Order: In the Matter of Hamilton Airlines (2000) Inc.
R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")
AND
IN THE MATTER OF
HAMILTON AIRLINES (2000) INC. (The "Company")
ORDER
(Section 68 of the Act)
WHEREAS section 68 of the Act states "[w]here it appears to the Director that a preliminary prospectus is defective in that it does not substantially comply with the requirements of Ontario securities law as to form and content, the Director may, without giving notice, order that the trading permitted by subsection 65(2) in the security to which the preliminary prospectus relates shall cease until a revised preliminary prospectus satisfactory to the Director is filed and forwarded to each recipient of the defective preliminary prospectus according to the record maintained under section 67";
WHEREAS section 55 of the Act provides that the Director shall issue a receipt for a preliminary prospectus forthwith upon the filing thereof;
WHEREAS upon the filing of a preliminary prospectus staff conducts a review to determine, by reference to a checklist, if the prerequisites to the issuance of a receipt for the preliminary prospectus have been met;
WHEREAS after the administrative review is completed and a receipt for the preliminary prospectus is issued, a substantive review of the preliminary prospectus is conducted;
WHEREAS on March 3, 2000, the Director issued a receipt for a preliminary prospectus dated March 1, 2000 filed by the Company in connection with its initial public offering (the "Preliminary Prospectus");
WHEREAS staff has now completed a substantive review of the Preliminary Prospectus and is of the view that: (i) the disclosure in the Preliminary Prospectus is materially deficient such that it does not meet the statutory standard of full, true and plain disclosure. Specifically, the Preliminary Prospectus does not clearly identify the type of security being offered as it refers interchangeably to, among others, "Rights Certificates", "certificates", "Common Shares", Subscription Receipts" and "Subscription certificate". Additionally, the Preliminary Prospectus contains numerous material factual statements without stating their source, including that the Company "should have little difficulty in being granted both domestic and international licenses". The Preliminary Prospectus also contains a myriad of statistical information most of which is not attributable to a verifiable source; (ii) the Company lacks the necessary human resources to competently manage a public company; and (iii) the Company does not have a business per se in that it has no revenues to date, limited cash resources and has not obtained the necessary regulatory approvals and licenses necessary to unfolding the objectives disclosed in the Preliminary Prospectus;
WHEREAS as a result of a substantive review of the Preliminary Prospectus, staff recommends that, pursuant to section 68 of the Act, the Director cease trade all securities of the Company relating to the Preliminary Prospectus;
AND WHEREAS the Director is of the view that to make this Order is consistent with section 68 of the Act as the Preliminary Prospectus is defective in that it does not substantially comply with the requirements of Ontario securities law as to form and content such that trading in accordance with subsection 65(2) of the Act would be contrary to the public interest;
IT IS ORDERED pursuant to section 68 of the Act that the trading permitted by subsection 65(2) of the Act in any security to which the Preliminary Prospectus relates shall cease until a revised preliminary prospectus satisfactory to the Director is filed and forwarded to any recipient of the Preliminary Prospectus.
DATED at Toronto, Ontario this 11th day of April, 2000.
"Kathryn Soden"Director, Corporate Finance