Section 144 -- application for variation of cease trade order -- issuer cease traded due to failure to file with the Commission annual financial statements -- issuer has applied for a variation of the cease trade order to permit the issuer to proceed with a private placement and share consolidation -- potential investors to be accredited investors and to receive copy of cease trade order and partial revocation order prior to making investment decision -- partial revocation granted subject to conditions.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.
National Instrument 45-106 Prospectus and Registration Exemptions.
National Policy 12-202 Revocation of a Compliance-related Cease Trade Order.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990 C. S.5, AS AMENDED
IN THE MATTER OF
IGNITION POINT TECHNOLOGIES CORP.
WHEREAS the securities of Ignition Point Technologies Corp. (the "Applicant") are subject to a temporary cease trade order made by the Director dated February 4, 2009 under subsections 127(1) and 127(5) of the Act and a further cease trade order made by the Director dated February 17, 2009 under subsection 127(1) of the Act directing that trading in the securities of the Applicant cease unless revoked by a further order of revocation (the "Cease Trade Order");
AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the "Commission") pursuant to section 144 of the Act (the "Application") for a partial revocation of the Cease Trade Order;
AND WHEREAS the Applicant has represented to the Commission that:
1. The Applicant was originally formed on August 1, 1996 through an amalgamation pursuant to the Company Act (British Columbia) of several predecessor corporations. The Applicant was continued under the Canada Business Corporations Act on April 24, 2001.
2. The Applicant is a reporting issuer under the securities legislation of the provinces of British Columbia, Alberta and Ontario.
3. The authorized share capital of the Applicant consists of an unlimited number of common shares with no par value ("Common Shares"), of which 7,456,666 Common Shares are issued and outstanding.
4. The Cease Trade Order was issued as a result of the Applicant's failure to file its annual financial statements and related management's discussion and analysis and officer's certificates for the year ended September 30, 2008. Subsequently, the Applicant failed to file its interim financial statements and related management's discussion and analysis and officer's certificates for the three months ended December 31, 2008 and six months ended March 31, 2009. The Applicant's failure to file these documents was due to financial distress.
5. Prior to the Cease Trade Order, the Applicant was a broadband communications company. The Applicant's partially owned operating subsidiary was TeraSpan Networks Inc. ("TeraSpan").
6. On January 30, 2009, the Applicant received notice of the commencement of foreclosure action by the holders of its secured convertible debentures. The Applicant had been in default of its interest payment obligations under this debt since May 2008. The foreclosure action resulted in the seizure by the secured creditors of the Applicant's shareholdings in TeraSpan and the extinguishment of the debt owed to those creditors. All of the directors and officers of the Applicant resigned immediately prior to January 30, 2009.
7. On February 3, 2009, the TSX Venture Exchange ("TSXV") suspended trading of the shares of the Applicant for failure to meet certain Tier Maintenance Requirements. On July 6, 2009, the Common Shares were accepted for listing on the NEX board of the TSXV. In order to qualify for the NEX board, the Applicant must, among other conditions, be a reporting issuer in good standing with all relevant securities regulatory authorities and under corporate law. Due to the Cease Trade Order, the Common Shares will remain suspended on the NEX board.
8. An extraordinary general meeting of the shareholders of the Applicant was held on June 23, 2009. The Applicant's shareholders were asked to approve, among other items, (i) the election of N. Ross Wilmot, Kurt Lahey and Kenneth Taylor as directors, (ii) a stock consolidation on a basis of one new Common Share for every three old Common Shares (the "Stock Consolidation"), and (iii) a change of name from "Ignition Point Technologies Corp." to "Tilting Capital Corp." These resolutions were passed by the shareholders of the Applicant.
9. The Applicant acknowledges that, by sending to shareholders an information circular describing the proposed Stock Consolidation and holding a shareholder meeting to approve the Stock Consolidation, the Applicant was in contravention of the Cease Trade Order.
10. To bring its continuous disclosure record up to date, the Applicant intends, within a reasonable time following the Private Placement (as defined in paragraph 16 below), to file on SEDAR its audited financial statements for the financial year ended September 30, 2008 and its interim financial statements for the three months ended December 31, 2008 and for the six months ended March 31, 2009 (collectively, the "Financial Statements") together with all required management's discussion and analysis and officer's certificates and all other continuous disclosure documents required by applicable securities legislation to be filed by the Applicant.
