed funds have been completed except for the revocation of the Cease Trade Order, the delivery of certificates confirming the Applicant's status as a reporting issuer not in default in the Provinces of British Columbia, Alberta and Ontario, the delivery of a legal opinion as to the Applicant's status and the resale restrictions applicable to the shares of Amalco to be issued upon the Amalgamation to the investors under the Preferred Offering, and the submission of a formal release notice.

15. On March 17 2006, AMtag closed into escrow the Common Offering. The net proceeds of the Common Offering are being held in escrow by CIBC Mellon pending the satisfaction of certain conditions as set out in the subscription receipt agreement between AMtag, CIBC Mellon and the lead agent for the Common Offering. All of the conditions for the release of the escrowed funds have been completed except for the revocation of the Cease Trade Order, the delivery of certificates confirming the Applicant's status as a reporting issuer not in default in the Provinces of British Columbia, Alberta and Ontario, and the delivery of a legal opinion as to the Applicant's status and the resale restrictions applicable to the shares of Amalco to be issued upon the Amalgamation to the investors under the Common Offering, and the submission of a formal release notice.

16. The terms of the Amalgamation, Asset Acquisition the Common Offering and the Preferred Offering were described in the Management Information Circular of Anitech dated February 10, 2006 (the Circular), for the annual and special meeting of Anitech's shareholders which was duly held on March 9, 2006 (the Meeting). The Circular, together with the audited financial statements of the Applicant for the years ended December 31, 2003 and 2004, and unaudited financial statements for the nine months ended September 30, 2005, was duly mailed to Anitech's shareholders of record as of the record date of January 25, 2006 in accordance with National Instrument 54-101 Proxy Solicitation.

17. At the Meeting, the shareholders approved all matters proposed to be placed before them pursuant to the Circular. In particular, the Amalgamation was approved by (i) two-thirds of the votes cast by shareholders present at the Meeting in person or by proxy, and (ii) a majority of the votes cast by disinterested shareholders present at the Meeting in person or by proxy.

18. The Circular contained: (i) a description of the Cease Trade Order, (ii) a description of the Variance Orders, and (iii) a notice that while the Variance Orders allow for the completion of the Amalgamation, at the close of the Amalgamation all the shares of the company resulting from the Amalgamation (Amalco) will remain cease traded, and there is no guarantee a full revocation will be granted. In addition, prior to the Meeting all shareholders of record of Anitech as of the record date for the meeting received (i) a copy of each Cease Trade Order, (ii) a copy of each Variance Order, and (iii) written notice from Anitech and AMtag that all securities of Amalco, including all securities issued pursuant to the Amalgamation, will remain subject to the Cease Trade Order following the completion of the Amalgamation. Recipients of this notice were required to acknowledge in writing receipt of the notice and accompanying documents. The Corporation has received such acknowledgements from 25 shareholders, but does not expect to receive such acknowledgements from all recipients of the notice as the Corporation has been inactive for some time, some shareholders may have moved without notifying the transfer agent, or may simply fail to send back a written acknowledgement.

19. Prior to the completion of the Asset Acquisition, each of the vendors under the Asset Acquisition received (i) a copy of each Cease Trade Order, (ii) a copy of each Variance Order, and (iii) written notice from Anitech and AMtag that all securities of Amalco, including all securities issued pursuant to the Asset Acquisition, will remain subject to the Cease Trade Orders following the completion of the Amalgamation. The vendors provided written acknowledgement that they received such notice and accompanying documents.

20. Prior to the completion of the Common Offering and the Preferred Offering, each subscriber under the Private Placement received, as part of the subscription agreement delivered to such subscriber for the Private Placement, (i) a copy of each Cease Trade Order, (ii) a copy of each Variance Order, and (iii) written notice from Anitech and AMtag that all securities of Amalco, including all securities issued pursuant to the Private Placement, will remain subject to the Cease Trade Orders following the completion of the Amalgamation. By executing their respective subscription agreements, each of the subscribers under the Private Placement acknowledged receipt of the foregoing notice and accompanying documents.

21. On February 8, 2006, the TSX Venture Exchange (the Exchange) granted conditional approval for the Amalgamation and the listing of the common shares of Amalco, subject to certain conditions.

22. All conditions precedent to the Amalgamation, except the filing of Articles of Amalgamation and the completion of the Asset Acquisition, have been satisfied. All conditions precedent to the Asset Acquisition, except the release of the proceeds of the Common Offering and the Preferred Offering from escrow, have been satisfied. All conditions precedent to the release of the proceeds of the Common Offering and the Preferred Offering from escrow, except the final and full revocation of the Cease Trade Orders, have been satisfied.

23. After the completion of the Private Placement, the Asset Acquisition and the Amalgamation, Amalco will have sufficient funds to cover its operating costs for twelve months.

AND WHEREAS considering the Application and the recommendation of staff to the Director;

AND WHEREAS the Director is satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant section 144 of the Act, that the Cease Trade Order is hereby revoked.

DATED March 29^th, 2006.