Antibe Therapeutics Inc.

Headnote

National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- application for partial revocation of failure-to-file cease trade order -- issuer cease traded due to failure to file with the Commission annual information form, audited annual financial statements, interim financial statements, related management's discussion and analysis and related certifications -- issuer has applied for a partial revocation of the cease trade order to permit trades of securities of the issuer in connection with a court-approved transaction under a receivership -- partial revocation granted subject to conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.

National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.

IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED
(the Act)

AND

IN THE MATTER OF
ANTIBE THERAPEUTICS INC.

ORDER

(Section 144)

BACKGROUND

1. Antibe Therapeutics 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 July 10, 2024.

2. The Issuer has applied to the Principal Regulator pursuant to section 144 of the Securities Act (Ontario) for a partial revocation order of the FFCTO.

INTERPRETATION

3. Terms defined in National Instrument 14-101 Definitions or National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions have the same meaning if used in this order, unless otherwise defined.

REPRESENTATIONS

4. This decision is based on the following facts represented by the Issuer:

a. The Issuer was incorporated under the Business Corporations Act (Ontario) on May 5, 2009.

b. The Issuer is a reporting issuer in each of the provinces of Alberta, British Columbia, Manitoba, Ontario and Saskatchewan. The Issuer is not a reporting issuer in any other jurisdiction in Canada.

c. The registered and head office of the Issuer is located at 15 Prince Arthur Avenue, Toronto, Ontario M5R 1B2. Since the initiation of the receivership, the Issuer has utilized the mailing address of FTI Consulting Canada Inc., the court-appointed receiver and manager of the Issuer (the "Receiver"), as its mailing address being: FTI Consulting Canada Inc., 79 Wellington Street West, Suite 2010, P.O. Box 104, Toronto, Ontario, M5K 1G8.

d. The business of the Issuer is research and development in the physical, engineering and life sciences space. More specifically, the Issuer is a clinical stage biotechnology company that develops novel pain and inflammation-reducing drugs.

e. The authorized share capital of the Issuer consists of an unlimited number of common shares (the "Common Shares"). As at the date hereof, there are 52,651,259 Common Shares issued and outstanding. The Issuer also has 2,440,112 stock options, 3,488,930 restricted share units and 6,485,706 warrants outstanding.

f. The Common Shares were listed on the Toronto Stock Exchange (the "TSX") under the trading symbol "ATE". The Common Shares were suspended from trading on the TSX in connection with the FFCTO and were delisted from the TSX on May 24, 2024.

g. The FFCTO was issued as a result of the Issuer's failure to file the following continuous disclosure materials as required by applicable Canadian securities laws:

(i) audited annual financial statements for the year ended March 31, 2024;

(ii) management's discussion and analysis for the year ended March 31, 2024;

(iii) the annual information form for the year ended March 31, 2024; and

(iv) certifications of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109");

(collectively, the "Unfiled Documents").

h. In addition to the Unfiled Documents, the Issuer has also not filed the following documents:

(i) interim financial statements for the three, six and nine month periods ending June 30, 2024, September 30, 2024 and December 31, 2024, respectively (the "2024 Interim Financial Statements");

(ii) management's discussion and analysis relating to the 2024 Interim Financial Statements;

(iii) certification of the 2024 Interim Financial Statements as required by NI 52-109; and

(iv) any other continuous disclosure documents required to be filed by applicable Canadian securities laws since the date of the FFCTO.

(all such documents, together with the Unfiled Documents, the "Unfiled Disclosure").

i. On March 28, 2024, the Issuer was served with a notice of application by Nuance Pharma Limited ("Nuance") seeking, inter alia, recognition of an unsecured arbitration award totaling approximately USD $24 million made against the Issuer in favor of Nuance and the appointment of a receiver (the "Nuance Notice"). The Nuance Notice was served in connection with the license agreement dated February 9, 2021, between Nuance and the Issuer (the "License Agreement") whereby Nuance claimed fraudulent misrepresentation of the License Agreement.

j. As a result of the Nuance Notice, the Issuer obtained creditor protection under the Companies' Creditors Arrangement Act (Canada) (the "CCAA") on April 9, 2024, for an initial order (the "Initial Order") which was granted by the Superior Court of Justice (Commercial List) (the "Court"). Pursuant to the Initial Order, the Court, inter alia, granted a "stay of proceedings" against the Issuer, its directors and officers until April 18, 2024, and appointed Deloitte Restructuring Inc. as monitor of the Issuer under the CCAA Proceedings (the "CCAA Proceedings").

k. On April 22, 2024, the Court issued an endorsement terminating the CCAA Proceedings and confirming the appointment of the Receiver, without security, of the Issuer's assets, undertakings and properties (the "Receivership").

l. On June 24, 2024, the Court granted an order (the "Sale Order") that authorized and directed the Receiver and Bloom Burton Securities Inc. as financial advisors to take such steps as they deemed necessary or advisable to carry out the sale of all or part of the Issuer's property and assets (the "Sale Process").

