Exemption Orders (Discretionary)
SIGNALSOFT CORPORATION
2001 BCSECCOM 881
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – registration and prospectus relief for trades in connection with an exchangeable share acquisition of a Canadian non-reporting issuer by a public U.S. non-reporting issuer.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 48 and 76
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ALBERTA
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF SIGNALSOFT CORPORATION, SIGNALSOFT NS CO. AND BFOUND.COM SERVICES, INC.
MRRS DECISION DOCUMENT
[para 1]
WHEREAS the Canadian securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia and Alberta (the “Jurisdictions”) has received an application from SignalSoft Corporation (“SignalSoft”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that the requirements contained in the Legislation to be registered to trade in a security and to file and obtain a receipt for a preliminary prospectus and a prospectus (the “Registration and Prospectus Requirements”) shall not apply to certain intended trades in securities made in connection with the acquisition by SignalSoft of Bfound.com Services, Inc. (“Bfound”);
[para 2]
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the Executive Director of the British Columbia Securities Commission is the principal regulator for this application;
[para 3]
AND WHEREAS SignalSoft has represented to the Decision Makers that:
1. SignalSoft is a computer software company with corporate headquarters located at 1495 Canyon Blvd., Boulder, Colorado, 80302;
2. SignalSoft was incorporated under the laws of Delaware on October 21, 1998. Prior to that date, SignalSoft had been incorporated under the laws of Colorado in 1994;
3. SignalSoft completed an initial public offering on August 2, 2000 of 5,060,000 SignalSoft Common Shares (the “Signal Soft Common Shares”), including underwriters’ over-allotments of 660,000 SignalSoft Common Shares. SignalSoft Common Shares are listed for trading on the NASDAQ National Market under the symbol SGSF;
4. as of March 19, 2001, there were approximately 23,519,541 SignalSoft Common Shares issued and outstanding;
5. SignalSoft is not a reporting issuer in the Jurisdictions. SignalSoft is subject to the reporting requirements of the United States Securities and Exchange Act of 1934, and is not in default of any U.S. securities laws or NASDAQ requirements;
6. on March 10, 2000, NS Co. was incorporated under the laws of Nova Scotia, as an indirect wholly-owned subsidiary of SignalSoft;
7. NS Co. is not a reporting issuer in the Jurisdictions;
8. NS Co. was incorporated in order to acquire all of the issued and outstanding shares in the capital of Bfound, a company incorporated under the laws of British Columbia with offices in Victoria, British Columbia. Bfound is not a reporting issuer in the Jurisdictions;
9. pursuant to a purchase agreement among SignalSoft, NS Co., and the Bfound Shareholders dated as of March 22, 2000, SignalSoft, through NS Co., acquired all of the issued and outstanding shares in the capital of Bfound (the “Acquisition”) from the shareholders of Bfound (the “Bfound Shareholders”);
10. in consideration of the sale of all of the issued and outstanding shares of Bfound under the Acquisition, the Bfound Shareholders received, in varying amounts, cash and NS Co. Exchangeable Shares (the “Initial Exchange”);
11. the NS Co. Exchangeable Shares are not listed for trading on any stock exchange or similar market;
12. as a result of the Initial Exchange, 19 Bfound Shareholders, 15 of which reside in reside in British Columbia and 2 in Alberta, acquired a total of 548,332 NS Co. Exchangeable Shares. The remaining 2 Bfound Shareholders reside outside of Canada;
13. following the Acquisition, 10 Bfound Shareholders became employees of SignalSoft or an affiliate of SignalSoft, 9 of which are resident in British Columbia;
14. the NS Co. Exchangeable Shares provide the Bfound Shareholders with a security of a Canadian issuer having economic rights which are, as nearly as practicable, equivalent to those of a SignalSoft Common Share. The NS Co. Exchangeable Shares provide a right to exchange the NS Co. Exchangeable Shares for SignalSoft Common Shares on a one for one basis, subject to adjustment under certain circumstances (the “Exchange Feature”). The Exchange Feature can be implemented in order to effect a partial exchange of the NS Co. Exchangeable Shares for SignalSoft Common Shares;
15. distributions of SignalSoft Common Shares under the Exchange Feature to the 9 Bfound Shareholders who are residents of British Columbia and who are employees of an affiliate of SignalSoft will be exempt from the Registration and Prospectus Requirements;
16. if Canadian residents holding Bfound shares acquire the maximum number of SignalSoft Common Shares to which they are entitled under the Exchange Feature, there would be less than 10% of the total number of holders of record of SignalSoft Common Shares resident in Canada holding less than 10% of the total issued and outstanding SignalSoft Common Shares;
17. there is no market, and none is expected to develop, for the NS Co. Exchangeable Shares or the SignalSoft Common Shares in Canada;
18. the Acquisition was carried out in accordance with British Columbia, Alberta, and U.S laws, and, in connection with the Acquisition, the Bfound Shareholders were provided with all information material to the Acquisition and the SignalSoft Common Shares;
19. all disclosure material furnished to holders of SignalSoft Common Shares in the U.S. will be provided to holders of NS Co. Exchangeable Shares and to holders of SignalSoft Common Shares resident in the Jurisdictions; and
20. there are no registration and prospectus exemptions available for certain intended trades and potential trades in connection with the Exchange Feature (the “Non-Exempt Trades”);
[para 4]
AND WHEREAS pursuant to the System this Mutual Reliance Review System Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);
[para 5]
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
[para 6]
THE DECISION of the Decision Makers pursuant to the Legislation is that the Registration and Prospectus Requirements shall not apply to the Non-Exempt Trades, provided that the first trade inSignalSoft Common Shares acquired by the Bfound Shareholders in connection with the Acquisition shall be deemed to be a distribution in the Jurisdiction where the trade is made, unless the trade is made through NASDAQ or other market outside of Canada on which the SignalSoft Common Shares may be quoted or listed for trading at the time of the trade.
[para 7]
DATED August 28, 2001
Brenda Leong
Director