In the Matter of MPX Bioceutical ULC, 2019 CanLII 17402

Ontario Securities Commission

Commission des valeurs mobilières de l’Ontario

22^nd Floor 20 Queen Street West Toronto ON M5H 3S8

22e étage 20, rue queen oust Toronto ON M5H 3S8

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 MPX BIOCEUTICAL ULC (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 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 and Alberta.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 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:

1. The Filer’s amalgamation predecessor, MPX Bioceutical Corporation (“MPX”), was incorporated on April 2, 1974 pursuant to the Business Corporations Act (Ontario) and was continued into British Columbia from Ontario on January 15, 2019, for the purposes of completing the Arrangement (as defined below) under the Business Corporations Act (British Columbia).

2. The Filer’s head office is at Suite 2740, 22 Adelaide Street West, Toronto, Ontario M5H 4E3.

3. On February 5, 2019 (the “Effective Date”), iAnthus Capital Holdings, Inc. (“iAnthus”) acquired all of the issued and outstanding common shares of MPX (“MPX Shares”), pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”), which became effective at approximately 6:00 p.m. (EST) (the “Effective Time”) on the Effective Date.

4. Pursuant to the Arrangement, MPX amalgamated with 1183271 B.C. Unlimited Liability Company, a wholly-owned subsidiary of iAnthus, to form the Filer, which, pursuant to applicable securities legislation, inherited the reporting issuer status of MPX. The Filer is a reporting issuer in British Columbia, Alberta and Ontario.

5. Pursuant to the Arrangement, at the Effective Time, common shares (“SpinCo Shares”) of MPX International Corporation (“MPX International”) were distributed to holders of MPX Shares on a return of share capital pursuant to a reorganization of MPX’s business and a distribution of proceeds from a disposition of MPX’s property outside the ordinary course of MPX’s business.

6. iAnthus is a corporation existing under the Business Corporations Act (British Columbia). iAnthus is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. The common shares of iAnthus (the “iAnthus Shares”) are listed on the Canadian Securities Exchange (the “CSE”) under the trading symbol “IAN” and the OTCQX Best Market (the “OTCQX”) under the trading symbol “ITHUF”.

7. MPX International is a corporation existing under the Business Corporations Act (Ontario). As of the date hereof, MPX International is not a reporting issuer; however, MPX International has received conditional approval to list the SpinCo Shares on the CSE and upon listing will become a reporting issuer in British Columbia, Alberta and Ontario.

8. Immediately prior to the Effective Time, MPX had the following issued and outstanding securities: (i) 453,049,662 MPX Shares; (ii) 60,934,689 common share purchase warrants of the MPX (the “MPX Warrants”), convertible into 60,934,689 MPX Shares; (iii) options to purchase 24,333,262 MPX Shares (the “MPX Options”); (iv) CDN$110,277.75 principal amount of convertible debentures (the “MPX Convertible Debentures”), convertible into 315,079 MPX Shares and 315,079 MPX Warrants; and (v) a US$10,000,000 principal amount convertible loan (the “MPX Convertible Loan” and, collectively with the MPX Shares, the MPX Warrants, the MPX Options and MPX Convertible Debentures, the “MPX Securities”), convertible into 29,872,810 MPX Shares.

9. In addition, immediately prior to the Effective Time, MPX was party to: (i) a debenture indenture, as amended by a first supplemental debenture indenture (as so amended, the “Debenture Indenture”) providing for the issuance of up to an aggregate principal amount of US$49,257,572.60 of senior secured convertible debentures (the “LuxCo Debentures”) of MPX Luxembourg, SARL (“MPX LuxCo”), MPX’s wholly-owned subsidiary, which were convertible into MPX Shares and MPX Warrants; and (ii) a warrant indenture, as amended by a first supplemental warrant indenture (as so amended, the “Warrant Indenture”), providing for the issuance of up to 35,000,000 MPX Warrants in connection with the conversion of such Debentures.

10. Neither MPX nor the Filer, as its successor issuer, is required, pursuant to the terms of the Debenture Indenture and the Warrant Indenture, to remain a reporting issuer upon completion of a transaction such as the Arrangement. The terms of the Debenture Indenture and the Warrant Indenture contain provisions addressing a corporate merger, amalgamation, arrangement, or business combination, including the Arrangement, and provides for the payment of iAnthus Shares and warrants to purchase iAnthus Shares (“iAnthus Warrants”) in lieu of MPX Shares and MPX Warrants subsequent to such an event. As a result, no additional consents or approvals are required from the holders of LuxCo Debentures.

11. The MPX Shares were listed on the CSE under the symbol “MPX” and the OTCQX under the symbol “MPXEF”. No other MPX Securities were listed on any exchange.

12. To the best of the Filer’s knowledge and belief and based on the registers of holders of MPX Warrants maintained by MPX as of January 30, 2019, the register of holders of MPX Convertible Debentures maintained by MPX immediately prior to the Effective Date and a geographic distribution report obtained in respect of non-registered holders of MPX Warrants, there are 139 holders of MPX Warrants, 24 of which are in Ontario (8.6% of the total aggregate MPX Warrants), 2 of which are in British Columbia (representing 0.09% of the total aggregate MPX Warrants), 1 of which is in Saskatchewan (representing 2.4% of the total aggregate MPX Warrants), 1 of which is in Manitoba (representing 0.05% of the total aggregate MPX Warrants), 1 of which is in Quebec (representing 0.1% of the total aggregate MPX Warrants), 25 of which are in the United States representing 38.9% of the total aggregate MPX Warrants), and 85 of which are in other foreign jurisdictions (representing 49.8% of the total aggregate MPX Warrants).

