Exemption Orders (Discretionary)
UNITY WIRELESS CORPORATION
2001 BCSECCOM 1179
COR#01/130
ORDER UNDER SECTION 76 OF THE SECURITIES ACT, R.S.B.C. 1996, c. 418
UNITY WIRELESS CORPORATION
Background
[para 1]
Unity applied for an exemption from the requirement to file and obtain receipts for a preliminary prospectus and prospectus in section 61 of the Act for certain intended trades of its common shares.
Representations
[para 2]
Unity represents that:
1. Unity is organized under the laws of Delaware and is not a reporting issuer anywhere in Canada;
2. through its subsidiaries, Unity designs, develops and manufactures radio frequency power amplifiers used in wireless communications networks; its executive offices, employees and assets are all primarily located in British Columbia and a majority of its directors and officers reside in British Columbia;
3. Unity’s authorized capital is 100,000,000 common shares and 5,000,000 preferred shares, of which 25,768,153 common shares and no preferred shares are outstanding; a further 4,863,250 common shares are reserved for issuance under outstanding stock options and warrants (Convertible Securities);
4. Unity’s common shares trade in the United States on the over-the-counter bulletin board, and it has applied to list the common shares on the Canadian Venture Exchange Inc. (CDNX);
5. once its common shares are listed on the CDNX, Unity will become a reporting issuer in British Columbia and Alberta;
6. Unity filed an initial registration statement on Form 10-SB with the United States Securities and Exchange Commission that became effective in April 2000; the Form 10-SB was a comprehensive disclosure document that contained prospectus-level disclosure about Unity and its operations; since then, Unity has filed continuous disclosure documents with the SEC on EDGAR, the contents of which are substantially the same as the continuous disclosure documents it will be required to file once it becomes a reporting issuer in British Columbia;
7. Unity is not in default of its reporting obligations under United States federal or state securities legislation;
8. Unity will file its Form 10-KSB (Annual Report) for its fiscal year ended December 31, 2000 with the Commission on SEDAR as an alternative form of annual information form and, when its listing on the CDNX becomes effective, it will issue a press release indicating that its historical continuous disclosure documents are available on EDGAR;
9. as of November 30, 2001, without accounting for 9,309,164 common shares registered in the names of securities depositories, there were approximately 755 British Columbia residents holding approximately 10,419,355 common shares, representing 40.55% of the total outstanding common shares; 2,696,090 common shares, or 10.46% of the outstanding common shares, are held by Unity’s directors and senior officers;
10. Unity has distributed common shares under registration and prospectus exemptions in the Act and the Securities Rules, B.C. Reg. 194/97; as a result, the following common shares (the Securities) are subject to resale restrictionsunder Multilateral Instrument 45-102 Resale of Securities that will not expire until 12 months after Unity becomes a reporting issuer:
(a) 17,729,696 outstanding common shares,
(b) 500,000 common shares issuable on the exercise of outstanding share purchase warrants, and
(c) 4,363,250 common shares issuable on the exercise of outstanding incentive stock options;
11. To become listed on the CDNX, Unity must have at least 500,000 common shares free of any trading restrictions and at least 300 public shareholders holding at least a board lot free of any trading restrictions; without this order, Unity may not meet these minimum listing requirements.
Order
[para 3]
Because it is not prejudicial to the public interest, the Commission orders under section 76 of the Act that any trade in Securities is exempt from the requirement of section 61 of the Act provided that:
1. Unity is a reporting issuer;
2. a 12 month period has elapsed since the date the Security was originally distributed, or, in the case of a Security issued on the exercise of a Convertible Security, since the date the Convertible Security was originally distributed;
3. the trade is not a control distribution;
4. no unusual effort is made to prepare the market or to create a demand for the securities that are the subject of the trade;
5. no extraordinary commission or consideration is paid to a person or company in respect of the trade; and
6. if the selling security holder is an insider or officer of Unity, the selling security holder has no reasonable grounds to believe that Unity is in default of securities legislation.
[para 4]
DATED December 18, 2001.
Joyce C. Maykut, Q.C.
Vice-Chair