Rosehearty Energy Inc. – s. 144

Application by an issuer for a revocation of a cease trade order issued by the Commission - 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.

Statutes Cited

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, CHAPTER S.5, AS AMENDED
(the Act)

AND

IN THE MATTER OF
ROSEHEARTY ENERGY INC.

ORDER
(Section 144 of the Act)

                WHEREAS the securities of Rosehearty Energy Inc. (the Applicant) are subject to a cease trade order dated May 12, 2015, issued by the Director of the Ontario Securities Commission (the Commission) pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, and as extended by a further cease trade order issued by the Director on May 25, 2015 pursuant to paragraph 2 of subsection 127(1) of the Act (the Ontario Cease Trade Order), directing that all trading in the securities of the Applicant, whether direct or indirect, cease until the Ontario Cease Trade Order is revoked by the Director;

                AND WHEREAS the Ontario 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 Ontario Cease Trade Order;

                AND WHEREAS the Applicant has applied to the Commission under section 144 of the Act for a full revocation of the Ontario Cease Trade Order;

                AND UPON the Applicant having represented to the Commission that:

1.             The Applicant was incorporated on September 1, 2000 in Ontario and continued under the Business Corporations Act (British Columbia) on July 30, 2014.

2.             The Applicant’s head office is located at #408 – 150 24th Street, West Vancouver, British Colum-bia V7V 4G8.

3.             The Applicant is a junior exploration company focused on mineral and oil and gas properties.

4.             The Applicant is a reporting issuer under the securities legislation of the provinces of British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia (the Reporting Jurisdictions). The Applicant is not a reporting issuer in any other jurisdiction in Canada. The Applicant’s principal regulator is the British Columbia Securities Commission (the BCSC).

5.             The Applicant’s authorized share capital consists of an unlimited number of common shares, without nominal or par value (the Common Shares). As of the date hereof, there are 13,179,051 Common Shares issued and outstanding.

6.             The Applicant has no other securities, including debt securities, issued and outstanding.

7.             The Common Shares, under the trading symbol “RHX”, were delisted from trading on the Canadian Securities Exchange (CSE) on January 27, 2016. Prior to the CSE, the Common Shares were listed on the TSX Venture Exchange under the symbol “GAX”. Other than the foregoing, the Common Shares have not been nor are they now listed on any other stock exchange. The Common Shares are not currently listed on any other exchange or market in Canada or elsewhere.

8.             The Ontario Cease Trade Order was issued as a result of the Applicant’s failure to file its annual audited financial statements, the accompanying management's discussion and analysis (MD&A) and related certifications of annual filings as required by National Instrument 52-109 Certi-fication of Disclosure in Issuers' Annual and Interim Filings (NI 52-109) for the fiscal year ended December 31, 2014 (the 2014 Annual Filings).

9.             The Applicant is also subject to a cease trade order issued by the BCSC dated May 8, 2015 (the BC Cease Trade Order), a cease trade order issued by the Alberta Securities Commission (the ASC) dated August 7, 2015 (the Alberta Cease Trade Order) and a cease trade order issued by the Autorité des marchés financiers dated May 28th, 2015 (the AMF Cease Trade Order) (collectively with the Ontario Cease Trade Order, the Cease Trade Orders).

10.          The Applicant has concurrently applied to the BCSC for a full revocation of the BC Cease Trade Order, to the ASC for a full revocation of the Alberta Cease Trade Order and to the AMF for a full revocation of the AMF Cease Trade Order.

11.          Subsequent to the issuance of the Ontario Cease Trade Order, the Applicant failed to file in the Reporting Jurisdictions the following continuous disclosure documents within the prescribed time-frame in accordance with the requirements of applicable securities laws:

(i)            all audited annual financial statements, accompanying MD&A and related NI 52-109 certificates for the financial years ended December 31, 2015 to December 31, 2017;

(ii)           all unaudited interim financial statements, accompanying MD&A and related NI 52-109 certificates for the interim periods ended March 31, 2015 through Septem-ber 30, 2018; and

(iii)          the statements of executive compen-sation for the financial years ended December 31, 2014 to December 31, 2017.

12.          Since the issuance of the Ontario Cease Trade Order, the Applicant has filed in the Reporting Jurisdictions:

(i)            the audited annual financial statements, accompanying MD&A and related NI 52-109 certificates for each of the fiscal years ended December 31, 2016 and 2017;

(ii)           the interim financial statements, accom-panying MD&A and related NI 52-109 certificates for the interim periods ending March 31, 2018, June 30, 2018 and September 30, 2018; and

(iii)          the statements of executive compen-sation for the financial years ended December 31, 2016 and 2017.

13.          The Applicant has not filed (i) audited annual financial statements, accompanying MD&A, and related NI 52-109 certificates for the fiscal years ended December 31, 2014 and December 31, 2015; (ii) unaudited interim financial statements, accompanying MD&A, and related NI 52-109 certificates for the interim periods ended March 31, 2015 to September 30, 2017 and (iii) statements of executive compensation for the years ended December 31, 2014 and 2015 (collectively, the Outstanding Filings) and has requested the Commission to exercise its discretion in accordance with sections 6 and 7 of National Policy 12-202 Revocation of Certain Cease Trade Orders and elect not to require the Applicant to file the Outstanding Filings.

14.          Except for the Outstanding Filings, the Applicant is (i) up-to-date with all of its continuous disclosure obligations; (ii) not in default of any requirements under applicable securities legislation or the rules and regulations made pursuant thereto in any of the Reporting Jurisdictions, except for the existence of the Cease Trade Orders and that it has not held its annual general shareholders meeting for 2014, 2015, 2016 and 2017; and (iii) not in default of any of its obligations under the Cease Trade Orders.

15.          The Applicant’s issuer profile on the System for Electronic Document Analysis and Retrieval (SEDAR) and issuer profile supplement on the System for Electronic Disclosure by Insiders (SEDI) are current and accurate.

16.          The Applicant has paid all outstanding activity, participation and late filing fees that are required to be paid to the Commission and has filed all forms associated with such payments.

17.          The Applicant is not considering nor is it involved in any discussions related to, a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

18.          Since the issuance of the Cease Trade Orders, there have not been any material changes in the business, operations or affairs of the Applicant that have not been disclosed to the public.

19.          The Applicant has given the Commission a written undertaking that it will hold an annual meeting of its shareholders within three months after the date on which the Ontario Cease Trade Order is revoked.

20.          Other than the Cease Trade Orders, the Applicant has not previously been subject to a cease trade order issued by any securities regulatory authority.

21.          Upon the issuance of this revocation order and concurrent revocation orders from the BCSC, the ASC and the AMF, the Applicant will issue a news release announcing the revocation of the Cease Trade Orders and concurrently file the news release and a related material change report on SEDAR.

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

                AND UPON the Director being satisfied that it would not be prejudicial to the public interest to revoke the Ontario Cease Trade Order;

                IT IS ORDERED pursuant to section 144 of the Act that the Ontario Cease Trade Order is revoked.

                DATED at Toronto, Ontario on this 30th day of January, 2019.

“Michael Balter”
Manager, Corporate Finance
Ontario Securities Commission