LMS Medical Systems Inc. -- s. 144

Headnote

Application by an issuer for a revocation of a cease trade order -- 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, c. S.5 AS AMENDED

(the "Act")

AND

IN THE MATTER OF

LMS MEDICAL SYSTEMS INC.

ORDER

(Section 144)

WHEREAS the securities of LMS Medical Systems Inc. (the "Applicant") are subject to a temporary cease trade order dated July 20, 2009 issued by the Director of the Ontario Securities Commission (the "Commission"), pursuant to paragraph 2 and paragraph 2.1 of subsection 127(1) and subsection 127(5) of the Act, as extended by a further cease trade order dated July 31, 2009 made by the Director, pursuant to paragraph 2 and paragraph 2.1 of subsection 127(1) of the Act (collectively, the "Cease Trade Order"), ordering that the trading in the securities of the Applicant cease until the Cease Trade Order is revoked by the Director;

AND WHEREAS the 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 Cease Trade Order;

AND WHEREAS the Applicant is also subject to a cease trade order dated August 5, 2009 made by the Executive Director pursuant to section 164 of the Securities Act (British Columbia) (the "B.C. Cease Trade Order") ordering that the trading in the securities of the Applicant cease until the B.C. Cease Trade Order is revoked by the Executive Director;

AND WHEREAS the Applicant is also subject to a cease trade order dated November 2, 2009 made by the Executive Director pursuant to section 146 of the Securities Act (Alberta) (the "Alberta Cease Trade Order") ordering that the trading in the securities of the Applicant cease until the Alberta Cease Trade Order is revoked by the Executive Director;

AND WHEREAS the Applicant is also subject to a temporary cease trade order dated July 21, 2009 made by the Director pursuant to section 318 of the Loi sur les valeurs mobilières, as extended by a further cease trade order dated August 5, 2009 made by the Director pursuant to section 318 of the Loi sur les valeurs mobilières (collectively, the "Quebec Cease Trade Order"), ordering that the trading in the securities of the Applicant cease until the Quebec Cease Trade Order is revoked by the Director;

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

AND WHEREAS the Applicant has concurrently applied to the British Columbia Securities Commission for an order for revocation of the B.C. Cease Trade Order, the Alberta Securities Commission for an order for revocation of the Alberta Cease Trade Order and the Autorité des marchés financiers for an order for revocation of the Quebec Cease Trade Order;

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated by Certificate of Incorporation pursuant to the Canada Business Corporations Act on January 14, 2003 as Trophy Capital Inc., as amended by Certificates of Amendment dated February 16, 2004, March 31, 2004 and September 16, 2004.

2. By Certificate of Amendment dated March 31, 2004, the Applicant's name was changed to LMS Medical Systems Inc.

3. The Applicant's registered and head office is located in Ontario at Brookfield Place, 181 Bay Street, Suite 4400, Toronto, Ontario M5J 2T3.

4. The Applicant is a reporting issuer under the securities legislation of the Provinces of British Columbia, Alberta, Ontario and Quebec.

5. The Applicant's authorized share capital consists of an unlimited number of common shares. As at March 31, 2012, the Applicant had 25,582,730 common shares, 1,189,000 warrants, 150,000 options and 1,967,360 DSUs issued and outstanding. Other than the aforementioned common shares, warrants, options and DSUs, the Applicant has no other securities, including debt securities, issued and outstanding.

6. The common shares were suspended from trading on the Toronto Stock Exchange ("TSX") as of June 4, 2009 and delisted effective at the close of the market on July 3, 2009 for failure to meet the continued listing requirements of the TSX.

7. The Cease Trade Order was issued as a result of the Applicant's failure to file with the Commission and mail to its shareholders audited annual financial statements for the year ended March 31, 2009, management's discussion and analysis ("MD&A") relating to the audited annual financial statements for the year ended March 31, 2009, certificates of certifying officers pursuant to National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109") relating to the audited annual financial statements for the year ended March 31, 2009, and the annual information form for the year ended March 31, 2009.