13. To the best of the Filer’s knowledge and belief and based on the register of holders of LuxCo Debentures maintained by the trustee under the Debenture Indenture, there are 27 holders of LuxCo Debentures, 2 of which are in Ontario (representing 4.0% of the total aggregate outstanding amount of LuxCo Debentures), 1 of which is in the United States (representing 40.5% of the total aggregate outstanding amount of LuxCo Debentures), and 24 of which are in other foreign jurisdictions (representing 55.5% of the total aggregate outstanding amount of LuxCo Debentures).

14. MPX distributed the meeting materials, which included the information circular and notice of meeting, to the holders of the MPX Shares (including the holder of the MPX Convertible Loan, as a holder of MPX Shares), MPX Options, MPX Warrants and MPX Convertible Debentures in connection with the special meeting of holders of MPX Securities that took place on January 15, 2019 to consider the Arrangement.

15. Pursuant to the Arrangement, among other things, the following occurred as of the Effective Time:

(a) The outstanding principal amount of MPX Convertible Debentures was converted into units comprised of MPX Shares and MPX Warrants at the applicable conversion price;

(b) The outstanding principal amount of the MPX Convertible Loan was converted into MPX Shares at the applicable conversion price;

(c) The SpinCo shares were distributed to holders of MPX Shares on a return or share capital pursuant to a reorganization of MPX’s business and a distribution of proceeds form a disposition of the Filer’s property outside the ordinary course of MPX’s business.

(d) Each MPX Share (including MPX Shares issued on conversion of the MPX Convertible Debentures and the MPX Convertible Loan) was exchanged for 0.1673 of an iAnthus Share;

(e) Each MPX Option was exchanged for a replacement option to purchase a MPX Share (a “MPX Replacement Option”) and an option to purchase a SpinCo Share (a “SpinCo Option”). All terms and conditions of a MPX Replacement Option and a SpinCo Option, including the term to expiry, conditions to and manner of exercising, were the same as the MPX Option for which they were exchanged. Each MPX Replacement Option was further exchanged for an option from iAnthus (an “iAnthus Replacement Option”) to acquire 0.1673 of an iAnthus Share. All terms and conditions of an iAnthus Replacement Option, including the term to expiry, conditions to and manner of exercising, were the same as the MPX Replacement Option for which it was exchanged; and

(f) iAnthus assumed all of the MPX Warrants (including the MPX warrants issuable on conversion of the MPX Convertible Debentures) and upon exercise of the MPX Warrants, the holders thereof shall be entitled to receive such number of iAnthus Shares and SpinCo Shares which the holder would have been entitled to receive if the holder had been a registered holder of MPX Shares at the time of the Arrangement.

16. In addition, at the Effective Time, iAnthus assumed all of the obligations of MPX under the Debenture Indenture and the Warrant Indenture pursuant to a second supplemental debenture indenture (the “Second Supplemental Debenture Indenture”) and a second supplemental warrant indenture the “Second Supplemental Warrant Indenture”), respectively. Accordingly, upon conversion of the LuxCo Debentures, the holders will be entitled to receive such number of iAnthus Shares and iAnthus Warrants which the holder would have been entitled to receive if the holder had been a registered holder of MPX Shares and MPX Warrants at the time of the Arrangement. Pursuant to the Arrangement Agreement, the Second Supplemental Debenture Indenture and the Second Supplemental Warrant Indenture, iAnthus is obligated to issue the number of iAnthus Shares and iAnthus Warrants required to meet MPX’s obligations upon conversion of the LuxCo Debentures.

17. In connection with the Arrangement, (i) iAnthus Shares are authorized for issuance upon exercise of MPX Warrants and (ii) iAnthus Shares and iAnthus Warrants are authorized for issuance upon conversion of the LuxCo Debentures.

18. The MPX Shares were delisted from (i) the CSE effective at the close of business on February 6, 2019 and (ii) the OTCQX effective at the close of business on February 7, 2019.

19. The Filer is not eligible to surrender its status as a reporting issuer pursuant to the simplified procedure in National Policy 11-206 Process for Cease to be a Reporting Issuer Applications because the MPX Warrants, including MPX Warrants issued on the conversion of the MPX Convertible Debentures, and the LuxCo Debentures are not beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.

20. Upon granting the Order Sought, the Filer will no longer be a reporting issuer or the equivalent in any jurisdiction in Canada.

21. iAnthus is not in default of securities legislation in any jurisdiction in which it is a reporting issuer.

22. Neither MPX nor the Filer is in default of securities legislation in any jurisdiction in which it was or is a reporting issuer, other than: (i) the obligation to file its interim financial statements for the interim period ended December 31, 2018 and associated management’s discussion and analysis, as well as certification of the foregoing filings, as the filing deadline for such financial statements, management’s discussion and analysis and certifications occurred on March 1, 2019.

23. The Filer has no intention to seek public financing by way of an offering of securities.

24. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.

25. No securities of MPX or 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.

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.

DATED at Toronto on this 8^th day of March, 2019.

“Lawrence P. Haber”

“Tim Moseley”

Commissioner Ontario Securities Commission

Vice-Chair Ontario Securities Commission