Ontario Commission des 22nd 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
TENET FINTECH GROUP INC. PARTIAL REVOCATION ORDER
Under the securities legislation of Ontario (the Legislation)
Background
Tenet Fintech Group Inc. (the Issuer) is subject to a failure-to-file cease trade order (the FFCTO) issued by the Ontario Securities Commission (the Principal Regulator) on May 7, 2025.
The Issuer has applied to the Principal Regulator for a partial revocation order (the Partial Revocation Order) of the FFCTO.
Interpretation
- Terms defined in National Instrument 14-101 Definitions or in National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions (NP 11-207) have the same meaning if used in this order, unless otherwise defined.
Representations
- This decision is based on the following facts represented by the Issuer:
a. The Issuer is a corporation governed by the Canada Business Corporations Act with its head office located at Suite 305, 82 Richmond Street East, Toronto, Ontario M5C 1P1.
b. The Issuer is a reporting issuer in each of the Provinces of Ontario, Alberta, British Columbia and Québec (collectively, the Reporting Jurisdictions). The Issuer is not a reporting issuer under the securities legislation of any other jurisdiction in Canada.
c. The Issuer is a development stage company, that serves as the parent company to a group of innovative financial technology (Fintech) and artificial intelligence (AI) companies. The Issuer’s subsidiaries offer various analytics and AI-based products and services to businesses, capital markets professionals, government agencies, and financial institutions.
d. The Issuer’s authorized share capital consists of an unlimited number of common shares without par value (the Common Shares). As at the date hereof, there are 325,140,867 Common Shares issued and outstanding. As at the date hereof, the Issuer also has: 167,552,240 Common Share purchase warrants outstanding; 1,948,791 stock options issued under its incentive plans outstanding; 8,498 units of unsecured convertible debenture (the Convertible Debenture), each unit comprised of $1,000 face value Convertible Debenture bearing interest at a nominal rate of 10% per annum and 50 units of unsecured convertible debenture, each unit comprised of $10,000 face value Convertible Debenture bearing interest at a nominal rate of 10% per annum exercisable up to a total of 30,898,667 Common Share equivalents; and a short-term loan of $300,000 maturing on May 14, 2026 with an approximately 10% annual interest rate. The Issuer has no other outstanding securities (including debt securities).
e. The Common Shares are listed for trading on the Canadian Securities Exchange (the CSE) under the ticker symbol “PKK”, and are also quoted for trading on the OTC Pink Limited Market in the United States under the symbol “PKKFF”. The securities of the Issuer are not listed or quoted on any other exchange or marketplace in Canada or elsewhere.
f. In connection with the FFCTO, trading in the Common Shares on the CSE was suspended effective as of May 8, 2025, and remains suspended as of the date hereof.
g. The Issuer filed an application with the Principal Regulator for an order (the Full Revocation Order) fully revoking the FFCTO on October 6, 2025. However, through further correspondence with the staff of the Principal Regulator, it was indicated that as the Principal Regulator is in the process of conducting a review of the Issuer’s continuous disclosure record in accordance with NP 11-207 (the Continuous Disclosure Review), the timeline for the granting of the Full Revocation Order is unknown. Therefore, while the Principal Regulator conducts the Continuous Disclosure Review, the Issuer applied to the Principal Regulator for the Partial Revocation Order to raise necessary short-term funds.
h. The FFCTO was issued as a result of the Issuer’s failure to file the following continuous disclosure documents as required by applicable Canadian securities laws: (i) audited annual financial statements for the year ended December 31, 2024 (the 2024 Financial Statements), (ii) management’s discussion and analysis relating to the 2024 Financial Statements for the year ended December 31, 2024 (the 2024 MD&A), and (iii) certification of the 2024 Financial Statements and the 2024 MD&A, as required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109) (collectively, the Unfiled Documents).
i. The Unfiled Documents and the Subsequent Unfiled Documents (as defined below) were not filed in a timely manner as a result of unanticipated delays and financial difficulties, including unanticipated fees and expenses. Over the last approximately 27 months, prior to the FFCTO, the Issuer has relied upon debt and equity financings to fund its expenditures.
