National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- The issuer is not an OTC reporting issuer; the securities of the issuer are beneficially owned by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders worldwide; no securities of the issuer are traded on a market in Canada or another country; the issuer is not in default of securities legislation except it has not filed certain continuous disclosure documents -- Requested relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
April 12, 2021
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF COUNTERPATH CORPORATION (the Filer)
The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (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 dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application,
(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 Alberta, and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. the Filer is incorporated under the Nevada Revised Statues and its head office is located in Vancouver, BC;
2. the Filer is a reporting issuer in Alberta, British Columbia and Ontario;
3. prior to the Merger (as defined below), the Filer had 6,455,645 shares of common stock (Filer Shares), 351,173 options to purchase Filer Shares (Options) and 761,081.10 deferred share units (DSUs) outstanding; the Filer had no other securities outstanding;
4. the Filer entered into an agreement under which Alianza, Inc. (Alianza) acquired the Filer by merger (the Merger); under the Merger,
(a) for each Filer Share issued and outstanding prior to the Merger, former Filer shareholders are entitled to receive US$3.49 in cash;
(b) for each vested Option, the holders are entitled to receive an amount in cash equal to the product of (i) the excess, if any, of US$3.49 over the per share exercise price of such Option; and (ii) the number of Filer Shares subject to such Option; each unvested Option and each Option with a per share exercise price equal to or greater than US$3.49 was canceled without consideration as of the effective time of the Merger; and
(c) for each DSU, the holders are entitled to receive cash payment from the Filer equal to the product of (i) US$3.49; and (ii) the number of Filer Shares subject to such DSU;
5. the Merger closed on March 1, 2021, at which time Alianza became the sole shareholder of the Filer;
6. no securities of the Filer are outstanding other than the Filer Shares owned by Alianza;
7. on March 2, 2021, the Filer Shares were delisted from the Toronto Stock Exchange and on February 26, 2021, the Filer Shares were delisted from the Nasdaq Stock Market;
8. the Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
9. the outstanding securities of the Filer, including debt securities, are 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;
10. 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;
11. 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;
12. the Filer is not in default of securities legislation in any jurisdiction other than its obligations to file on or before March 17, 2021 its interim financial statements and management's discussion and analysis for the interim period ended January 31, 2021, as required under National Instrument 51-102 Continuous Disclosure Obligations and the related certification of such interim filings as required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the Interim Filings);
13. the requirements to file the Interim Filings did not arise until after the Filer became a wholly owned subsidiary of Alianza; and
14. 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 Interim Filings.
Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Makers to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.