Securities Law & Instruments

Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications and National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- application for order that issuer is not a reporting issuer and for full revocation of failure-to-file cease trade order -- issuer cease traded due to failure to file annual audited financial statements and annual management's discussion and analysis and related certifications -- issuer has completed reorganization under the Companies' Creditors Arrangement Act -- issuer has applied for a full revocation of the cease trade order -- amalgamated issuer created as part of the CCAA Reorganization has applied to cease to be a reporting issuer in each jurisdiction where it is a reporting issuer -- full revocation of the failure-to-file cease trade order and cease to be reporting issuer application granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(10)(a)(ii) and 144.

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications.

National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.

DÉCISION No 2020-DIC-0027

Dossier no 29444

[TRANSLATION]

December 14, 2020

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUEBEC AND ONTARIO (the JURISDICTIONS) AND IN THE MATTER OF A REVOCATION OF A FAILURE-TO-FILE CEASE TRADE ORDER AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATION AND IN THE MATTER OF NEMASKA LITHIUM INC.

ORDER

Background

Nemaska Lithium Inc. (the Issuer) is the ultimate surviving amalgamated corporation and the successor entity to the corporation also named "Nemaska Lithium Inc." prior to the CCAA Reorganization (defined below). As the successor to such predecessor entity pursuant to the CCAA Reorganization, the Issuer is subject to a failure-to-file cease trade order (the FFCTO) issued by the regulator or securities regulatory authority in each of the Jurisdictions (each a Decision Maker) on November 6, 2020.

The Decision Makers have received an application from the Issuer, through its predecessor entity named Nemaska Lithium Inc., under the securities legislation of the Jurisdictions (the Legislation) for:

(i) an order (the FFCTO Revocation Order) under the Legislation revoking the FFCTO; and

(ii) an order (the Cease to be a Reporting Issuer Order) under the Legislation that the Issuer, as a successor to its predecessor entity named Nemaska Lithium Inc, has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer.

The FFCTO Revocation Order is the order of the regulator or securities regulatory authority in Québec (the Principal Regulator) and evidences the decision of the Decision Maker in Ontario.

In respect of the Cease to be a Reporting Issuer Order, under the Process for Cease to be a Reporting Issuer Applications (for a dual application):

(a) the regulator or securities regulatory authority in Québec is the principal regulator;

(b) the Issuer, through its predecessor entity named Nemaska Lithium Inc., has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied in Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon; and

(c) the Cease to be a Reporting Issuer Order is the order of the Principal Regulator and evidences the decision of the regulator or securities regulatory authority in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions or, in Québec, in Regulation 14-501Q on definitions, MI 11-102, National Policy 11-206 Process for Cease to be Reporting Issuer Applications (NP 11-206) and National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions have the same meanings if used in this order, unless otherwise defined.

Representations

The order is based upon the following facts represented by the Issuer:

1. Nemaska Lithium Inc., as a predecessor to the Issuer, was, and the Issuer is, a corporation existing under the Canada Business Corporations Act with its registered and principal Canadian office in the Province of Québec.

2. The Issuer is, as a successor to its predecessor entity also named Nemaska Lithium Inc., a reporting issuer in default of filing its annual audited financial statements and annual management's discussion and analysis for the year ended June 30, 2020 under theSecurities Act (Québec) (the Act) and the securities legislation of each of the jurisdictions of Canada and the annual certifications required in respect of such filings pursuant to Regulation 52-109 respecting Certification of Disclosure in Issuers' Annual and Interim Filings (Filings).

3. The authorized share capital of Nemaska Lithium Inc., as a predecessor to the Issuer, consisted of an unlimited number of common shares (Common Shares).

4. Immediately prior to the implementation of the CCAA Reorganization, Nemaska Lithium Inc., as a predecessor to the Issuer, had 847,634,338 issued and outstanding Common Shares.

5. In addition to the Common Shares, there were also outstanding, immediately prior to the implementation of the CCAA Reorganization, options to purchase Common Shares that were issued pursuant to the share purchase option plan of Nemaska Lithium Inc., as a predecessor to the Issuer, all of which were "out of the money" (Options).

6. Nemaska Lithium Inc., as a predecessor to the Issuer, had no securities issued and outstanding immediately prior to the implementation of the CCAA Reorganization other than the Common Shares and the Options.

7. The Common Shares were previously listed and posted for trading on the Toronto Stock Exchange (TSX). The Common Shares were delisted from the TSX on February 6, 2020, and from the American stock exchange Over-the-Counter QX on December 31, 2019.

8. Immediately prior to the implementation of the CCAA Reorganization, no securities of Nemaska Lithium Inc., as a predecessor to the Issuer, were traded in Canada on a "marketplace" as defined in Regulation 21-101 respecting Marketplace Operation (Regulation 21-101).

9. On November 6, 2020, an FFCTO was issued in respect of the Filings. The FFCTO took effect in each jurisdiction of Canada that has a statutory reciprocal order provision, subject to the terms of the local securities legislation.

10. As the successor to Nemaska Lithium Inc., the FFCTO applies to the Issuer as of and from the Effective Date (defined below).

11. Since October 29, 2020, Nemaska Lithium Inc., as a predecessor to the Issuer, had been and remained in default regarding the Filings and its interim financial statements and interim management's discussion and analysis for the period ended September 30, 2020 under the Act and the securities legislation of each of the jurisdictions of Canada and the certifications required in respect of such filings pursuant to Regulation 52-109 (Interim Filings).