j. Subsequent to the failure to file the Unfiled Documents, the Issuer also failed to file the following continuous disclosure documents as required by applicable Canadian securities laws (collectively, the Subsequent Unfiled Documents):
(i) interim financial statements for the period ended March 31, 2025 (the Q1 2025 Financial Statements);
(ii) management’s discussion and analysis for the period ended March 31, 2025 (the Q1 2025 MD&A);
(iii) certification of the Q1 2025 Financial Statements and the Q1 2025 MD&A, as required by NI 52-109;
(iv) interim financial statements for the period ended June 30, 2025 (the Q2 2025 Financial Statements);
(v) management’s discussion and analysis for the period ended June 30, 2025 (the Q2 2025 MD&A);
(vi) certification of the Q2 2025 Financial Statements and the Q2 2025 MD&A, as required by NI 52-109; and
(vii) statement of executive compensation for the year ended December 31, 2024, as required by National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102).
k. Subsequent to the issuance of the FFCTO, the Issuer filed the following continuous disclosure documents as required by applicable Canadian securities laws (collectively, the Filed Documents):
(i) the Unfiled Documents on October 1, 2025;
(ii) the Subsequent Unfiled Documents on October 6, 2025;
(iii) management information circular of the Issuer dated October 6, 2025 relating to the annual and special meeting of shareholders of the Issuer held on November 6, 2025 and related meeting materials, filed October 6, 2025;
(iv) interim financial statements for the period ended September 30, 2025, filed November 28, 2025 (the Q3 2025 Financial Statements);
(v) management’s discussion and analysis for the period ended September 30, 2025, filed November 28, 2025 (the Q3 2025 MD&A); and
(vi) certification of the Q3 2025 Financial Statements and the Q3 2025 MD&A, as required by NI 52-109, filed November 28, 2025.
l. During the Continuous Disclosure Review, the Principal Regulator has raised comments with respect to the Filed Documents which are not resolved, including comments related to the presentation and disclosure of credit risks associated with the Issuer’s loan portfolio in China, the recognition and measurement of expected credit losses on prepayments made to third party subcontractors, disclosures over related party relationships and transactions, and how the Issuer asserts control over its Chinese operations through nominee or contractual arrangements (along with the associated required disclosure).
m. As part of the Continuous Disclosure Review, staff of the Principal Regulator have questioned whether there are material risks that the Issuer has not disclosed in the Filed Documents related to the Issuer’s operations in China. For example, staff of the Principal Regulator have noted that:
(i) the Issuer did not provide sufficient disclosure regarding the credit risks associated with its loan portfolio in China, including the nature of the relationship between the Issuer and the loan guarantor, Jiu Dong Limited (Jiu Dong);
(ii) the Issuer did not disclose the extent to which its credit risk assessments are dependent on guarantees provided by Jiu Dong in respect of the loan portfolio;
(iii) the Issuer did not disclose risks relating to the corporate structure through which it exercises control over its principal operating subsidiary that owns the loan portfolio as the Issuer’s control is exercised using contractual arrangements (although the Issuer discloses that it exercises control over 51% of this subsidiary, all of the subsidiary’s shares are legally held in the name of Jiu Dong and certain related individuals or entities); and
(iv) the Issuer is exposed to undisclosed risks associated with the enforceability and ongoing effectiveness of these contractual arrangements, including the risk that a breach, dispute, or non‑compliance could impair the Issuer’s ability to maintain effective control over the subsidiary.
n. A significant number of deficiencies and material misstatements have been identified during the Continuous Disclosure Review, including material misstatements in the 2024 Financial Statements, the 2024 MD&A, the Q1 2025 Financial Statements, the Q1 2025 MD&A, the Q2 2025 Financial Statements, the Q2 2025 MD&A, the Q3 2025 Financial Statements and the Q3 2025 MD&A. The Issuer expects to file amended and/or restated versions of these documents (collectively, the Amended Filed Documents) at the conclusion of the Continuous Disclosure Review to address the identified deficiencies and misstatements, including restatements relating to the presentation and disclosure of credit risks associated with the Issuer’s loan portfolio，disclosure of certain related party transactions, and risks associated with the nominee shareholder agreement.
o. The Issuer failed to file the following continuous disclosure documents by April 30, 2026 as required by applicable Canadian securities laws: (i) audited annual financial statements for the year ended December 31, 2025 (the 2025 Financial Statements), (ii) management’s discussion and analysis relating to the 2025 Financial Statements for the year ended December 31, 2024 (the 2025 MD&A), and (iii) certification of the 2025 Financial Statements and the 2025 MD&A, as required by NI 52-109.
