Cease Trade Orders

Rich Rock Resources Inc. [Revocation Order]

BCSECCOM #:
2011 BCSECCOM 448
Document Type:
Revocation Order
Published Date:
2011-10-03
Effective Date:
2011-10-03
Details:

2011 BCSECCOM 448

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2011 BCSECCOM 448




Revocation Order

Rich Rock Resources Inc.

Section 171 of the Securities Act, R.S.B.C. 1996, c. 418


¶ 1 On February 15, 2010, the Executive Director of the British Columbia Securities Commission (the BCSC) issued a Cease Trade Order (the CTO) against Rich Rock Resources Inc. (Rich Rock) under section 164 of the Securities Act,R.S.B.C. 1996, c. 418 (the Act), ordering that trading in the securities of Rich Rock cease until:

      1. Either:

          (a) Rich Rock files a preliminary prospectus and prospectus in the required form for the Distribution (defined below) and the Executive Director issues receipts for the preliminary prospectus and the prospectus, or

          (b) Rich Rock files a Form 45-106F1 Report of Exempt Distribution,if Rich Rock relied on exemptions from the prospectus and registration requirements of the Act for certain distributions that were available to it and require a Report of Exempt Distribution, and

      2. the Executive Director makes an order under section 171 of the Act revoking the CTO.

¶ 2 The Executive Director issued the CTO because:

      1. Between November 6, 2009 and February 15, 2010, Rich Rock distributed 3,947,000 common shares for gross proceeds of approximately $789,400 from the sale of securities to 111 investors in reliance on the exemptions from the prospectus and registration requirements of the Act in section 2.5 of National Instrument 45-106 Prospectus and Registration Exemptions,which requires that the investor be in a specified relationship (the required relationship).

      2. Rich Rock distributed common shares to at least 34 investors (the Distribution) who did not have the required relationship.

¶ 3 On December 3, 2010, the Executive Director made an order under section 171 of the Act partially revoking the CTO to permit Rich Rock to issue 100,000 common shares to satisfy the terms of a property option agreement to which Rich Rock is a party.

¶ 4 Rich Rock agreed to offer (the Rescission Offering) rescission rights to the shareholders (the Rescission Shareholders) who purchased the following Rich Rock common shares at a subscription price of $0.20 per common share (collectively, the Rescission Shares):

      (a) 2,224,500 common shares on November 6, 2009
      (b) 837,500 common shares on November 16, 2009
      (c) 325,000 common shares on November 18, 2009
      (d) 385,000 common shares on November 26, 2009
      (e) 50,000 common shares on November 30, 2009
      (f) 125,000 common shares on December 1, 2009
      (g) 25,000 common shares on December 2, 2009
      (h) 350,000 common shares on December 7, 2009
      (i) 250,000 common shares on December 9, 2009
      (j) 25,000 common shares on December 11, 2009
      (k) 125,000 common shares on December 15, 2009
      (l) 25,000 common shares on December 16, 2009
      (m) 143,000 common shares on January 11, 2010
      (n) 353,000 common shares on January 18, 2010
      (o) 670,000 common shares on January 20, 2010
      (p) 100,000 common shares on February 3, 2010

¶ 5 Rich Rock prepared an offering memorandum which incorporates the Rescission Offering (the Rescission OM), in the required form.

¶ 6 On August 25, 2011, the Executive Director made an order under 171 of the Act partially revoking the CTO to permit Rich Rock to permit Rich Rock to distribute the Rescission OM to the Rescission Shareholders and to carry out the Rescission Offering thereunder.

¶ 7 Rich Rock confirms that it:

      1. provided the Rescission Shareholders with a copy of:

          (a) the CTO, and

          (b) the Rescission OM,

      2. offered to the Rescission Shareholders the right to rescind the purchase of their Rescission Shares at a price per Rescission Share that is equal to the subscription price originally paid by the Rescission Shareholders for such Rescission Shares,

      3. concurrent with or prior to the commencement of the Rescission Offering,

          (a) filed with the BCSC the Rescission OM,

          (b) filed with the BCSC technical reports in the required form on the Tas Property and Eagle Property and to make these reports available to the Rescission Shareholders, and

          (c) took steps to mitigate the effect of certain tax charges that may be incurred by Rescission Shareholders who rescind the purchase of their Rescission Shares under the Rescission Offering.

¶ 8 Rich Rock has undertaken to file a report of exempt distribution on Form 45-106F1 with respect to the Rescission Shareholders with the BCSC within 10 days of the completion of the Rescission Offering.

¶ 9 The Executive Director considers that it would not be prejudicial to the public interest to revoke the CTO.

¶ 10 Under section 171 of the Act, the Executive Director orders that the CTO be revoked.


¶ 11 October 3, 2011





John Porges
Manager
Corporate Finance