Andrew Wilkinson
Headnote
Multilateral Instrument 11-102 Passport System and National Policy NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Securities Act, s. 76 -- Prospectus Requirements -- Exemption from the prospectus requirement (for distributions without a prospectus) -- A control person is unable to rely on the control person prospectus exemption in NI 45-102 Resale of Securities for trades made under an automatic securities disposition plan and is seeking relief from the prospectus requirement on terms that substantially replicate the control person exemption -- Control person intends to establish an automatic securities disposition plan which has the effect of ensuring that the control person cannot profit from material undisclosed information; control person cannot rely on s. 2.8 of NI 45-102; compliance with the requirements in s. 2.8 of NI 45-102 would impede control person's ability to effect orderly trades under the plan.
Securities Act, s. 169 -- Confidentiality -- An applicant wants to keep an application and order confidential for a limited amount of time after the order is granted. The record provides intimate financial, personal or other information; the disclosure of the information before a specific transaction would be detrimental to the person affected; the information will be made available after a specific date.
Applicable Legislative Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 61, 76 and 169.
Securities Act, R.S.O. 1990, c. S.5, as am. ss. 53, 74 and 140.
Citation: 2024 BCSECCOM 412
September 18, 2024
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA AND ONTARIO
(the Jurisdictions)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
N MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
ANDREW WILKINSON
(the Filer)
DECISION
Background
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application (the Application) from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the prospectus requirement under the Legislation in connection with the sale of Shares (as defined below) of Tiny Ltd. (the Issuer) by the Filer under the Filer ASDP (as defined below) (the Exemption Sought).
Furthermore, the Decision Makers have also received a request from the Filer for a decision that the Application, this decision and all supporting materials or other information submitted in connection with the Application remain confidential until the earlier of (i) the public disclosure by the Filer of the establishment of the Filer ASDP by way of news release and (ii) 90 days from the date of this decision (the Confidentiality Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application;
(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 Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador; and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Interpretation
¶ 2 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
¶ 3 This decision is based on the following facts represented by the Filer:
The Issuer
1. the Issuer is a corporation governed by the Canada Business Corporations Act;
2. the Issuer's head office is located in British Columbia;
3. the Issuer's authorized share capital consists of an unlimited number of Class A Common shares without par value (Shares);
4. as of September 11, 2024, 187,409,663 Shares were issued and outstanding;
5. the Shares are listed on the TSX Venture Exchange under the symbol TINY;
6. the Issuer is a reporting issuer in Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Québec, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador and is not in default of securities legislation in any jurisdiction;
The Filer
7. the Filer is the Chairman of the Board of Directors of the Issuer;
8. the Filer resides in British Columbia;
9. as of September 11, 2024, the Filer directly or indirectly owned, in the aggregate, 120,267,396 Shares, representing 64.18% of the Issuer's outstanding Shares;
10. the Filer is deemed to be a control person of the Issuer under the Legislation and the securities legislation of the other jurisdictions in which the Issuer is a reporting issuer;
11. the Filer is not in default of the securities legislation in any jurisdiction;
Automatic Securities Disposition Plan
12. the Filer intends to enter into an automatic securities disposition plan (the Filer ASDP) on or about September 18, 2024, which follows the date on which the Issuer has filed its interim financial statements for the quarter ended June 30, 2024 (the date on which the Filer enters into the Filer ASDP will be referred to as the Effective Date) in order to be able to make orderly sales of certain Filer's Shares;
13. the Filer ASDP will be established in accordance with applicable securities legislation and staff guidance, including Canadian Securities Administrators Staff Notice 55-317 Automatic Securities Disposition Plans (Staff Notice 55-317), including the following:
(a) at the time the Filer enters into the Filer ASDP, the Filer will not possess any knowledge of privileged information or of a material fact or material change with respect to the Issuer that has not been generally disclosed and the Filer ASDP will be entered into in accordance with the Issuer's insider trading policy;
(b) the Filer ASDP will be entered into in good faith and not as part of a plan or scheme to evade the prohibitions of securities legislation in any jurisdiction of Canada or any other applicable securities laws;
(c) the establishment of the Filer ASDP will be disclosed by way of a news release of all relevant information on the System for Electronic Document Analysis and Retrieval + (SEDAR+);
(d) the Filer ASDP will include provisions prohibiting the commencement of sales under the Filer ASDP until after the filing of the Issuer's interim financial report or annual financial statements which follows the Effective Date and is currently anticipated to be on or after November 15, 2024;
(e) the Filer ASDP will include clear written trading parameters and other instructions to the securities dealer appointed in connection with the Filer ASDP; such trading parameters and other instructions will either include a formula or specify the number of securities to be sold, and set out any minimum trade price, if any, and any date or frequency of sales;
(f) the Filer ASDP will provide for a term equal to the Sales Period (as defined below);
(g) the Filer ASDP will include meaningful restrictions on the ability of the Filer to amend, suspend or terminate the Filer ASDP;