p. Except as described in paragraphs (m), (n) and (o) and the possible contravention of the FFCTO described in paragraph (r) below, the Issuer is not in default of any of the requirements under the applicable securities legislation and is not in default of any of the requirements of the FFCTO. The Issuer’s SEDAR+ and SEDI profiles are up to date and accurate.
q. In addition to filing the Amended Filed Documents, the Issuer needs or anticipates that it will need to file the following continuous disclosure documents as required by applicable Canadian securities laws, as the Principal Regulator conducts its Continuous Disclosure Review (collectively, the Ongoing Disclosure Requirements):
(i) the 2025 Financial Statements;
(ii) the 2025 MD&A;
(iii) certification of the 2025 Financial Statements and the 2025 MD&A as required by NI 52-109;
(iv) interim financial statements for the period ended March 31, 2026 (the Q1 2026 Financial Statements);
(v) management’s discussion and analysis for the period ended March 31, 2026 (the Q1 2026 MD&A);
(vi) certification of the Q1 2026 Financial Statements and the Q1 2026 MD&A as required by NI 52-109; and
(vii) management information circular of the Issuer relating to the 2026 annual meeting of shareholders of the Issuer and related meeting materials.
r. The Issuer entered into a loan agreement with an arm’s length investor while the FFCTO was in effect (the Loan Agreement). While the Issuer did not consider the Loan Agreement to be a “security” (as such term is defined under applicable securities legislation) at the time it was entered into, in light of the broad statutory definition of security, which includes “evidence of indebtedness”, and relevant jurisprudence interpreting such term, the Loan Agreement may, in the circumstances, be a security. Insofar as the Loan Agreement may have been a security, entering into the Loan Agreement may have contravened the terms of the FFCTO. However, no other securities of the Issuer were issued after the date of the FFCTO and the Issuer did not enter into any agreements contemplating the issuance of other securities after the date of the FFCTO.
s. As the Issuer is a development stage company, it depends on being able to raise funds through the capital markets in order to operate and execute its business plan. Since the Issuer is not currently authorized to raise funds through the capital markets, as a result of the FFCTO remaining in place, the Issuer is facing financial difficulties.
t. In order to raise necessary short-term funds, the Issuer is seeking this Partial Revocation Order to conduct a non-brokered private placement offering of up to 55.2M Common Shares at a price of CAD $0.05 per Common Share for gross aggregate proceeds of up to CAD $2.76M (the Private Placement).
u. The Common Shares under the Private Placement will be offered and sold in the Reporting Jurisdictions and China on a prospectus exempt basis and each distribution made in respect of the Private Placement will be to certain existing securityholders of the Issuer who qualify for the “accredited investor” exemption in accordance with Section 73.3 of the Securities Act (Ontario) or Section 2.3 of National Instrument 45-106 Prospectus Exemptions (the Subscribers), pursuant to the terms of subscription agreements to be entered into between the Issuer and the Subscribers to the Private Placement.
v. There will be no marketing of the Common Shares to be offered in the Private Placement and the Issuer will not use finders to identify Subscribers. All the potential Subscribers have long existing relationships with the Issuer and had reached out to the Issuer about participating in a financing prior to the announcement of the Private Placement. The Issuer expects that there will be up to 11 Subscribers.
w. All the funds raised in the Private Placement will be paid to the Issuer in Canada, including funds to be raised from Subscribers who reside in China. Any Subscribers residing in China will have the responsibility of sending funds by wire transfer directly to the Issuer’s Canadian bank account. The Issuer will therefore not be involved in any fund transfer process between China and Canada.
x. The Issuer anticipates that the Private Placement will be completed shortly after the Partial Revocation Order is granted.
y. The Private Placement will be completed in accordance with all applicable laws.
z. The Issuer confirms that it is not currently involved in any discussions relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.
aa. The Issuer confirms that that no related parties would be participating in the Private Placement.
