Ontario Commission des 22^nd^ Floor 22e étage
Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest
Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
_____________________________________________________________________________________ January 17, 2017
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO (the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS
AND
IN THE MATTER OF
GUESTLOGIX INC.
(the Filer)
ORDER
Background
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission (the OSC) is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.
Interpretation
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
The Filer was incorporated under the Business Corporations Act (Ontario) on August 1, 2007.
The Filer’s head office and registered office is located at 111 Peter Street, Suite 302. Toronto, Ontario M5V 2H1.
The Filer is a reporting issuer in each of the Provinces of British Columbia, Alberta, Saskatchewan, Ontario, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland. The Filer is not a reporting issuer in any other jurisdiction in Canada.
On February 9, 2016, the Filer was granted protection from its creditors under the Companies’ Creditors Arrangement Act (Canada) (the CCAA) pursuant to an initial order (as amended and restated, the Initial Order) granted by the Ontario Superior Court of Justice (Commercial List) (the Court). PricewaterhouseCoopers Inc. was appointed as CCAA monitor of the Filer pursuant to the Initial Order. All proceedings against the Filer were stayed pursuant to the Initial Order, the purpose of which was to allow the Filer time to solicit and implement a Court approved CCAA plan of compromise and arrangement (the Plan).
On March 18, 2016, the Filer had its former common shares and 7% extendible convertible unsecured subordinated debentures delisted from trading on the Toronto Stock Exchange.
On June 30, 2016, the Filer entered into a transaction agreement with GXI Acquisition Corp. (the Sponsor) to conclude a process under the Plan that includes taking the Filer private.
On August 3, 2016, the Court granted a Meeting order, inter alia, accepting the Plan for filing and scheduling a meeting of the unsecured creditors of the Filer to consider and vote on the Plan (the Meeting).
On September 2, 2016 the Meeting was held and the unsecured creditors voted unanimously in favour of the Plan. The Filer obtained an order of the Court sanctioning and approving the Plan on September 12, 2016 (the Sanction Order).
The Filer completed the following trades, steps and actions in connection with the Plan:
a. the subscription by the Sponsor for newly created common shares in the capital of the Filer (the New Common Shares) for cash consideration and the issuance of the New Common Shares to the Sponsor in consideration of such payment under section 2.11(a) of National Instrument 45-106 Prospectus Exemptions;
b. the consolidation of the issued and outstanding common shares (including the New Common Shares) on the basis of a consolidation ratio pursuant to the Plan and the cancellation of any fractional common shares immediately following the consolidation without any liability, payment or other compensation or any other right in respect thereof (the Common Share Consolidation);
c. the compromise and extinguishment of all claims of the Filer’s unsecured creditors in exchange for a proportionate distribution of the remainder of the cash pool available under the Plan, calculated with reference to the amounts of their respective unsecured claims; and
d. the cancellation of all other securities of the Filer, other than the New Common Shares remaining after the Common Share Consolidation, for no consideration and without any vote or approval by the holders of such equity securities.
On September 21, 2016, upon implementation of the Plan in accordance with the Sanction Order, the Filer became a wholly-owned subsidiary of the Sponsor and the only outstanding securities of the Filer are held by the Sponsor. The Filer has no other outstanding securities (including debt securities).
Accordingly, the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 security holders in each of the jurisdictions in Canada and fewer than 51 security holders in total worldwide.
No securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
The Filer has no current intention to seek public financing by way of an offering of its securities in any jurisdiction in Canada.
The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
The Filer is not in default of any of its obligations as a reporting issuer, other than: (a) the obligation to file its annual information form, annual audited financial statements, management’s discussion and analysis and certification of annual filings for the year ended December 31, 2015 which were required to be filed on March 31, 2016; and (b) the obligation to file interim unaudited financial statements, interim management’s discussion and analysis and certification of interim filings for the interim periods ended March 31, 2016, June 30, 2016 and September 30, 2016 which were required to be filed on May 15, 2016, August 14, 2016 and November 14, 2016, respectively(collectively, the Filings), all of which became due after the Filer filed for CCAA protection.
The Filer is currently subject to a cease trade order dated April 5, 2016 issued by the OSC (the Ontario CTO) for failure to file its annual information form, audited annual financial statements, related management’s discussion and analysis and certifications for the year ended December 31, 2015 and a cease trade order dated April 21, 2016 issued by the Manitoba Securities Commission (the Manitoba CTO) for failure to file audited annual financial statements, related management’s discussion and analysis and certifications for the year ended December 31, 2015. On September 16, 2016 the Filer was granted a partial revocation of the Ontario CTO and the Manitoba CTO to effect the transactions contemplated by the Plan. The Ontario CTO and the Manitoba CTO will be fully revoked concurrently upon the granting of the Order Sought.
The Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications as it is in default for failure to file the Filings.
The Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer.
Upon the granting of the Order Sought, the Filer will not be a reporting issuer in any jurisdiction in Canada.
Order
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
“Deborah Leckman” “Judith Robertson”
Commissioner Commissioner
Ontario Securities Commission Ontario Securities Commission