(h) the Filer ASDP will include provisions prohibiting the securities dealer under the Filer ASDP from consulting with the Filer regarding any sales under the Filer ASDP and the Filer from disclosing information to the dealer concerning the Issuer that might influence the execution of the Filer ASDP;
(i) the Issuer will oversee the establishment and use of the Filer ASDP;
(j) the Filer will file an insider report on the System for Electronic Disclosure by Insiders (SEDI) evidencing the change in control of the Shares from the Filer to the securities dealer under the Filer ASDP as well as each time a trade is made under the Filer ASDP, specifying that such trade was made under the Filer ASDP;
(k) all sales of Shares will be conducted by the securities dealer under the Filer ASDP on behalf of the Filer, with no participation by or direction or advice from the Filer;
(l) the total number of Shares sold in the Sales Period (as defined below) under the Filer ASDP in reliance on the Exemption Sought will not exceed 2% of the total number of Shares outstanding, as of the Effective Date; and
(m) all sales of Shares will be conducted over a period of 12 months (the Sales Period) as specified in the corresponding Form 45-102F1 Notice of Intention to Distribute Securities (a Form 45-102F1) under Section 2.8 of National Instrument 45-102 Resale of Securities (NI 45-102) to be filed when the Filer ASDP is entered into;
14. it is the intention of the Filer and the Issuer to rely on the exemption from the insider trading restrictions available to trades conducted under automatic plans in the Legislation and corresponding law and regulation in the Jurisdictions for all sales under the Filer ASDP;
15. it is currently the intention of the Filer to sell up to approximately 2,000,000 Shares under the Filer ASDP;
16. as the Filer is deemed to be a control person of the Issuer, any sale of the Shares by the Filer would be considered a control distribution, and the Filer would either have to comply with the prospectus requirement or satisfy the conditions of the exemption from the prospectus requirement for trades by a control person in section 2.8 of NI 45-102 (the Exemption for Trades by a Control Person);
17. the Filer's compliance with each of the conditions of the Exemption for Trades by a Control Person would impede, and ultimately prevent, the implementation and operation of the Filer ASDP because (i) the seven-day waiting period requirement in paragraph 2.8(3)(b) of NI 45-102, (ii) the 30-day expiry provision in paragraph 2.8(4)(a) of NI 45-102, and (iii) the prohibition in subsection 2.8(5) of NI 45-102 on filing a new Form 45-102F1 prior to the expiry of a previously filed Form 45-102F1 would prevent continued or successive dispositions under the Filer ASDP by requiring that the Filer refile a Form 45-102F1 respecting the proposed sales of Shares every 30 days over the course of the duration of the Filer ASDP and that the Filer wait at least seven days before making the first trade after each filing of a Form 45-102F1; compliance with these requirements would effectively limit the Filer's ability to conduct sales of Shares to intermittent 23-day windows, separated by seven-day waiting periods, which would have a material detrimental impact on the Filer's ability to implement the Filer ASDP; and
18. in absence of the Filer's compliance with each of the conditions of the Exemption for Trades by a Control Person, the Filer requests the Exemption Sought in order to relieve the Filer from the prospectus requirement in connection with each disposition of Shares under the Filer ASDP and enable the establishment of the Filer ASDP in accordance with Staff Notice 55-317, while still providing timely and meaningful public disclosure of the intended and completed sales by the Filer of Shares consistent with the policy rationale underlying section 2.8 of NI 45-102.
Decision
¶ 4 Each of the Decision Makers 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 Makers under the Legislation is that the Exemption Sought is granted, provided that:
(a) the Filer ASDP is established and administered in accordance with paragraph 13 above, and
(b) the total number of Shares sold under the Filer ASDP does not exceed 2% of the total number of outstanding Shares, as of the Effective Date;
(c) the Filer files a completed and signed notice in the form of Form 45-102F1 (a Notice) in accordance with NI 45-102 at least seven days prior to the first trade of Shares under the Filer ASDP that discloses the aggregate number of Shares intended to be sold under the Filer ASDP and the Sales Period for the sale of Shares under the Filer ASDP'
(d) the Filer files insider reports within three days of the completion of each sale under the Filer ASDP in accordance with the insider reporting obligation applicable to trades by a control person in paragraph 2.8(3)(c) of NI 45-102;
(e) the Sales Period under the Filer ASDP is equal to 12 months;
(f) the Notice for the Filer ASDP is signed no earlier than one business day before it is filed;
(g) the Notice filed in connection with trades under the Filer ASDP expires on the earlier of (i) the end of the Sales Period and (ii) the date that the Filer files the last of the insider reports reflecting the sale of all Shares referred to in the Notice;
(h) the Filer does not conduct further sales of Shares under the Filer ASDP following the expiry of the Notice;
(i) the Issuer is and has been a reporting issuer in a jurisdiction of Canada for the four months immediately preceding each trade under the Filer ASDP;
(j) the Filer has held any Shares, or securities or related financial instruments that were converted into or exercised or settled for such Shares, sold under the Filer ASDP for at least four months prior to the trade of such Shares;
(k) no unusual effort is made to prepare the market or to create a demand for the Shares;
(l) no extraordinary commission or consideration is paid to a person or company in respect of the trade;
(m) the Issuer is not in default of securities legislation in any jurisdiction; and
(n) the Exemption Sought shall terminate on the date that is 12 months following the Effective Date.
Furthermore, the decision of the Decision Makers under the Legislation is that the Confidentiality Relief is granted.
"John Hinze"
Director, Corporate Finance
British Columbia Securities Commission
OSC File #: 2024/0475