bb. As of the date hereof, the cash on hand available to the Issuer is not enough to cover basic operating expenses, which could have a material and adverse impact on the Issuer’s business and its ability to continue as a going concern. The Issuer intends to use the proceeds of the Private Placement for short-term necessary working capital and funding of expenses as follows:
Description
Expected Cost
Professional fees – Accounting and Tax fees - Audit 2025
$830,000
Professional fees – RCGT – OSC support and restatement
$150,000
Professional fees – Litigation Legal Fees – U.S. Class Action
$102,000
Professional fees – Regulatory Legal Fees – OSC Revocation Process
$188,000
Professional fees – Dentons and Norton Rose – Payment Installments
$177,481
Salaries and benefits
$896,000
Insurance
$255,000
Office rent (3 offices)
$139,716
Securities regulators in Canada - OSC fees
$19,628
Securities regulators in Canada - BC fees
$1,654
CSE fees
$5,000
TOTAL
$2,764,479
cc. The Issuer intends to use a portion of the Private Placement proceeds to fund the audit of its annual financial statements for the year ended December 31, 2025. Accordingly, completion of the 2025 audit is contingent on the Issuer raising sufficient funds pursuant to the Private Placement. As a result, there is uncertainty as to whether, and when, the Issuer will be able to file its required annual filings for 2025. If the Issuer is unable to complete the 2025 audit and file the related annual filings, it does not expect to be able to obtain a Full Revocation Order.
dd. While the Issuer’s subsidiaries in China are currently generating revenue, such funds cannot be transferred to Canada to cover the Issuer’s immediate, short-term necessary financial obligations and expenses due to China’s strict foreign exchange controls and the regulatory requirements governing profit repatriation. While there are legal mechanisms to move funds out of China, these processes involve mandatory prerequisites, compliance procedures, and timing constraints that prevent rapid or on-demand transfers.
ee. As the timeline for the completion of the Continuous Disclosure Review and the granting of the Full Revocation Order are unknown, the proceeds of the Private Placement may not represent sufficient resources to permit the Issuer to prepare and file the Ongoing Disclosure Requirements and the Amended Filed Documents, and maintain its operations.
ff. As the Private Placement will involve trades in securities of the Issuer, the Issuer seeks the Partial Revocation Order.
gg. Other than the Private Placement, no further trading in securities of the Issuer will be made by the Issuer unless further relief from the FFCTO is sought by the Issuer.
hh. The Issuer does not have any revocation applications relating to the FFCTO currently in progress in other jurisdictions.
ii. Prior to the completion of the Private Placement, the Issuer will obtain, and provide upon request to the Principal Regulator, signed and dated acknowledgements from all of the Subscribers, which clearly state that the securities of the Issuer acquired by the Subscriber will remain subject to the FFCTO until the Full Revocation Order is granted, the issuance of which is not certain. The Subscribers will also acknowledge that they did not directly or indirectly sell Common Shares on the OTC Pink Limited Market in the United States within the last sixty days to finance a purchase of Common Shares under the Private Placement.
jj. Prior to a Subscriber entering into a subscription agreement, the Issuer will provide the Subscriber a copy of the FFCTO and of this Partial Revocation Order for their review.
kk. Upon issuance of the Partial Revocation Order, the Issuer will issue and file a press release announcing the Partial Revocation Order and its intention to complete the Private Placement. Upon completion of the Private Placement, the Issuer will issue and file a press release and a material change report to disclose such completion. As other material events transpire, the Issuer will issue and file appropriate press releases and material change reports as applicable.
ll. Since the issuance of the FFCTO, there have not been any material changes in the business, operations or affairs of the Issuer that have not been disclosed to the public.
Order
The Principal Regulator is satisfied that a partial revocation order of the FFCTO 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 FFCTO is partially revoked solely to permit the trades in securities of the Issuer that are necessary for and are in connection with the Private Placement, provided that:
a. prior to a Subscriber entering into a subscription agreement, the Issuer will provide the Subscriber for their review:
(i) a copy of the FFCTO;
(ii) a copy of this partial revocation order;
b. prior to completion of the Private Placement, the Issuer will obtain from each Subscriber a signed and dated acknowledgement (an Acknowledgement), which clearly states that:
(i) all of the Issuer's securities, including the securities issued in connection with the Private Placement, will remain subject to the FFCTO until a full revocation order is granted and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future; and
(ii) the Subscriber did not directly or indirectly sell Common Shares on the OTC Pink Limited Market in the United States within the last sixty days in order to finance a purchase of Common Shares under the Private Placement;
c. the Issuer will make available a copy of the written Acknowledgements to staff of the Principal Regulator on request;
d. this partial revocation order only varies the FFCTO and does not provide an exemption from the prospectus requirement; and
e. this partial revocation order will terminate on the earlier of:
(i) the completion of the Private Placement, and
(ii) 60 days from the date hereof.
DATED at Toronto, Ontario on this 25th day of May 2026.
“David Surat”
David Surat
Associate Vice President, Corporate Finance
Ontario Securities Commission OSC File#: 2026-27