Clause 1(11)(b) -- Order that the issuer is a reporting issuer for the purposes of Ontario securities law -- Issuer is already a reporting issuer in Alberta, British Columbia and New Brunswick -- Issuer's securities listed for trading on the TSX Venture Exchange -- Continuous disclosure requirements in Alberta, British Columbia and New Brunswick are substantially the same as those in Ontario -- Issuer has a significant connection to Ontario.
Securities Act, R.S.O. 1990, c.S.5, as am.
July 27, 2018
IN THE MATTER OF THE SECURITIES ACT, RSO 1990, C. S. 5, AS AMENDED (the Act) AND IN THE MATTER OF TRIUS INVESTMENTS INC. (the Applicant)
ORDER (Section 1(11)(b))
UPON the application of the Applicant to the Ontario Securities Commission (the Commission) for an order pursuant to Section 1(11)(b) of the Act that, for the purposes of Ontario securities law, the Applicant is a reporting issuer in Ontario;
AND UPON considering the application and the recommendation of the staff of the Commission;
AND UPON the Applicant having represented to the Commission as follows:
1. The Applicant is a corporation incorporated under the Business Corporations Act (Alberta) with its registered office at 3700, 400 -- 3rd Avenue S.W., Calgary, Alberta T2P 4H2 and head office at 70 Trius Drive, Fredericton, New Brunswick, E3B 5E3.
2. The authorized share capital of the Applicant consists of an unlimited number of common shares (the Common Shares) and preferred shares, of which 11,270,841 Common Shares are issued and outstanding as of the date hereof.
3. The Applicant is a reporting issuer under the Securities Act (Alberta) (the AB Act) (since October 2. 1998), the Securities Act (British Columbia) (the BC Act) (since November 9. 1999) and the Securities Act (New Brunswick) (the NB Act) (since November 9. 1999).
4. The Applicant is not currently a reporting issuer in any jurisdiction other than British Columbia, Alberta and New Brunswick.
5. The Applicant's principal regulator is the New Brunswick Financial and Consumer Services Commission, which will continue to be the principal regulator for the Applicant once it has obtained reporting issuer status in Ontario.
6. The Applicant is not on the lists of defaulting reporting issuers maintained pursuant to the BC Act, the AB Act or the NB Act and is not in default of any requirement of either the BC Act, the AB Act or the NB Act or the rules and regulations made thereunder.
7. The continuous disclosure requirements of the BC Act, the AB Act and the NB Act are substantially the same as the continuous disclosure requirements under the Act.
8. The continuous disclosure documents filed by the Applicant under the BC Act, the AB Act and the NB Act since November 15, 1999 are available on the System for Electronic Document Analysis and Retrieval.
9. The Applicant's Common Shares are listed and posted for trading on the TSX Venture Exchange (the Exchange) under the trading symbol "TRU". The Applicant's Common Shares are not traded on any other stock exchange or trading or quotation system.
10. The Applicant is not in default of any of the rules, regulations or policies of the Exchange.
11. Pursuant to the policies of the Exchange, a listed-issuer, which is not otherwise a reporting issuer in Ontario, must assess whether it has a "significant connection to Ontario" (as defined in the policies of the Exchange) and, upon becoming aware that it has a significant connection to Ontario, promptly make a bona fide application to the Commission to be deemed a reporting issuer in Ontario
12. The Applicant has determined that it has a significant connection to Ontario as, on November 29, 2017, Resurgent Capital Corp. (Resurgent), a private company whose investment decisions are controlled by Mr. Joel Freudman, the president and chief executive officer of the Applicant, acquired an aggregate of 2,000,000 Common Shares of the Applicant from two vendors. Accordingly, Resurgent became the single largest shareholder of the Applicant, controlling approximately 17.7% of the issued and outstanding shares of the Applicant. This acquisition further confirmed that residents of Ontario are the beneficial holders of more than 10% of the Applicant's Common Shares.
13. Additionally, at the Applicant's shareholder meeting held on November 30, 2017, three Ontario residents were elected to the Applicant's board of directors, meaning that a majority of the Applicant's directors are currently resident in Ontario.
14. On May 26, 2018 the Applicant entered into a definitive purchase and sale agreement with an arm's length purchaser, PVR Holdings LLC, whereby Trius will sell its 100% membership interest in its wholly-owned subsidiary TRU Investments LLC (the Subsidiary Sale).
15. Following the completion of the Subsidiary Sale, the Applicant will not have any active business operations or assets other than cash and receivables. As a result, the Applicant will cease to meet the listing requirements of the Exchange and its listing may be transferred to NEX.
16. The Applicant is currently considering a transformative transaction such as a reverse take-over, merger, amalgamation and other forms of combinations or transactions similar to the foregoing. To date, the Applicant has not been involved in any discussions and has not entered into any agreements that could be considered a material change in this regard.
17. Other than as set out in Appendix A hereto, neither the Applicant nor any of its officers, directors, nor, to the knowledge of the Applicant or its officers and directors, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, has:
(a) been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority;
(b) entered into a settlement agreement with a Canadian securities regulatory authority; or
(c) been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision.
18. Other than as set out in Appendix A hereto, neither the Applicant nor any of its officers, directors, nor, to the knowledge of the Applicant or its officers and directors, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, is or has been subject to:
(a) any known ongoing or concluded investigations by:
(i) a Canadian securities regulatory authority; or
(ii) a court or regulatory body, other than a Canadian securities regulatory authority, that would be likely to be considered important to a reasonable investor making an investment decision; or
(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or appointment of a receiver, receiver manager or trustee, within the preceding 10 years.
19. None of the officers or directors of the Applicant, nor, to the knowledge of the Applicant or its officers and directors, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, is or has been at the time of such event an officer or director of any other issuer which is or has been subject to:
(a) any cease trade order or similar order, or order that denied access to any exemptions under Ontario securities law, for a period more than 30 consecutive days, within the preceding 10 years; or
(b) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.
AND UPON the Commission being satisfied that granting this Order would not be prejudicial to the public interest;
IT IS HEREBY ORDERED pursuant to Section 1(11)(b) of the Act that the Applicant is a reporting issuer for the purposes of Ontario securities laws.
As announced by the Applicant in a press release dated April 11, 2017, the TSX Venture Exchange (the Exchange) conducted a review (the Review) of certain of the Applicant's practices and compliance with the Exchange's Corporate Finance Policy (the Exchange Policy). Following the Review, the Applicant was placed on Notice to Comply by the Exchange citing the following contraventions of the Exchange Policy with respect to certain related party transactions:
• Sections 6 & 19.2 of Exchange Policy 3.1, Directors, Officers, Other Insiders & Personnel, and Corporate Governance.
• Section 8 of Exchange Policy 3.2 Filing Requirements and Continuous Disclosure.
• Section 3.8(t) of Exchange Policy 3.3 Timely Disclosure.
Since the Exchange completed the Review in October 2016, the Applicant has complied with each of the Exchange's requirements stipulated based on the Review, including, among other things:
1. applying for a change of business under the Exchange Policy from a Tier II Industrial issuer to a Tier II Investment issuer;
2. adopting the following corporate governance policies: (a) corporate investment policy; (b) corporate disclosure policy; and (c) code of business conduct;
3. adjusting the composition of its board of directors to include two independent directors; and
4. certain of the Applicant's directors and officers repaid to the Applicant the aggregate sum of approximately $188,000, in respect of the losses incurred by the Applicant in connection with specific historical related party transactions.
To the best of the Applicant's knowledge, it and its directors and officers are currently compliant with Exchange Policy and applicable securities laws.