Unfortunately (because of the CTO)a number of Canadian friends have invested sizeable amounts into this company and since I have experience in the area of compliance issues for publicly traded companies (called reporting issuers in Canada) they asked for my opinion about the dilemma they find themselves in. FYI I have no idea as to those involved in Atacama, their backgrounds, and so on. After spending some time reading posts here trying to get a handle on what passes for fact, it is quite clear most have limited to no experience on expectations publicly traded companies have in Canada.
Atacama was cease traded for failing to file required continuous disclosure. What that means in short is for publicly traded companies they must provide audited annual financials, interim unaudited financials, MD&A (management discussion and analysis). It appears after reviewing the information found on line they have not remained compliant. I do see a number of granted revocation exemptions having been granted to investors allowing them to sell their holdings. To be clear a Failure to File is not unusual and does not immediately mean enforcement at the regulator would become involved. Many companies are cease traded for various reasons and many because they have decided the business activities of the company do not warrant the costs associated with remaining compliant and fall into default where they remain. This default position remains even if the company has decided to cease operations and even if the company charter is allowed to expire.
In the case of Atacama the former statements seem not to apply as information coming from various company officials indicates the company remains a going concern, while still under a CTO. Why this is is anyone's guess and I for one would not speculate as to the reasons. It is unusual but not unheard of.
There is no separation between past and current management activities. The company still can be held accountable for actions of its management even if that management no longer is in place-there is continuity of sanctions regardless of who is running it. I have read with some raised eyebrows, the claims made by a former CEO with regards to capital raising efforts. None of the claims made as to mineral deposits, assets, and so on, found in the Executive Summary issued by the company under Mr. Grant has any basis in acceptable disclosure-in other words those claims were highly promotional and quite simply, offside, as were claims made by the same executive member as to investors not losing money purchasing the preferred share issuance in 2019, the company being listed on various exchanges, and other claims. With no intimate knowledge of the Alberta Securities Commission and what they may be doing, or not doing, those would be major areas of concern for any securities analyst tasked with reviewing the disclosure of a company acting in that manner. If that were me I would pass this along to my manager with the recommendation of providing information to enforcement to pursue. I would not be surprised if that were the case here. The money raised by the company in the sale of the prefereds cannot be found in any SEDAR filing where they should be posted, since that is a requirement under Canadian securities law. Many of the press releases (the letter to shareholders would not be considered a press release since it was not a solicitation or news but rather an update) issued seem to be highly promotional with little substance to them other than the inference that things would be improved going forward. Yes, there is much to be concerned about as why so much time has elapsed since the issuance of the CTO in July of 2018.
The process of having a CTO removed is not exhaustive and given the company has little in the way of on-going concern activities. Since it was a Failure To File breach, it should easily have been rectified with the filing of the missing financials and other required disclosure. Based on experience it should not have taken more than a few months to have had this matter resolved back in 2018 or early 2019. Since that time, and as more and more time passes, it will become a more complicated matter and the costs associated with its removal are adding up each day. I have seen CTO orders for failure to file revoked in as little as a few weeks.
I am not going to speculate as to the why's this matter was not quickly put behind them.
See the next post as this is becoming quite long.