The CCAA Proceedings

12. On December 23, 2019, Nemaska Lithium Inc., Nemaska Lithium P1P Inc. (Nemaska P1P), Nemaska Lithium Shawinigan Transformation Inc. (Nemaska Shawinigan), Nemaska Lithium Whabouchi Inc. Nemaska Whabouchi) and Nemaska Lithium Innovation Inc. (Nemaska LI) (collectively, Nemaska Entities) sought and obtained protection from their creditors under the Companies' Creditors Arrangement Act (the CCAA) (CCAA Proceedings), the whole pursuant to the provisions of an order of the Superior Court of Québec (Commercial Division) (Court), as amended, restated and supplemented since December 23, 2019.

13. PricewaterhouseCoopers Inc. was appointed by the Court as the monitor (Monitor) in the CCAA Proceedings.

14. On January 29, 2020, the Nemaska Entities sought and obtained from the Court an order pursuant to the CCAA approving a sale or investor solicitation process in respect of the Nemaska Entities authorizing the solicitation of offers for the sale of all or substantially all of their property, assets and undertakings all in accordance with the sale or investor solicitation procedures.

15. On October 15, 2020, the Court issued an Approval and Vesting Order (RVO) approving, among other things, the acquisition by Investissement Québec (IQ) and Quebec Lithium Partners (UK) Limited (QLP) of all of the issued and outstanding shares of a corporation resulting from the amalgamation of the Nemaska Entities and the Orion Creditors (as defined below) in a series of steps (CCAA Reorganization) set out in a share purchase agreement among IQ, QLP and the Nemaska Entities (Share Purchase Agreement).

The CCAA Reorganization

16. The CCAA Reorganization included the completion of the following key steps in the order set out below:

(a) all of the Common Shares were exchanged for common shares of NMX Residual Liabilities Inc. (New ParentCo), initially a wholly-owned subsidiary of the Nemaska Lithium Inc., on a one-for-one basis, such that, as a consequence, New ParentCo now holds all of the then issued and outstanding Common Shares and previous holders of issued and outstanding Common Shares now hold the equivalent number of common shares of New ParentCo (Share Exchange);

(b) simultaneously with the preceding step, the one voting share held by Nemaska Lithium Inc. in the capital of New ParentCo and all of the Options were cancelled for no consideration;

(c) Nemaska Shawinigan acquired all of the issued and outstanding shares in the capital of Nemaska Lithium Inc.'s largest secured creditors, OMF Fund II (K) Ltd. and OMF Fund II (N) Ltd. (collectively, Orion Creditors) from OMF (Cayman) Co-VII Ltd. (OMF Cayman) pursuant to a share purchase agreement among Nemaska Shawinigan, OMF Cayman, IQ and QLP;

(d) Nemaska Lithium Inc., Nemaska P1P, Nemaska Shawinigan, Nemaska LI and the Orion Creditors amalgamated pursuant to a long-form amalgamation (the corporation resulting from such amalgamation, AmalCo1) and the shares of Nemaska Lithium Inc. held by New ParentCo were converted into two common shares of AmalCo1;

(e) AmalCo1 and Nemaska Whabouchi amalgamated pursuant to a long-form amalgamation to form the Issuer;

(f) IQ and QLP acquired all of the issued and outstanding shares of the Issuer from New ParentCo pursuant to the terms of the Share Purchase Agreement;

(g) IQ and QLP each subscribed for 30,000,000 common shares of the Issuer for an aggregate subscription price of US$60,000,000.

17. The effective date of the CCAA Reorganization was December 1, 2020 (Effective Date).

18. The FFCTO contained a carve-out allowing the Nemaska Entities and their successors and assigns to implement the CCAA Reorganization steps.

19. As and from the Effective Date, the Issuer, as the ultimate legal successor to Nemaska Lithium Inc., became a reporting issuer under the securities legislation of each jurisdiction of Canada.

20. As of and since the Effective Date, the authorized share capital of the Issuer consists solely of common shares.

21. As of and since the Effective Date, the Issuer only has two registered and beneficial securityholders, namely IQ and QLP.

22. The rights of the shareholders of the Issuer are governed by and subject to the Issuer's share terms, which are set forth in (a) the Issuer's Articles of Amalgamation, and (b) a unanimous shareholders' agreement to which all shareholders of the Issuer, initially only IQ and QLP, shall be parties following the completion of the CCAA Reorganization.

23. There is no obligation in any of the RVO, the Issuer's Articles of Amalgamation or the unanimous shareholders' agreement for the Issuer to maintain its status as a reporting issuer and no prohibition on ceasing to be a reporting issuer.

24. The Issuer as a successor to Nemaska Lithium Inc., is not in default of securities legislation in any jurisdiction of Canada, other than its obligations to complete the Filings and the Interim Filings, and therefore is not eligible to use the "simplified procedure" under NP 11-206.

25. As of and since the Effective Date, the Issuer is not an OTC reporting issuer under Regulation 51-105 respecting Issuers Quoted in the U.S. Over-the-Counter Markets.

26. As of and since the Effective Date, no securities of the Issuer are traded on a "marketplace" as defined in Regulation 21-101 and there is currently no intention on the part of the shareholders, directors or officers of the Issuer to cause the Issuer to seek financing by way of a public offering of its securities in Canada or elsewhere.

Order

Each of the Decision Makers is satisfied that the FFCTO Revocation Order and the Cease to be a Reporting Issuer Order meet the test set out in the Legislation for the Decision Maker to make the orders.

The decision of the Decision Makers under the Legislation is that the FFCTO Revocation Order and the Cease to be a Reporting Issuer Order are granted.

"Marie-Claude Brunet-Ladrie"
Acting Director, Continuous Disclosure