m. On January 15, 2025, in furtherance of the Sale Process, the Issuer announced that it had entered into a transaction agreement (the "Transaction Agreement") with Taro Pharmaceutical Inc. (the "Purchaser") whereby upon completion of the transaction contemplated by the Transaction Agreement, the Purchaser will own all of the issued and outstanding equity shares in the Issuer. The Purchaser is an arm's length party to the Issuer.

n. On January 29, 2025, the Court granted an order under section 101 of the Courts of Justice Act (the "Approval and Reverse Vesting Order") pursuant to which, inter alia, the Court: (i) approved the Transaction Agreement and the transactions contemplated therein (the "Transaction"); (ii) added 1001138302 Ontario Ltd. ("Residual Co") as part of the Receivership; (iii) authorized the transfer and vesting of all of the right and title and interest of the Issuer in certain excluded assets and liabilities in Residual Co; (iv) authorized the Issuer to file articles of reorganization or such other instruments, as applicable; (v) authorized and directed the Issuer to issue an aggregate of 100 newly issued common shares (the "Purchased Shares") to the Purchaser; and (vi) authorized the termination and cancellation of all of the equity interests of the Issuer for no consideration.

o. The issuance of the Purchased Shares by the Issuer will occur in Ontario.

p. Pursuant to the Approval and Reverse Vesting Order, having been advised of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions relating to the requirement for "minority" shareholder approval in certain circumstances, the Court ordered that no meeting of shareholders or other holders of equity interests of the Issuer is required to complete the Transaction.

q. Residual Co is a wholly-owned subsidiary of the Issuer and pursuant to the Approval and Reverse Vesting Order the shares of Residual Co will be transferred on closing to the Receiver, in trust, on behalf of the claimants. The Issuer does not have any other subsidiaries. Pursuant to the Approval and Vesting Order, the Court ordered that no approval, authorization or other action by or notice to or filing with any governmental authority or regulatory body exercising jurisdiction in respect of the Issuer is required to be held in respect of the Transaction.

r. Pursuant to the Approval and Reverse Vesting Order, following the completion of the Transaction, the Receiver, for and on behalf of Residual Co, will file an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency Act (Canada).

s. As the Transaction will involve trades and acts in furtherance of trades in securities of the Issuer, the closing of the Transaction is conditional on the partial revocation of the FFCTO.

t. In connection with carrying out the Sale Order and obtaining the Approval and Vesting Order, the Issuer had engaged in certain acts in furtherance of trades in securities of the Issuer, including its entry into the Transaction Agreement (the "Acts"), which Acts were taken with the approval of, and under the supervision of, the Court.

u. Except for the Acts and having not filed the Unfiled Disclosure, the Issuer is not in default of any requirements of the FFCTO, the securities legislation of any jurisdiction in which the Issuer is a reporting issuer (the "Legislation"), or the rules and regulations made pursuant thereto.

v. Following the completion of the Transaction, all securities of the Issuer will remain subject to the FFCTO until a full revocation of the FFCTO is granted.

w. Other than the Transaction, 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.

x. The Issuer has applied to cease to be a reporting issuer and for a full revocation of the FFCTO. The Issuer will proceed with such applications upon the closing of the Transaction.

y. Since the issuance of the FFCTO, there have not been any material changes in the business, operations and affairs of the Issuer that have not been disclosed to the public other than matters relating to the Receivership and the Transaction.

z. All inquiries from securityholders that the Receiver has received regarding the proposed Transaction have been responded to by the Receiver.

aa. The Purchased Shares will not be qualified for distribution to the public under any applicable Canadian securities laws and will be subject to restrictions on transfer in Canada.

bb. The Transaction will be completed in accordance with all applicable laws and pursuant to the Approval and Reverse Vesting Order.

ORDER

5. 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.

6. 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 (including for greater certainty, acts in furtherance of trades in securities of the Issuer) that are necessary for and are in connection with the Transaction, provided that:

a. prior to the completion of the Transaction, the Purchaser will receive:

(i) a copy of the FFCTO;

(ii) a copy of this order; and

(iii) written notice from the Issuer, to be acknowledged by the Purchaser in writing (the Acknowledgement), that all of the Issuer's securities, including the securities issued in connection with the Transaction, will remain subject to the FFCTO until a full revocation order is granted, the issuance of which is not certain and that the Issuer will proceed with its application to cease to be a reporting issuer immediately following closing of the Transaction;

b. the Issuer undertakes to make available a copy of the Acknowledgement to staff of the Principal Regulator upon request; and

c. this order will terminate on the earlier of:

(i) the completion of the Transaction; and

(ii) 60 days from the date hereof.

DATED this 6th day of March 2025.

"Erin O'Donovan"
Manager, Corporate Finance
Ontario Securities Commission

OSC File #: 2025/0056