On September 21, 2017, following the results of a stakeholder survey conducted over the course of the year to date, the British Columbia Securities Commission (BCSC) announced changes to the existing equity crowdfunding rules found in British Columbia Instrument 45-535 – Start-up Crowdfunding Registration and Prospectus Exemptions (BCI 45-535) to address two of the most

On March 7, 2017, 1891868 Alberta Ltd., a wholly-owned indirect subsidiary of Sprott Inc. (Sprott, and together with its wholly-owned subsidiaries, Sprott Group), filed an originating application (Application) in the Court of Queen’s Bench of Alberta (Court) for an order approving a proposed plan of arrangement (Arrangement) with Central Fund of Canada Limited (Target), Sprott Physical Gold and Silver Trust (to be formed and managed by Sprott Asset Management LP (Trust)), the holders of class A non-voting shares (Class A Shares) of the Target and, as applicable, the holders of common shares (Common Shares) of the Target pursuant to Section 193(2) of the Business Corporations Act (Alberta) (Act).  The Application has been scheduled to be heard by the Court on September 7, 2017.

The Application

The Application seeks an interim order for the calling and holding of a meeting of shareholders (Target Shareholders) of the Target to approve the Arrangement proposed by the Sprott Group.  It should be noted that applications for court orders approving arrangements are typically made by target companies.  Accordingly, this application, which is not supported by the Target, could be characterized as a “hostile” plan of arrangement.  At an application held in April, the Court agreed to set a date in September for the interim application.

According to the Sprott Group, there are a number of qualitative and quantitative benefits to the Target Shareholders which are anticipated to result from the Arrangement and the transactions contemplated thereby, including eliminating the dual-class share structure, continued exposure to the future growth of the Target’s portfolio of assets, the availability of a physical redemption feature, and the potential for the Class A Shares to trade at, near or above their net asset value (instead of at a discount to net asset value, which is currently the case).

According to the Target, the Application is one of numerous steps already taken by the Sprott Group to seek control of the Target. Among other measures taken, the Sprott Group has previously attempted to requisition a meeting of the Target to, among other things, elect a slate of directors (Requisition), commenced a derivative action against the Target and appealed to the Court of Appeal the Court’s finding that the Requisition was invalid.  All of these attempts were unsuccessful.

In this context, a take-over bid made directly to the holders of Common Shares and Class A Shares would likely be ineffective since, according to Sprott, at least 75% of the Common Shares are held by directors and officer of the Target and such persons are not expected to tender to the bid.


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calgary-1751846_1920The Supreme Court of Canada (SCC) recently dismissed two separate appeals whereby the defendants, Ronald Aitkens and Jeremy Peers, argued for a right to trial by jury for securities law offences.

Aitkens and Peers were charged with offences under the Securities Act (Alberta). Section 194 of the Securities Act (Alberta) provides for a maximum penalty

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In December, the Alberta Securities Commission (ASC) published its annual Corporate Finance Disclosure Report (Report). The ASC then hosted an information seminar (Seminar) on the Report’s findings and recommendations in Calgary, Alberta on January 11, 2017. Fasken Martineau was pleased to attend the Seminar with a view to advising our reporting issuer clients as to best disclosure practices.

The ASC chose to focus on commodity price impacts on continuous disclosure by reporting issuers, as opposed to the more typical practice of a broader-scope report. As such, the Report gave topical and important reviews, in that context, on the use of non-GAAP measures (NGMs) and forward-looking information, as well as impairment of assets under accounting standards. Most prominent among the continuous disclosure issues in the Report, however, was liquidity and capital resources information in management discussion and analysis disclosure.

We expect the ASC will be paying particular attention to fulsome and timely disclosure of liquidity and capital resources information in 2017, particularly in respect of plans to remedy working capital deficiencies, conditional borrowing limits, risk of breach of financial covenants, and impacts on production capacity maintenance following capital expenditure reductions and asset dispositions.


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On October 31, 2016, the Alberta Securities Commission (ASC) adopted Multilateral Instrument 45-108 Crowdfunding (MI 45-108) which will allow small or medium sized businesses (Target Businesses) to raise more capital through crowdfunding offerings across multiple jurisdictions in Canada than is possible under ASC Rule 45-517 Prospectus Exemption for Start-up Businesses (ASC Rule 45-517) which was adopted by the ASC on July 29, 2016.  Both MI 45-108 and ASC Rule 45-517 (collectively, the Growth Initiatives) provide Target Businesses with an exemption from prospectus requirements.  The Growth Initiatives are in place of proposed MI 45-109 Prospectus Exemption for Start-up Businesses published by the ASC and the Nunavut Securities Office.

The Growth Initiatives are aimed at addressing Target Businesses’ need for a cost effective and simple way to raise capital in a difficult economic environment by raising small amounts of money from a large number of people, commonly referred to as crowdfunding.  The Growth Initiatives offer different avenues that Target Businesses can use to overcome the hurdle of attracting investment without the high transactional costs of completing a prospectus offering.


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