Martello Technologies Group Inc. (formerly Newcastle Energy Inc.) – s. 1(11)(b)

Headnote

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 British Columbia and Alberta – Issuer's securities listed for trading on the TSX Venture Exchange – Continuous disclosure requirements in British Columbia and Alberta are substantially the same as those in Ontario – Issuer has a significant connection to Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(11)(b).

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

AND

IN THE MATTER OF
MARTELLO TECHNOLOGIES GROUP INC.
(formerly NEWCASTLE ENERGY INC.)

ORDER
Clause 1(11)(b))

UPON the application (the Application) of Martello Technologies Group Inc. (the Applicant) to the Ontario Securities Commission (the Commission) for an order pursuant to clause 1(11)(b) of the Act deeming the Applicant to be a reporting issuer for the purposes of Ontario securities law;

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

AND UPON the Applicant having represented to the Commission as follows:

1.             The Applicant was formed by incorporation pursuant to the Business Corporations Act (British Columbia) under the name Cove Energy Corporation on April 6, 1981 (subsequently renamed Cove Resources Corporation on May 13, 1988, Consolidated Cove Resources Corporation on August 11, 1992, Derek Resources Corporation on May 11, 1995, Derek Oil & Gas Corporation on March 3, 2003, Newcastle Energy Corp. on July 2, 2013 and Martello Technologies Group Inc. on July 10, 2018) and continued under the Canada Business Corporations Act pursuant to articles of continuance dated September 10, 2018. The address of the Applicant’s registered and head office is 390 March Road, Suite 110, Ottawa, ON K2K 0G7.

2.             The Applicant is a reporting issuer under the Securities Act (British Columbia) (the BC Act) and the Securities Act (Alberta) (the AB Act). The Applicant became a reporting issuer in British Columbia and Alberta on June 10, 1983.

3.             On August 15, 2018, the Applicant and Martello Technologies Corporation (MTC), a private company incorporated under the laws of Canada, and with its principal and registered office in Ottawa, ON, completed a reverse takeover transaction within the meaning of the policies of the TSX-V (the Reverse Takeover Transaction). As a result of the Reverse Takeover Transaction, among other things: (i) the Applicant changed its name to Martello Technologies Group Inc.; (iii) the Applicant exchanged all of the issued and outstanding securities of MTC for 165,797,436 Common Shares and 1,028,576 purchase warrants of the Applicant; and (iv) MTC became a wholly-owned subsidiary of the Applicant.

4.             The Applicant is not a reporting issuer or the equivalent in any jurisdiction in Canada other than British Columbia and Alberta.

5.             The Applicant’s authorized share capital consists solely of an unlimited number of common shares (the Common Shares). As of the date hereof there are 171,883,976 Common Shares issued and outstanding.

6.             The Common Shares are listed and posted for trading on the TSX Venture Exchange (the TSX-V) under the symbol “MTLO” The Common Shares were listed on the TSX-V on September 12, 2018.

7.             The Common Shares are not listed or posted for trading, and are not anticipated to be listed or posted for trading, on any other stock exchange in Canada. The Common Shares are not traded on any other stock exchange or trading or quotation system outside of Canada.

8.             The continuous disclosure requirements under the BC Act and the AB Act are substantially similar to the disclosure requirements under the Act.

9.             As of the date hereof, the Applicant is not on the default list of the securities regulatory authority in any jurisdiction in Canada in which it is a reporting issuer and the Applicant is not in default of any requirement of the Act, the BC Act or the AB Act.

10.          The continuous disclosure materials filed by the Applicant as a reporting issuer in British Columbia and Alberta are available on the System for Electronic Document Analysis and Retrieval (SEDAR).

11.          The Applicant is not in default of any of the rules, regulations or policies of the TSX-V.

12.          Pursuant to section 9.1 of the NEX Policy and section 18 of Policy 3.1 of the TSX Venture Exchange (TSXV) Corporate Finance Manual (TSXV Manual), 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 Policy 1.1 of the TSXV Manual) and, upon becoming aware that it has a Significant Connection to Ontario, promptly make a bona fide application to the Commission to be designated a reporting issuer in Ontario.

13.          The Applicant has determined that it has a significant connection to Ontario. Following the completion of the Reverse Takeover Transaction, the Applicant’s head office and registered office are located in Ontario; its board and management are located in Ontario; and shareholders holding securities of the Applicant carrying more than 20% of the voting rights attached to the outstanding securities of the Applicant are resident in Ontario.

14.          The British Columbia Securities Commission (BCSC) is currently the principal regulator for the Applicant. Ontario will be the principal regulator for the Applicant once it has obtained reporting issuer status in Ontario. Upon the granting of this Order, the Applicant will amend its SEDAR profile to indicate that Ontario is its principal regulator.

15.          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: (i) been the subject of any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority; (ii) entered into a settlement agreement with a Canadian securities regulatory authority; or (iii) 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.

16.          Neither the Applicant, nor any of its officers, directors, nor, to the knowledge of the Applicant or its directors or officers, any shareholder holding sufficient securities of the Applicant to affect materially the control of the Applicant, is or has been subject to: (i) any known ongoing or concluded investigations by (a) a Canadian securities regulatory authority, or (b) 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 (ii) any bankruptcy or insolvency proceedings, or other proceeding, arrangements or compromises with creditors, or the appointment of a receiver, receiver-manager or trustee, within the preceding 10 years.

17.          Neither the Applicant nor any of its officers, directors, nor, to the knowledge of the Applicant or its officers or 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: (i) any cease trade order or similar order, or order that denied access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, within the past 10 years; or (ii) any bankruptcy or insolvency proceedings, or other proceedings, arrangements or compromises with creditors, or appointment of a receiver, receiver-manager or trustee, within the past 10 years , other than the following:

a.             Terrence Matthews, a director of the Applicant, is a director of Magor Corporation (Magor), a reporting issuer listed on the NEX board of the TSXV. On January 6, 2017, the Commission issued a cease trade order against Magor for failure to file interim financial statements (and related management’s discussion and analysis and certifications) for the period ended October 31, 2016. The cease trade order is still in effect.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED pursuant to clause 1(11)(b) of the Act that the Applicant be deemed to be a reporting issuer for the purposes of Ontario securities law.

DATED at Toronto on this 4th day of July, 2019.

“Michael Balter”
Manager, Corporate Finance