Sunrise Energy Metals Limited (formerly, Clean TeQ Holdings Limited)
National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- Application by a reporting issuer for an order that it is not a reporting issuer -- Based on diligent enquiry, residents of Canada (i) directly or indirectly beneficially own approximately 2.77% of the issuer's outstanding shares worldwide, and (ii) approximately 0.44% of the total number of shareholders of the issuer worldwide -- Issuer is subject to Australian securities law and requirements of the Australian Stock Exchange -- Issuer has undertaken that it will concurrently deliver to its Canadian securityholders all disclosure material it is required under Australian securities laws and exchange requirements to deliver to Australian resident securityholders -- Issuer has provided notice that it submitted an application to cease to be a reporting issuer in Ontario.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
May 31, 2021
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, CHAPTER S.5, AS AMENDED AND IN THE MATTER OF SUNRISE ENERGY METALS LIMITED (FORMERLY, CLEAN TEQ HOLDINGS LIMITED) (the Filer)
The Ontario Securities Commission (the Commission) has received an application from the Filer for an order under subparagraph 1(10)(a)(ii) of the Securities Act (Ontario) (the Act) that the Filer is not a reporting issuer in Ontario (the Order Sought).
Terms defined in National Instrument 14-101 Definitions 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 an Australian based business focused on the development and commercialization of technologies for metals recovery and industrial water treatment. The Filer's material property is the Clean TeQ Sunrise Project located in New South Wales, Australia.
2. The Filer is a company existing under the Corporations Act 2001 (Australia) and the Filer's registered office and principal place of business is located in Victoria, Australia.
3. The Filer has no assets or operations in Canada. None of the Filer's officers or employees are residents of Canada and only one of the Filer's non-executive directors is a resident of Canada.
4. The Filer is not a reporting issuer in any jurisdiction of Canada other than Ontario and the Filer is not in default of the securities legislation of any jurisdiction in Canada.
5. The Filer's authorized capital consists of an unlimited number of ordinary shares (Ordinary Shares), of which 885,941,458 were issued and outstanding as of March 18, 2021. The Filer has no outstanding securities other than: (a) the Ordinary Shares; (b) options (Options) issued under the Filer's employee incentive plan and entitling the holders thereof to acquire 6,746,589 Ordinary Shares; and (c) performance share rights (Performance Share Rights) under the Filer's employee incentive plan and entitling the holders thereof to receive, subject to the satisfaction of the relevant vesting conditions and performance hurdles, up to 19,098,179 Ordinary Shares.
6. Effective March 29, 2021, the Filer consolidated its Ordinary Shares on a 10:1 basis. All references to the Ordinary Shares in this order are to pre-consolidation Ordinary Shares.
7. The Ordinary Shares are listed on the Australian Securities Exchange (the ASX) under the trading symbol "SRL". The Ordinary Shares were previously listed on the Toronto Stock Exchange (the TSX).
8. On November 5, 2020, at the request of the Filer, the Ordinary Shares were voluntarily delisted from the TSX effective at the close of trading. At the time of delisting from the TSX, the directors of the Filer disclosed that the minimal trading activity of the Ordinary Shares on the TSX no longer justified the expense and administrative efforts associated with maintaining the dual listing, and that the Filer's listing on the ASX provided shareholders with sufficient liquidity.
9. In support of the representations set forth below concerning the percentage of outstanding shareholders and the total number of shareholders in Canada, the Filer sought and obtained information as of February 4, 2021, from NASDAQ Global Corporate Solutions (NGCS), regarding the number, holdings, identity and geographic location of the registered holders of its outstanding Ordinary Shares. NGCS undertook a thorough and diligent examination of the share register, various reports and public filings for the purposes of determining the number, holdings, identity and geographic location of the beneficial holders of its Ordinary Shares, including a look-through of custodian and nominee positions.
10. Accordingly, based on the Filer's inquiries described above conducted on its behalf by NGCS, as of February 4, 2021, the Filer had 885,941,458 Ordinary Shares outstanding, of which the number of Ordinary Shares held by residents of Canada beneficially and of record, is 24,564,556 shares representing 2.77% of the total outstanding shares. Excluding the holdings of one Canadian institutional investor and one publicly listed Canadian corporate shareholder, residents of Canada directly or indirectly beneficially own 10,300,780 (1.16%) Ordinary Shares. Further, residents of Canada represent approximately 33 of the Filer's approximate 7,483 worldwide securityholders and therefore residents of Canada comprise 0.44% of the Filer's worldwide securityholders.
11. Residents of Canada do not beneficially own any of the Options or Performance Share Rights.
12. The Filer has no current intention to seek public or private financing by way of an offering of securities in any jurisdiction of Canada.
13. The Filer has never conducted a prospectus or private placement offering in Canada. Since delisting, the Filer has not taken any steps that indicate there is a market for its securities in Canada. In the 12 months prior to the voluntary delisting of the Ordinary Shares from the TSX, the daily average volume of trading of the Ordinary Shares in Canada was approximately 4.21% of the daily average volume of trading of the Ordinary Shares worldwide during the same period.
14. None of the Filer's securities are listed, traded or quoted on a marketplace in Canada (as that term is defined in National Instrument 21-101 Marketplace Operation) and the Filer does not intend to have its securities listed, traded or quoted on any such marketplace in Canada.
15. The Filer is subject to all applicable corporate requirements of a company formed in Australia, applicable Australian laws and the rules of the ASX. The Filer is not in default of any requirements of Australian law or the rules or requirements of the ASX applicable to it.
16. The Filer files periodic and timely disclosure as required under the securities laws of Australia and the rules of the ASX.
17. The Filer qualifies as a "designated foreign issuer" under National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102) and has relied on, and complied with, the exemptions from Canadian continuous disclosure requirements afforded to designated foreign issuers under Part 5 of NI 71-102.
18. On April 26, 2021, the Filer filed its ASX Quarterly Activities Report on SEDAR and disclosed that it has submitted an application to the Commission for an order that it is not a reporting issuer in Ontario and, if that order is granted, the Filer will no longer be a reporting issuer in any jurisdiction of Canada.
19. The Filer has provided an undertaking to the Commission that it will deliver to its Canadian resident securityholders, in the same manner and at the same time as delivered to its Australian resident securityholders, all continuous disclosure that the Filer is required to deliver to its Australian resident securityholders under applicable Australian securities laws and ASX requirements.
20. The Filer is unable to rely on the simplified procedure set out in National Policy 11-206 Process for Cease to be a Reporting Issuer Applications (NP 11-206) to seek an order that it is not a reporting issuer in Ontario as the Filer has, among other things, more than 50 securityholders worldwide.
21. The Filer is unable to rely on the modified procedure set out in NP 11-206 to seek an order that it is not a reporting issuer Ontario as, among other things, more than 2% of outstanding Ordinary Shares are beneficially owned by Canadian residents.
The Commission is satisfied that it would not be prejudicial to the public interest for the Commission to make the order.
The decision of the Commission under subparagraph 1(10)(a)(ii) of the Act is that the Order Sought is granted.