Adeptron Technologies Corporation and Artaflex Inc. (Re)
Headnote National Policy 11-203 Process for Exemptive Relief applications in Multiple Jurisdictions – National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107) – original decision granted relief from requirement under paragraph 4.3(a) of NI 52-107 that audited annual financial statements of reverse takeover acquirer be required to be accompanied by an unmodified auditor’s report – auditor’s report qualified because records destroyed due to water leak at reverse takeover acquirer’s offices – Filer requests variation of original decision to extend time permitted to deliver information circular to its shareholders and to complete the transaction – relief granted subject to conditions
Applicable Legislative Provisions National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency, ss. 4.3(a) and 5.1(2).
January 25, 2012
In the Matter of the Securities Legislation of Ontario (the “Jurisdiction”)
and
in the Matter of the Process for Exemptive Relief Applications in Multiple Jurisdictions
and
in the Matter of Adeptron Technologies Corporation (the “Filer”)
and
Artaflex Inc. (the “Target Company”)
DECISION
Background
The principal regulator in the Jurisdiction (the “Decision Maker”) rendered a decision (the “Original Decision”) dated December 16, 2011, granting the Filer relief from:
(a) the requirement under Section 4.3(a) of National Instrument 52-107 - Acceptable Accounting Principles and Auditing Standards (“NI 52-107”) to have an unmodified auditor's opinion in respect of the annual financial statements for the Target Company for the (i) annual financial statements for the seven month period ended July 31, 2009 and (ii) the annual financial statements for the twelve month period ended December 31, 2008, being the third and fourth most recent completed financial years of the Target Company required to be included in the Filer’s management information circular (the “Information Circular”) for its shareholders meeting required to approve a proposed business combination between the Filer and the Target Company (the “Transaction”); and
(b) the requirement under subsection 4.2(1) of NI 52-107 for the Target Company financial statements for the financial periods ending July 31, 2010, and July 31, 2011, included in the Information Circular be prepared in accordance with Canadian GAAP – Part V.
Among other things, the Original Decision is subject to the following conditions (the “Old Conditions”):
(f) the Filer delivers the Information Circular to its shareholders by January 31, 2012; and
(g) the Filer and the Target Company complete the Transaction by February 29, 2012.
The Decision Maker has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the “Legislation”) requesting the Decision Maker vary the Original Decision by replacing the Old Conditions with the following new conditions (the “New Conditions”):
(f) the Filer delivers the Information Circular to its shareholders by February 29, 2012; and
(g) the Filer and the Target Company complete the Transaction by March 31, 2012.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in the Provinces of British Columbia, Alberta and Quebec.
Interpretation
Terms defined in National Instrument 14-101 - Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
The facts set out in paragraphs 1-20 under “Representations” of the Original Decision continue to apply, other than paragraph 5 relating to the timing of the delivery of the Information Circular to the Filer’s shareholders and the completion of the Transaction with the Target Company.
The Filer seeks to replace the Old Conditions with the New Conditions since the Information Circular will likely not be delivered to shareholders by January 31, 2012 and the Transaction will likely not be completed by February 29, 2012.
Reasons for the Filer’s inability to deliver the Information Circular and complete the Transaction by the required deadlines prescribed under the Original Decision, include:
(a) the rules of the TSX Venture Exchange (the “Exchange”) preclude the Filer from delivering the Information Circular to its shareholders without prior acceptance of the Exchange and the conditional approval of the Transaction by the Exchange;
(b) the review of the Information Circular by the Exchange as part of the above acceptance process has resulted in certain requests for additional information concerning the Filer and the Target Company; and
(c) the provision of such additional information by the Filer and the Target Company, particularly over the recent holiday season, has resulted in delay.
Decision
The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Maker under the Legislation is that the Original Decision is varied by replacing the Old Conditions with the New Conditions.
“Cameron McInnis”
Cameron McInnis
Chief Accountant
Ontario Securities Commission