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 PLANET 13 HOLDINGS INC. (the Filer)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption from the requirement to file the Applicable Restated Interim Financial Reports (as defined herein) on or before the deadline set out in paragraph 4.2(b) of National Instrument 51-102 - Continuous Disclosure Obligations (NI 51-102) and in accordance with paragraph 4.3(4)(d) of NI 51-102, provided that the Filer files the Applicable Restated Interim Financial Reports and related MD&A on or before the earlier of (i) 45 days from the date the Filer files its Annual Financial Statements (as defined herein) and (ii) May 16, 2022 (the Exemption Sought).
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 British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.
Interpretation
Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 51-102 have the same meanings if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filler:
The Filer is a corporation existing under the Business Corporations Act (British Columbia). The registered office of the Filer is located at 10th floor, 595 Howe St., Vancouver, British Columbia, V6C 2T5 and the head office of the Filer is located at 2548 West Desert Inn Road, Suite 100, Las Vegas, Nevada 89109.
The common shares of the Filer (the Common Shares) are listed and posted for trading on the CSE under the trading symbol “PLTH”.
The Filer is a reporting issuer in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.
The Filer is subject to reporting obligations under the 1934 Act, and files continuous disclosure documents with the SEC.
As part of the Filer’s obligations under the 1934 Act, the Filer was required by the SEC, at the end of every second fiscal quarter, to test whether it continued to qualify as a foreign private issuer as defined in Rule 405 of Regulation C under the 1933 Act and Rule 3b-4 under the 1934 Act.
As of June 30, 2021, the Filer determined that it no longer met the criteria for qualification as a foreign private issuer because (a) more than 50% of the outstanding Common Shares of the Filer were held by residents of the United States, and (b) the majority of the Filer’s directors are resident in the United States.
The Filer’s financial year end is December 31.
Effective January 1, 2022, the Filer is subject to the reporting requirements applicable to U.S. domestic registrants.
In accordance with Section 6120.4 of the SEC's Division of Corporation Finance Financial Reporting Manual, as of January 1, 2022, the Filer is required, to prepare its annual financial statements in accordance with U.S. GAAP.
Pursuant to subsection 4.3(4) of NI 51-102, the Filer is required to file restated interim financial reports prepared in accordance with U.S. GAAP for the interim periods since its most recently completed financial year for which annual financial statements have been filed (the Restated Interim Financial Reports) on or before the deadline for the Filer to file its audited annual financial statements for the year ended December 31, 2021 (the Annual Financial Statements). Pursuant to set paragraph 4.2(b) of NI 51-102, the deadline for the Filer to file the Annual Financial Statements is the earlier of (i) May 2, 2022, being the 120th day after the end of its most recently completed financial year, and (ii) the date of filing, in a foreign jurisdiction, the Annual Financial Statements.
The Filer is expected to file its annual report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”) on or about March 28, 2022 in accordance with the requirements of the SEC, and concurrent therewith to file the Restated Interim Financial Report for September 30, 2021.
The COVID-19 pandemic has continued to result in recent staffing shortages and unanticipated employee departures critical to the Filer’s financial reporting function, and the Filer’s Chief Financial Officer’s recent recovery from surgery on December 23, 2021, have combined to result in unanticipated delays in the Filer’s work plan related to preparing the Restated Interim Financial Reports for March 31, 2021 and June 30, 2021 (the Applicable Restated Interim Financial Reports) in accordance with U.S. GAAP.
The Filer is not in default of securities legislation in any jurisdiction of Canada.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, subject to all of the following conditions:
(a) on or before the earlier of (i) 45 days from the date the Filer files its Annual Financial Statements and (ii) May 16, 2022, the Filer files the Applicable Restated Interim Financial Reports and related MD&A, for the first two interim periods since December 31, 2020;
(b) the Filer issues and files on SEDAR, as soon as reasonably practicable, and in any event, no later than the date the Filer files its Annual Financial Statements, a news release that discloses:
a. it is relying on this exemption;
b. that its management and other insiders are subject to an insider trading black-out policy that reflects the principles in section 9 of National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions; and
c. the anticipated date by which the Applicable Restated Interim Financial Reports and related MD&A are expected to be filed; and
(c) the Filer does not file a preliminary prospectus or a final prospectus for an offering of securities until it has filed all documents for which it is relying on this exemption.
DATED at Toronto, Ontario this 28th day of March 2022
‘Lina Creta’
Lina Creta
Manager, Corporate Finance
Ontario Securities Commission