~~~ From Sheldon Fast ~~~
British Columbia Securities Commission
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996,c. 418
AND
IN THE MATTER OF THERMO TECH TECHNOLOGIES INC.
Cease Trade Order Under Section 164
1. WHEREAS:
(a) the Issuer is a reporting issuer, incorporated under the 'Canada
Business Corporation Act',with its head office in British Columbia;
(b) the issuer's shares have traded only on the NASD OTC Bulletin Board since February 11, 1999 and from January 17,1995 were quoted on the NASDAQ Small Cap Market ("NASDAQ");
(c) on March 18,1998 the Issuer issued a news release, and on March
25,1998 filed a material change report, stating that it had completed an agreement for the acquisition of a 50% interest in two Ontario Transfer Stations and waste management facilities
(the "Acquisitions");
(d) the notes to the Issuer's annual audited financial statements for
the year ended April 30,1998 disclosed material information about the
Acquisition additional to that provided in the previously issued and
filed news release and material change report including that:
(i) the purchase price for the Acquisition was settled with
4,123,380 shares of the Issuer (the "Shares");
(ii) prior to the Acquisition, on February 11,1998, the Issuer
entered into an agreement with a Bahamian Company ("Baha Co.") under
which Baha Co. provided the shares to the Issuer (the "Baha Agreement");
(iii) the Baha Agreement resulted in the Issuer owing a total of
$11,545,464 to Baha Co. (the "Indebtedness"), which amount represented the cumulative value of the Shares based on the trading value of the Shares on NASDAQ on February 11,1998; and
(iv) Baha Co. had acquired all of the Shares from an officer of the
Issuer or from companies and persons related to him (collectively, the "Related Parties")
2. AND WHEREAS the Issuer or René Branconnier, a director, president and Chief Executive Officer of the Issuer, has represented to the staff of the British Columbia Securities Commission that:
(a) the names of the Related Parties were René Branconnier, Sharon
Branconnier, wife of René Branconnier, and Sanclair Holdings, a company controlled by Sharon Branconnier,
(b) the agreement under which Baha Co. acquired the Shares from the
Related Parties was a verbal agreement;
(c) pursuant to the verbal agreement:
(i) in September, 1997 the Related Parties granted Baha Co. an
option to acquire from them up to an aggregate of 4.2 million shares of the Issuer ("the Option");
(ii) Baha Co. exercised the Option in March,1998; and
(iii) of the shares optioned to the Baha Co. by the Related
Parties, 930,000 shares were optioned by René Branconnier, 970,000
shares by Sharon Branconnier, and 2,100,742 shares by Sanclair Holdings Ltd;
(d) Baha Co. is Intek Corporation ("Intek"), a company incorporated in the Commonwealth of the Bahamas;
(e) the Baha Agreement was a verbal agreement;
(f) the Issuer made the Acquisition on March 19, 1998 upon payment of a total of $5,968,992, Payable by the delivery of the Shares;
(g) Intek and the Issuer, prior to April 30, 1998 agreed to set off the following amounts owed to the Issuer against the Indebtedness;
(i) $1,090,157 owed to the Issuer by parties associated with René
Branconnier for the exercise of certain stock options of the Issuer;
(ii) $1,750,000 owed to the Issuer by René Branconnier or parties
associated with him for the exercise of 2.5 million stock purchase
warrants of the Issuer; and
(iii) a refundable deposit of $2,000,000 owed to the Issuer by HACT
Technologies Inc., a company controlled by René Branconnier.
3. AND WHEREAS it appears to staff that, during the period of February 11, 1998 through to the date of this order, the Issuer failed to issue and file a press release, and failed to file a material change report, that were sufficiently complete to enable a reader to appreciate the significance of the Acquisition without reference to other material, contrary to section 85 of the Securities Act, R.S.B.C. 1996,c. 418 (the "Act"), including the following disclosure deficiencies concerning the Acquisition;
(a) the Issuer has failed to disclose the nature and substance of the
transaction and underlying agreements related to the Baha Agreement and the Acquisition, including certain of the matters referred to in
paragraph 2 above; and
(b) the Issuer has failed to disclose the reasons for the Issuer
incurring an indebtedness of $11,545,464 for an acquisition valued at
$5,968,992;
(collectively, the "Required Disclosure");
NOW THEREFORE it is ordered under section 164 of the Act that all
persons cease trading in the securities of the Issuer until the Issuer makes the Required Disclosure.
DATED at Vancouver, British Columbia, on July 14, 1999.
Gerry
Halischuck
Deputy
Director, Compliance
Raging Bull Post #3730 By Sheldon Fast
Sunday, 15 Aug 1999 at 7:30 PM EDT |
