Exemption Orders (Discretionary)
VOICE MOBILITY INTERNATIONAL, INC.
2001 BCSECCOM 858
COR#2001/093
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF VOICE MOBILITY INTERNATIONAL, INC.
Exemption Order Under Sections 48 and 76
[para 1]
WHEREAS Voice Mobility International, Inc. ("VM International") has applied to the British Columbia Securities Commission for an order under sections 48 and 76 of the Securities Act, R.S.B.C. 1996, c. 418 that certain intended trades in securities of VM International are exempt from the registration and prospectus requirements of sections 34(1)(a) and 61 of the Act;
[para 2]
AND WHEREAS VM International has represented to the Commission that:
1. VM International was incorporated on October 2, 1997 under the laws of the State of Nevada;
2. VM International's operations are carried out through its Canadian operating subsidiary, Voice Mobility Inc. (“VMI”) and through its US operating subsidiary, Voice Mobility (US) Inc., and substantially all of its physical assets are located in British Columbia;
3. the majority of the directors and officers of VM International reside in British Columbia;
4. the authorized share capital of VM International consists of 100,000,000 common shares and 1,000,000 preferred shares, of which 27,158,782 common shares, one Series A Preferred Share and 585,698 Series B Preferred Shares are issued and outstanding;
5. the common shares of VM International have been publicly traded on the NASDAQ OTC Bulletin Board since June 30, 1999, and have been listed on The Toronto Stock Exchange since July 16, 2001 and on the Frankfurt Stock Exchange since April 12, 2000;
6. the securities of VM International have been registered under section 12 of the Securities Exchange Act of 1934 of the United States of America, as amended, since November 16, 1999 and VM International is in compliance with its reporting requirements in the United States of America;
7. VM International filed a registration statement on Form S-1 with the Securities and Exchange Commission of the United States of America, which was declared effective on June 8, 2001;
8. VM International became a reporting issuer under the Act on July 11, 2001 when it received a receipt for its prospectus from the Commission;
9. Voice Mobility Canada Limited (“VM Canada”), a subsidiary of VM International, was formed for the acquisition of VMI and is not a reporting issuer under the Act;
10. as part of the acquisition of VMI, VM Canada issued 6,600,000 preferred shares from its treasury (the “Share Equivalents”) on September 16, 1999 to shareholders of VMI, in exchange for all of the common shares of VMI;
11. each Share Equivalent has essentially the same voting rights, dividend and other rights as one common share of VM International, and holders of Share Equivalents are entitled to receive all materials sent to holders of VM International common shares;
12. each Share Equivalent is exchangeable into one common share of VM International at any time not later than July 1, 2009, for no additional consideration;
13. VM International has distributed certain securities in reliance on registration and prospectus exemptions available under the Act and the Securities Rules, B.C. Reg. 194/97 and, as a result, the following are subject to resale restrictions contained in the Rules:
(a) 20,646,282 common shares of VM International;
(b) 10,477,334 common shares of VM International issuable on exercise of warrants (classes A through N);
(c) 9,271,277 common shares of VM International issuable on exercise of stock options; and
(d) 1,171,396 common shares of VM International issuable on conversion of Series B Preferred Shares,
(collectively, the “Securities”);
14. prior to VM International becoming a reporting issuer under the Act, there were approximately 71 British Columbia residents or 46% of registered shareholders holding approximately 3,000,000 common shares of VM International, representing 15% of the total outstanding common shares;
15. prior to VM International becoming a reporting issuer under the Act, all of the Share Equivalents were held by five British Columbia residents and if these were exchanged into common shares of VM International, British Columbia residents would hold approximately 35% of the total common shares of VM International;
16. principals of VM International hold a total of 5,333,007 common shares of VM International including 4,237,500 of the Share Equivalents, which securities are subject to an escrow agreement and held by Computershare Trust Company of Canada;
17. the exemptions from the registration and prospectus requirements in sections 45(2)(12) and 74(2)(11) of the Act are not available in connection with the distribution by VM International of any of its common shares exchanged for the Share Equivalents, because holders of the Share Equivalents will receive common shares of VM International rather than of VM Canada;
18. the common shares of VM International issued on exchange of the Share Equivalents will be, and the Securities are, subject to resale restrictions, including the requirement contained in section 140(2)(a)(ii) of the Rules that VM International have been a reporting issuer under the Act for at least 12 months before any resale;
[para 3]
AND WHEREAS the Commission considers that to do so would not be prejudicial to the public interest;
[para 4]
IT IS ORDERED:
1. under sections 48 and 76 of the Act, that any exchange of Share Equivalents for common shares of VM International is exempt from the registration and prospectus requirements of sections 34(1)(a) and 61 of the Act;
2. under section 76 of the Act, that any trade in common shares of VM International acquired on exchange of Share Equivalents is deemed to be a distribution unless:
(a) VM International is a reporting issuer;
(b) a 12 month period has elapsed since the date the Share Equivalents were originally distributed;
(c) if the seller is an insider of VM International, other than a director or senior officer, the seller has filed all records required to be filed under sections 87 and 90 of the Act;
(d) if the seller is a director or senior officer of VM International, the seller has filed all records required to be filed under sections 87 and 90 of the Act and VM International has filed all records required under Part 12 of the Act and the Rules;
(e) the trade is not a distribution from the holdings of a control person;
(f) no unusual effort has been made to prepare the market or create a demand for the security; and
(g) no extraordinary commission or other consideration is paid in respect of the security; and
3. under section 76 of the Act, that any trade in Securities is exempt from the prospectus requirements of section 61 of the Act, provided that:
(a) VM International is a reporting issuer;
(b) a 12 month period has elapsed since the earlier of the date the security was originally distributed or, in the case of an exchanged security, the date the primary security was originally distributed;
(c) if the seller is an insider of VM International, other than a director or senior officer, the seller has filed all records required to be filed under sections 87 and 90 of the Act;
(d) if the seller is a director or senior officer of VM International, the seller has filed all records required to be filed under sections 87 and 90 of the Act and VM International has filed all records required under Part 12 of the Act and the Rules;
(e) the trade is not a distribution from the holdings of a control person;
(f) no unusual effort has been made to prepare the market or create a demand for the security; and
(g) no extraordinary commission or other consideration is paid in respect of the security.
[para 5]
DATED August 22, 2001.
Brent W. Aitken
Member