Securities Law & Instruments



National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Application by a reporting issuer for an order that it is not a reporting issuer – To the knowledge of the reporting issuer, and based on diligent enquiry, residents of Canada (i) do not directly or indirectly beneficially own more than 2% of each class or series of outstanding securities of the reporting issuer worldwide, and (ii) do not directly or indirectly comprise more than 2.4% of the total number of shareholders of the Filer worldwide – Issuer is subject to U.S. securities law and requirements of the New York Stock Exchange – Issuer has undertaken that it will concurrently deliver to its Canadian securityholders all disclosure material it is required under U.S. securities laws and exchange requirements to deliver to U.S. resident securityholders – Issuer has provided notice through a press release that it has submitted an application to cease to be a reporting issuer in Ontario.


Applicable Legislative Provisions


Securities Act (Ontario), R.S.O. 1990, c. S.5, s. 1(10)(a)(ii).


August 18, 2016





(the “Jurisdictions”)












(the “Filer”)






The securities regulatory authority or regulator in each of the Jurisdictions (the “Decision Maker”) has received an application (the “Application”) from the Filer for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the Filer is not a reporting issuer (the “Exemptive Relief Sought”).


Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):


(a)           the Ontario Securities Commission is the principal regulator for this application; and

(b)           this decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.




Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.




This decision is based on the following facts represented by the Filer:


1.             The Filer is a corporation that was incorporated under the laws of the State of California in 1986 and became a Washington corporation in 1993. The Filer’s registered and head office is 17750 S.E. 6th Way, Vancouver, Washington 98683.


2.             The Filer is an American based manufacturing company in the business of manufacturing exercise equipment. The Filer’s management is located in Vancouver, Washington.


3.             The Filer does not have any operations, employees or offices in Canada.


4.             The Filer is a reporting issuer in each of the Jurisdictions and is not in default of securities legislation in any jurisdiction of Canada other than as described in paragraph 17. The Filer is not a reporting issuer in any other jurisdiction of Canada.


5.             The Filer’s authorized share capital is 75 million shares of common stock with no par value (the “Shares”). As of November, 2015 there were 30,929,347 Shares issued and outstanding worldwide. The Filer has no other securities, including debt securities, issued or outstanding other than the Shares.


6.             The Shares have been listed on listed on the New York Stock Exchange (“NYSE”) since May 21, 2002 under the trading symbol NLS. The Filer is not in default of any of the requirements of the NYSE.


7.             The Shares were previously listed on January 28, 1993 on the Toronto Stock Exchange (the “TSX”) in substitution for the listed shares of Stratford Software Corporation as a result of the merger between Stratford Software Corporation and the Filer (then known as Bow-Flex of America, Inc.) which was completed on or about January 25, 1993. The Shares were de-listed from the TSX at the Filer’s request as of the close of trading on May 4, 1999.


8.             In support of the representations set forth in para-graphs 9 and 10 below concerning the percentage of outstanding securities and the total number of security holders in Canada, the Filer determined the number of Canadian securityholders directly or indirectly beneficially owning the Shares through a review of the shareholder register kept by its registrar and transfer agent and with respect to beneficial securityholders in accordance with the process set out in National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer. The Filer also retained Laurel Hill Advisory Group (“Laurel Hill”), a leading, independent, cross-border shareholder communications firm with offices in Vancouver, Toronto, New York and Boston. The Filer directed Laurel Hill to undertake a thorough and diligent examination of its share register, various reports and public filings for the purposes of determining the number, holdings, identity and geographic location of the holders of its Shares.


9.             Based on the Filer’s diligent inquires described above and information provided by Laurel Hill, as of November, 2015, the Filer had 30,929,347 Shares outstanding, of which the number of Shares held by residents of Canada, whether through the American share register or in Canada, beneficially and of record, is 520,207 shares representing 1.68% of the total outstanding shares. Further, residents of Canada represent 181 of the Filer’s 7549 worldwide securityholders and therefore residents of Canada comprise 2.40% of the Filer’s worldwide securityholders.


10.          Accordingly, based on the foregoing, as of November, 2015, residents of Canada:


·                     do not, directly or indirectly, beneficially own more than 2% of each class or series of outstanding securities of the issuer worldwide; and


·                     do not, directly or indirectly, comprise more than 2.40% of the total number of securityholders of the Filer worldwide.


11.          The Filer is unable to rely on the simplified procedure set out in CSA Notice 12-307 Applications for a Decision that an Issuer is not a Reporting Issuer in order to apply for the relief sought because the Filer’s securities are traded on the NYSE, the Filer is a reporting issuer in British Columbia and it has more than 50 security holders in total worldwide. The Filer could not voluntarily surrender its status as a reporting issuer in British Columbia under BC Instrument 11-502 Voluntary Surrender of Reporting Issuer Status because the Filer has more than 50 securityholders and the Shares are traded through or quoted on an exchange or quotation system.


12.          The Filer has no current intention to seek public financing by way of an offering of securities in any jurisdiction in Canada.

13.          In the 12 months before applying for the decision, the Filer has not taken any steps that indicate there is a market for its securities in Canada. In particular, since 1999, the Filer has not maintained a listing on a Canadian marketplace or exchange or distributed any securities in Canada.


14.          None of the Filer’s securities are listed, traded or quoted on a marketplace in Canada as defined in National Instrument 21-101 Marketplace Opera-tion and the Filer does not intend to have its securities listed, traded or quoted on such marketplace in Canada.


15.          The Filer is subject to all applicable corporate requirements of a corporation formed under the laws of the United States and the applicable rules of the NYSE, which is a major foreign exchange. The Filer is not in default of any of the requirements of the laws of the United States applicable to it.


16.          The Filer files continuous disclosure reports under U.S. securities laws and is listed on the NYSE. Such continuous disclosure reports are available to securityholders on the Filer’s website at and on Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) at


17.          The Filer qualifies as a “designated foreign issuer” under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (“NI 71-102”) and has relied on and complied with the exemptions from Canadian continuous disclosure requirements afforded to designated foreign issuers under Part 4 of NI 71-102 with respect to financial statements, AIFs and MD&A. However, the Filer has not filed on SEDAR certain news releases and documents filed with or furnished to the U.S. Securities and Exchange Commission (“SEC”) required to be filed in order to rely on certain of the exemptions in Part 4 of NI 71-102 (collectively, the “Unfiled Documents”) and, as a result, is in default of its disclosure obligations under the Legislation with respect to the Unfiled Documents. The Unfiled Documents have been filed in the U.S. on EDGAR and are available on the Filer’s website.


18.          On December 29, 2015, the Filer issued and filed a press release announcing that it has submitted an application to the Decision Makers for a decision that is not a reporting issuer in the Jurisdictions and, if that decision is granted, the Filer will no longer be a reporting issuer or the equivalent in any jurisdiction in Canada.


19.          The Filer has provided an undertaking in favour of the securities regulatory authorities of the Jurisdictions that it will deliver to its security-holders resident in Canada, in the same manner and at the same time as delivered to its U.S. resident securityholders, all disclosure material required by U.S. securities law or exchange requirements to be delivered to U.S. resident securityholders.


20.          As a result, securityholders resident in Canada will continue to receive all continuous disclosure documents delivered to securityholders of the Filer who are resident in the U.S.


21.          The Filer will not be a reporting issuer in any jurisdiction in Canada immediately following the granting of the Exemptive Relief Sought.




Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.


The decision of the Decision Makers under the Legislation is that the Exemptive Relief Sought is granted.


“Grant Vingoe”


Ontario Securities Commission


“Tim Moseley”


Ontario Securities Commission