Exemption Orders (Discretionary)
PASON SYSTEMS INC.
2001 BCSECCOM 156
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Waiver granted from section 4.1(1)(c) of National Policy Statement 47 (“NP 47”) to enable the issuer to participate in the POP System when it did not meet the public float test in the last calendar month of its most recent financial year end, subject to certain conditions including that it meets the public float test on a date within 60 days before the filing of its preliminary short form prospectus.
Applicable British Columbia Provisions
National Policy Statement No. 47, ss. 4.1(1)(c), 4.5.
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, ONTARIO AND QUÉBEC
AND
IN THE MATTER OF THE MUTUAL RELANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF PASON SYSTEMS INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta, Ontario and Québec (the “Jurisdictions”) has received an application from Pason Systems Inc. (the “Filer”) for a decision under the securities legislation and policies of the Jurisdictions (the “Legislation”) that the provisions of section 4.1(2)(b) of National Policy Statement No. 47 ("NPS 47") and the corresponding provisions of the securities legislation of Québec (together, the “Market Capitalization Requirement”) be waived to permit the Filer to participate in the prompt offering qualification system (the “POP System”);
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the “System”) the Alberta Securities Commission is the principal regulator for this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. The Filer is a public company amalgamated under the Business Corporations Act (Alberta) on November 1, 1996. The amalgamation was part of an overall transaction which occurred on October 31, 1996 whereby Mark 8 Ventures Inc. (“Mark 8”) pursuant to an acquisition agreement among Pason Systems Corp., all of its shareholders and Mark 8, acquired all of the outstanding shares of Pason Systems Corp. on the basis of 38,843 common shares of Mark 8 for each Class A common share of Pason Systems Corp. A total of 10,176,860 common shares of Mark 8 were issued to the shareholders of Pason Systems Corp. in connection with such acquisition. Following this acquisition, Mark 8 amalgamated with 693867 Alberta Ltd. a wholly owned subsidiary of Mark 8 to form the Filer. Prior to November 1, 1996 the Filer (or Mark 8) had no significant assets and was inactive. The reverse takeover, which occurred on this date, represented a transition in the business of Mark 8 from an Alberta junior capital company to an oilfield service company specializing in drilling instrumentation systems.
2. The head office of the Filer is in the City of Calgary, in the Province of Alberta.
3. The Filer has been a reporting issuer in each of British Columbia, Alberta, Ontario and Québec for more than 12 months and is not in default under any requirements of the Legislation.
4. The Filer’s financial year end is December 31st.
5. As of December 24, 1997, the Filer began trading on the Toronto Stock Exchange (“TSE”).
6. The authorized capital of the Filer consists of an unlimited number of common shares and an unlimited number of preferred shares issuable in series. As of April 14, 2000, the Filer had 16,519,378 common shares issued and outstanding with no preferred shares of any series issued and outstanding.
7. For the purpose of calculating the aggregate market value of the common shares of the Filer, the 5,316,620 shares indirectly owned by James D. Hill and held by J.D. Hill Investments Ltd., a private Alberta corporation, wholly owned by Mr. Hill and his spouse, must be excluded. The only other person or corporation owing directly or indirectly or exercising control or direction over more than 10% of the voting rights attached to the outstanding common shares of the Filer are those 1,915,600 shares which as of April 14, 2000 were owned by R. Chaney and Partners LP of Houston, Texas. R. Chaney and Partners LP is not an affiliate of the Filer. The shares held by R. Chaney and Partners LP are also excluded.
8. The aggregate market value of the Filer’s common shares as at December 31, 1999, as defined and calculated in accordance with NPS 47 and the applicable securities legislation of Québec did not exceed $75,000,000.
9. As at June 29, 2000, the aggregate market value of the Filer’s common shares, as defined and calculated in accordance with NPS 47 and the applicable securities legislation of Québec, was $81,726,990.40.
10. The Filer would be eligible to participate in the POP System if the market value of its Equity Securities were calculated as at June 29, 2000.
11. The Filer proposes to file an initial annual information form pursuant to the provisions of NPS 47and the applicable securities legislation of Québec in respect of its fiscal year ended on December 31, 1999.
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);
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;
The Decision of the Decision Makers under the Legislation is that the Market Capitalization Requirement be waived to permit the Filer to participate in the prompt offering qualification system provided that:
1. the Filer complies in all other respects with the eligibility requirements of the POP System;
2. the aggregated market value of the Equity Securities of the Filer, calculated in accordance with the POP System, is $75,000,000 or more on a date within sixty (60) days prior to the date of filing a preliminary short form prospectus;
3. the eligibility certificate required to be filed in connection with the Filer’s initial annual information form shall provide that the Filer satisfies the Market Capitalization Requirement in accordance with this Decision; and
4. this decision shall terminate on the earlier of:
(I) 140 days after the end of the Filer’s financial year ended December 31, 2000; and
(ii) the date of the filing of a renewal annual information form in respect of the Filer’s financial year ended December 31, 2000.
5. the Filer shall be exempt in Québec from providing the additional disclosure required by Schedule IX.1 of the regulation in its initial annual information form and Part B of Schedule IV of the regulation in the Filer’s short form prospectus.
DATED at Edmonton, Alberta this 18th day of July, 2000.
Agnes Lau
Deputy Director, Capital Markets