Exemption Orders (Discretionary)
INNOVA LIFESCIENCES CORPORATION
2001 BCSECCOM 740
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF INNOVA LIFESCIENCES CORPORATION
Exemption Order Under Section 114(2)(c)
[para 1]
WHEREAS Innova LifeSciences Corporation (“Innova”) has applied to the Executive Director for an order under section 114(2)(c) of the Securities Act, R.S.B.C. 1996, c. 418 that Innova is exempt from sections 105 to 108 and 110 of the Act with respect to the purchase of 1,000,000 of its common shares;
[para 2]
AND WHEREAS Innova has represented to the Executive Director that:
1. Innova was continued under the Business Corporations Act (Ontario), is a reporting issuer under the Act and is not in default of any requirement of the Act or the Securities Rules, B.C. Reg. 194/97;
2. Innova has an authorized capital of an unlimited number of common shares, of which 40,038,469 common shares are issued and outstanding as of April 20, 2001;
3. the common shares of Innova are listed for trading on The Toronto Stock Exchange;
4. as of April 20, 2001 Innova had 20 shareholders of record whose addresses were in British Columbia holding 3,776,841 common shares or 9.4% of Innova’s outstanding common shares;
5. pursuant to a private agreement between Ventures West III – Canada Limited Partnership (“Ventures West”), a business located in B.C. and The VenGrowth Investment Fund Inc. and The VenGrowth II Investment Fund Inc. (the two latter corporations being collectively referred to as “VenGrowth”), businesses located in Ontario, Ventures West proposed to sell to VenGrowth 1,000,000 common shares of Innova at $0.45 per share;
6. VenGrowth, as a labour sponsored investment fund, is precluded under the Community Small Business Investment Funds Act of Ontario (the “Ontario Act”) from purchasing shares in the secondary market and may only purchase shares directly from an issuer’s treasury;
7. the circumstances under which VenGrowth can obtain an exemption from the provisions of the Ontario Act, and thus acquire the Innova common shares directly from Ventures West, are inconsistent with VenGrowth’s investment parameters;
8. but for the restrictions in the Ontario Act, VenGrowth could purchase the Innova common shares directly from Ventures West pursuant to registration, prospectus and take over bid exemptions provided for in the applicable securities legislation;
9. as VenGrowth cannot purchase the Innova common shares directly from Ventures West, Innova has agreed to facilitate the proposed transaction by purchasing for cancellation 1,000,000 of its common shares at $0.45 per share (the “Shares”) from Ventures West and issuing 1,000,000 of its common shares at $0.45 per share from treasury to VenGrowth;
10. the Ministry of Finance (Ontario), the regulatory body that governs the Ontario Act, has confirmed that the proposed transaction will not contravene the provisions of the Ontario Act;
11. Innova’s purchase of the Shares from Ventures West and issuance of 1,000,000 of its common shares to VenGrowth will be carried out privately and not through any public market; and
12. Innova’s offer to purchase the Shares from Ventures West in order to facilitate the proposed transaction will constitute an “issuer bid” under section 92(1) of the Act and does not fall within the exemptions set out in section 99 of the Act relating to exempt issuer bids;
[para 3]
AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;
[para 4]
IT IS ORDERED under section 114(2)(c) of the Act that Innova is exempt from sections 105 to 108 and 110 of the Act in respect of its offer to purchase the Shares from Ventures West.
[para 5]
DATED on July 13, 2001.
Brenda Leong
Director