Caribbean Diversified Investments, Inc.

Order

Headnote

Section 144 of the Securities Act (Ontario) -- application for partial revocation of a cease trade order -- issuer cease traded due to failure to file audited annual statements with the Commission -- issuer has applied for partial revocation of the cease trade order to permit the issuer to proceed with a private placement with an accredited investor (as such term is defined in National Instrument 45-106 Prospectus and Registration Requirements) resident in Ontario -- issuer will use proceeds from private placement to prepare and file continuous disclosure documents, pay related fees and fund operations -- partial revocation granted subject to conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5 AS AMENDED (the "Act")

AND

IN THE MATTER OF CARIBBEAN DIVERSIFIED INVESTMENTS, INC.

ORDER (Section 144)

WHEREAS the securities of Caribbean Diversified Investments, Inc. (the "Applicant") are subject to a temporary cease trade order made by the Director dated January 13, 2014 under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act and a further cease trade order issued by the Director dated January 27, 2014 pursuant to subsection 127(1) of the Act (together, the "Cease Trade Order") directing that all trading in securities of the Applicant, whether direct or indirect, cease until the Cease Trade Order is revoked;

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 incorporated pursuant to the Business Corporations Act (British Columbia) ("BCA") on November 9, 2011 under the name 0924885 B.C. Ltd. as a wholly-owned subsidiary of Haltain Developments Corp. ("Haltain") for the purposes of a reorganization of Haltain pursuant to a plan of arrangement ("Plan of Arrangement") under the BCA. The Plan of Arrangement was approved at a special meeting of shareholders of Haltain held on December 9, 2011. The Applicant obtained final approval for the Plan of Arrangement from the Supreme Court of British Columbia on January 10, 2012. On completion of the Plan of Arrangement, the Applicant became a reporting issuer in British Columbia and Alberta. The Applicant subsequently entered into an acquisition and an amalgamation agreement on July 9, 2013 to complete a three cornered amalgamation among the Applicant, Caribbean Diversified Holdings Inc. ("CDHI") and 2379939 Ontario Inc. ("Newco"), a wholly-owned subsidiary of the Applicant. The amalgamated company completed a name change to Caribbean Diversified Investments, Inc. on July 25, 2013. The Applicant was listed for trading on the Canadian Securities Exchange ("CSE") on August 30, 2013 and became a reporting issuer in Ontario at that time.

2. The Applicant's registered and head office is located at 175 Commerce Valley Drive West, Suite 310, Thornhill, Ontario L3T 7P6.

3. The Applicant, through a wholly-owned subsidiary, operates St. Helen University in St. Lucia.

4. The Applicant is a reporting issuer only in Ontario, Alberta and British Columbia.

5. As of the date hereof, the authorized capital of the Applicant consists of an unlimited number of common shares (the "Common Shares") of which 66,852,174 are issued and outstanding. There are no outstanding warrants, broker warrants, compensation options or stock options. The Applicant has no other classes of securities (including debt securities) outstanding.

6. The Applicant does not have any securities listed or quoted on any exchange in Canada or elsewhere, other than the Common Shares which are listed for trading on the CSE under the symbol "HDC". The CSE suspended trading of the Common Shares on January 28, 2014 as a result of the failure of the Applicant to file its audited financial statements and the issuance of the Cease Trade Order.

7. The Cease Trade Order was issued by the Commission as a result of the Applicant's failure to file its audited annual financial statements, management's discussion and analysis, and certification of annual filings for the fiscal year ended August 31, 2013 within the time prescribed by securities legislation (collectively, the "2013 Annual Filings").

8. The failure to file the 2013 Annual Filings arose as a consequence of financial hardship following which the Applicant was unable to pay the fees of various service providers, including its auditors.

9. The Applicant is also subject to a cease trade order issued by the British Columbia Securities Commission ("BCSC") dated January 8, 2014. To date, no order has been issued by the Alberta Securities Commission (the "ASC").

10. The Applicant is seeking to effect a private placement of units (the "Financing") to raise $300,000 to enable the Applicant to bring itself into compliance with its continuous disclosure obligations and to fund expenses as more particularly outlined below. The Financing will be conducted on a prospectus exempt basis with one subscriber who is an accredited investor (as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions) resident in Canada (the "Investor"). The Financing will entail a private placement of units (the "Securities") for aggregate proceeds of $300,000. Each unit will consists of one (1) Common Share and one (1) common share purchase warrant (each a "Warrant"). Each Warrant entitles the holder to purchase one (1) Common Share at an exercise price of $0.19 per Warrant until two years from Closing.

11. The Investor is a resident of Ontario.

12. The Investor is not a related party of the Applicant and will not become an insider of the Applicant on the completion of the Financing.

13. The following is a breakdown of the use of proceeds of the Financing based upon raising $300,000 as follows:

Explanation

$300,000

 

Fees and penalties for late filing of financial disclosures and costs associated with finalizing the Financial Disclosures and the lifting of the Cease Trade Order

$70,000

 

Commission for private placement

$15,000

 

Working Capital for wholly-owned subsidiary St. Helen University Inc.

$150,000

 

Corporate expenses of the Applicant

$65,000

14. The Applicant reasonably believes that the proceeds of the Financing will be sufficient to bring its continuous disclosure obligations up to date and pay all related outstanding fees and provide it with sufficient funds to continue its business.

15. As the Financing would involve a trade of securities and acts in furtherance of trades, the Financing could not be completed without a partial revocation of the Cease Trade Order.

16. The Financing will be completed in accordance with all applicable laws.

17. Prior to the completion of the Financing, the Investor will:

(a) receive:

i. a copy of the Cease Trade Order; and

ii. a copy of the partial revocation order for which this application has been made; and

(b) provide signed and dated acknowledgements which clearly state that all of the Applicant's securities, including the securities issued in connection with the Financing, will remain subject to the Cease Trader Order as well as the cease trade order issued by the BCSC and any order issued by ASC, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

18. 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 above.

19. Upon issuance of this order (the "Order"), the Applicant will issue a press release announcing the Order and the intention to complete the Financing. Upon completion of the Financing, the Applicant will issue a press release and file a material change report. As other material events transpire, the Applicant will issue appropriate press releases and file material change reports as applicable.

20. The Applicant intends to file the 2013 Annual Filings on SEDAR within a reasonable time following the closing of the Financing to bring its continuous disclosure record up to date.

21. Following the filing of the 2013 Annual Filings, the Applicant intends to apply to the Commission and to the BCSC for a full revocation of, respectively, the Cease Trade Order and the cease trade orders detailed above. If, in the interim, the ASC issues a cease trade order, the Applicant will also apply for a full revocation of such order.

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 be and is hereby partially revoked solely to permit trades and acts in furtherance of trades in securities of the Applicant that are necessary for and in connection with the Financing, provided that:

(a) prior to the completion of the Financing, the Investor will:

i. receive a copy of the Cease Trade Order;

ii. receive a copy of this partial revocation order; and

iii. provide a signed and dated acknowledgement, which clearly states that all of the Applicant's securities, including the securities issued in connection with the Financing, will remain subject to the Cease Trader Order, the cease trade order issued by the BCSC and any order issued by the ASC, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

(b) The Applicant undertakes to make available a copy of the written acknowledgement referred to in paragraph (a)iii. to staff of the Commission on request; and

(c) this Order will terminate on the earlier of the closing of the Financing and 120 days from the date hereof.

DATED at Toronto, Ontario on this 26th day of February, 2014.

"Shannon O'Hearn"
Manager, Corporate Finance