8. The Applicant has concurrently applied to the British Columbia Securities Commission, Alberta Securities Commission and the Autorité des marchés financiers for orders for revocation of the B.C. Cease Trade Order, the Alberta Cease Trade Order and the Quebec Cease Trade Order, respectively.

9. On June 4, 2009, the Applicant and its subsidiary, LMS Medical Systems (Canada) Ltd. ("LMS Ltd."), each filed a Notice of Intention to Make a Proposal under subsection 50.4(1) of the Bankruptcy and Insolvency Act (Canada). Samson Bélair/Deloitte & Touche Inc. was appointed as trustee for both the Applicant and LMS Ltd. and as interim receiver ("Interim Receiver") for LMS Ltd.

10. On July 23, 2009, the Interim Receiver, in its capacity as interim receiver of all of the property of LMS Ltd., entered into an asset purchase agreement with PeriGen (Canada) Ltd. for the sale of substantially all of the assets of LMS Ltd. for a purchase price of US$3,500,000. The sale transaction was approved by the Superior Court of the District of Montreal in the Province of Quebec (the "Court") on July 23, 2009.

11. The Proposal of LMS Ltd. under the Bankruptcy and Insolvency Act (Canada) was approved by the Court on October 1, 2009 and has been fully performed by LMS Ltd.

12. The Proposal of the Applicant under the Bankruptcy and Insolvency Act (Canada) was approved by the Court on December 15, 2009 and has been fully performed by the Applicant.

13. In connection with the Proposals of each of LMS Ltd. and the Applicant under the Bankruptcy and Insolvency Act (Canada), all creditors of each of LMS Ltd. and the Applicant with proven and accepted claims were paid in full.

14. On March 2, 2010, LMS Ltd. filed articles of amendment to change its name to 2980622 Canada Inc. ("2980622").

15. In March 2011, 2980622 completed a transaction with a group of labour and management services companies for the purpose of facilitating a labour restructuring by this group of companies. Following this transaction, 2980622 realized investment income of $960,000 which was used to repay an outstanding loan to the Applicant.

16. The Applicant has not filed its interim financial statements, interim MD&A and interim certificates of certifying officers pursuant to National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109") for the periods from and including the three months ended June 30, 2009 to the nine month period ended December 31, 2009.

17. The Applicant has filed annual financial statements, MD&A and certificates of certifying officers pursuant to NI 52-109 relating to the years ended March 31, 2009, March 31, 2010 and March 31, 2011 and has also filed interim financial statement, management's discussion and analysis and certificates of certifying officers pursuant to NI 51-102 for the interim periods ended June 30, 2010, September 30, 2010, December 31, 2010, June 30, 2011, September 30, 2011 and December 31, 2011.

18. On March 22, 2012, the Applicant refiled the annual financial statements and the notes thereto for the year ended March 31, 2011, together with the signed auditor's report.

19. The Applicant has not filed an annual information form since the annual information form filed for the year ended March 31, 2008. As the Applicant is currently a venture issuer, the Applicant is not required to file this document.

20. The Applicant has paid all outstanding participation fees, filing fees and late fees owing to the Commission, the British Columbia Securities Commission, the Alberta Securities Commission and the Autorité des marchés financiers in Quebec.

21. The Applicant's SEDAR and SEDI profiles are up-to-date.

22. The Applicant has given the Director of its principal regulator, the Commission, a written undertaking that it will (i) not complete any restructuring transaction or significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada nor will it complete 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 without filing and obtaining a receipt, from the Director, for a prospectus including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable) together with the documents required under Part 9 of National Instrument 41-101 General Prospectus Requirements ("NI 41-101") and (ii) hold an annual shareholder meeting within three months after the date of this Order.

23. The Applicant has filed completed personal information and authorization forms for each director and officer of the Applicant in the form of Appendix A of NI 44-101.

24. The Applicant has been inactive for more than two years and had no material assets as at December 31, 2011 other than cash and cash equivalents of $1,674,310.

25. Upon the issuance of this Order, the Applicant will issue a press release announcing the revocation of the Cease Trade Order of the Applicant. The Applicant will concurrently file the press release and material change report via SEDAR.

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

AND UPON 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 revoked.

DATED at Toronto, Ontario on this 23rd day of April, 2012.