11. The Applicant is awaiting the completion of the audited annual financial statements and interim financial statements and they will be filed on SEDAR when completed. There are currently insufficient funds to complete the audit of the annual financial statements and to pay the participation and filing fees necessary for the Applicant to be current. If the Applicant cannot proceed with the Private Placement, it is likely that the Applicant will not be able to continue its operations.
12. In addition to the Cease Trade Order, the Applicant is also subject to:
(a) a cease trade order issued by the British Columbia Securities Commission on February 2, 2009; and
(b) a cease trade order issued by the Alberta Securities Commission on May 12, 2009.
13. The Applicant has concurrently applied for a partial revocation of both of these cease trade orders.
14. The Common Shares are not listed or quoted on any other exchange or market in Canada or elsewhere.
15. In conjunction with the forgoing, the Applicant wishes to proceed with the proposed Stock Consolidation and to change the name of the company to "Tilting Capital Corp.", subject to regulatory approval. Following the Stock Consolidation, the Applicant will have approximately 2,485,555 Common Shares issued and outstanding.
16. The Applicant is proposing to complete a private placement of equity securities to raise gross proceeds of $75,000 (the "Private Placement") by issuing 2,500,000 post-consolidated Common Shares at a price per share of $0.03 per Common Share, subject to regulatory approvals. The proposed number of Common Shares outstanding following the Private Placement will be approximately 4,985,555.
17. The Applicant will issue the Common Shares in respect of the Private Placement pursuant to the accredited investor exemption in section of 2.3 of National Instrument 45-106 -- Prospectus and Registration Exemptions.
18. Prior to completion of the Private Placement, each potential investor will receive:
(a) a copy of the Cease Trade Order;
(b) a copy of this Order; and
(c) written notice from the Applicant, and will provide a written acknowledgement to the Applicant, that all of the Applicant's securities, including securities issued in connection with the Private Placement will remain subject to the Cease Trade Order until it is revoked, and that the granting of this Order does not guarantee the issuance of a full revocation order in the future.
19. The Applicant intends to use the proceeds from the Private Placement to complete the filing of the documents referred to in paragraph 10 above and to fund the cost of the Stock Consolidation.
20. The Applicant cannot complete the Stock Consolidation or the Private Placement because of the Cease Trade Order.
21. The Private Placement is to be completed in compliance with all applicable policies of the NEX board of the TSX Venture Exchange and applicable securities legislation.
22. Upon the issuance of this Order, the Applicant will issue a press release and file a material change report announcing the Private Placement and this Order.
23. The Applicant is not in default of any requirements of the Cease Trade Order or the Act or the rules and regulations made pursuant thereto, subject to the deficiencies outlined in paragraph 4 and 9 above.
24. The Applicant intends, within a reasonable time following completion of the Private Placement, to apply to the Commission and to the other securities regulatory authorities where cease trade orders are in effect for a full revocation of the Cease Trade Order and those other orders.
25. The Applicant is not considering, nor is it involved in any discussion relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.
AND WHEREAS considering the Application and the recommendation of the staff of the Commission;
AND WHEREAS the Director being satisfied that to do so would not be prejudicial to the public interest;
IT IS ORDERED, pursuant to section 144 of the Act, that the Cease Trade Order is partially revoked solely to permit:
(a) the Stock Consolidation; and
(b) the issuance of the Common Shares pursuant to the Private Placement and all acts in furtherance of the completion of the issuance of such Common Shares;
(i) prior to completion of the Private Placement, each potential investor:
a. receives a copy of the Cease Trade Order,
b. receives a copy of this Order, and
c. receives written notice from the Applicant, and provides a written acknowledgement to the Applicant, that all of the Applicant's securities, including securities issued in connection with the Private Placement will remain subject to the Cease Trade Order until it is revoked, and that the granting of this Order does not guarantee the issuance of a full revocation order in the future;
(ii) the Applicant undertakes to make available copies of the written acknowledgements to staff of the Commission on request; and
(iii) this Order will terminate on the earlier of the completion of the Private Placement and 180 days from the date hereof.
DATED August 13, 2009.