Initial Decision Release No. 1395

Administrative Proceeding

File No. 3-18017

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

In the Matter of

Can-Cal Resources Ltd.,

China Fruits Corp., and

SkyStar Bio-Pharmaceutical Co.

Initial Decision as to 

Can-Cal Resources Ltd.

January 28, 2020

Appearances: James M. Carlson, David S. Frye, David Misler,

Kevin P. O’Rourke, Stephan J. Schlegelmilch,

and Neil J. Welch, for the Division of Enforcement, 

Securities and Exchange Commission

Justin C. Jones, Jones Lovelock, 

for Respondent Can-Cal Resources Ltd. 

Before: James E. Grimes, Administrative Law Judge

Summary

This initial decision revokes the registration of the registered securities of 

Can-Cal Resources Ltd. The revocation is based on Can-Cal’s failure to timely 

file required periodic reports with the Securities and Exchange Commission.

Introduction

The Commission initiated this proceeding in June 2017, when it issued an 

order instituting proceedings (OIP) under Section 12(j) of the Securities 

Exchange Act of 1934.1 The OIP alleges that Can-Cal has a class of securities 

 

1 OIP at 1; see 15 U.S.C. § 78l(j).
2

registered with the Commission under Exchange Act Section 12(g).2 The OIP 

further alleges that as of June 2017, Can-Cal had not filed a periodic report 

since it filed a Form 10-Q for the period ended September 30, 2015.

3 That Form 

10-Q allegedly reported a net loss of over $150,000 for the prior nine months.

4

Based on these factual allegations, the OIP alleges that Can-Cal is delinquent 

in meeting its periodic reporting obligations and has thus violated Exchange 

Act Section 13(a) and Rules 13a-1 and 13a-13, which require issuers of 

securities registered with the Commission to file annual and quarterly reports 

with the Commission.5 

Procedural History

Can-Cal filed its answer to the OIP in July 2017, and admitted that its 

common stock is registered with the Commission under Section 12(g) but 

denied the remaining allegations, including that it was delinquent in meeting 

its reporting obligations.6 This proceeding was previously assigned to the 

Commission’s then-chief administrative law judge but before she completed 

adjudication of the proceeding, the Commission stayed it and then ordered it 

reassigned to another administrative law judge.7 Following two rounds of 

briefing before the second administrative law judge on a motion for summary 

disposition filed by the Division of Enforcement, and additional delay due to a 

lapse in governmental funding, this proceeding was reassigned to me.8 In late 

 

2 OIP at 1; see 15 U.S.C. § 78l(g). This proceeding has ended as to the other 

Respondents listed in the OIP. See China Fruits Corp., Exchange Act Release 

No. 85550, 2019 WL 1531823 (Apr. 8, 2019).

3 OIP at 1.

4 Id.

5 OIP at 2; see 15 U.S.C. § 78m(a); 17 C.F.R. §§ 240.13a-1, .13a-13.

6 Answer at 1–2.

7 See Pending Admin Proc., Securities Act of 1933 Release No. 10536, 2018 

WL 4003609 (Aug. 22, 2018); Pending Admin. Proc., Securities Act Release No.

10510, 2018 WL 3193858 (June 21, 2018).

8 See Can-Cal Res. Ltd., Admin. Proc. Rulings Release No. 6433, 2019 SEC 

LEXIS 67 (ALJ Feb. 1, 2019); Can-Cal, Admin. Proc. Rulings Release No. 6393, 

2018 SEC LEXIS 3440 (ALJ Dec. 10, 2018).
3

March 2019, I denied the Division’s motion and directed the parties to confer 

and file a proposal for the further conduct of this proceeding.9

Rather than submit a proposal, the Division moved the Commission in 

April 2019 to dismiss this proceeding.10 In its motion, the Division conceded 

that Can-Cal “became current” and had “cured the delinquencies alleged in the 

OIP.”11

In September 2019, the Commission issued an order in which it noted that 

since the Division filed its motion, Can-Cal had not filed any periodic reports, 

had reported that it could not timely file its Form 10-K for the year ended 

December 31, 2018, and had reported that as of September 2019, it lacked the 

resources to become current in meeting its filing obligations.12 The Commission 

thus requested additional briefing addressing the effect of these events on the 

Division’s motion.13

The Division declined to submit supplemental briefing and instead filed a 

“notice of withdrawal of motion to dismiss and reinstatement of motion for 

summary disposition.” In this filing, the Division stated that it was 

withdrawing its motion to dismiss, asked that I “set aside” the order denying 

its motion for summary disposition, and asked that I issue an initial decision 

revoking the registration of Can-Cal’s securities.14

For its part, Can-Cal filed a supplemental brief in which it conceded that 

earlier in the year, it lacked the “financial resources to bring its filings current 

with the” Commission.15 Based on documents attached to its brief, however, it 

 

9 Can-Cal, Admin. Proc. Rulings Release No. 6525, 2019 WL 2296498 (ALJ 

Mar. 28, 2019).

10 See Can-Cal, Exchange Act Release No. 86989, 2019 WL 4447518, at *1 

(Sept. 17, 2019).

11 Mot. to Dismiss at 2 (Apr. 5, 2019).

12 Can-Cal, 2019 WL 4447518, at *1.

13 Id.

14 Div. Notice of Withdrawal of Mot. to Dismiss at 1–2 (Oct. 1, 2019).

15 Resp’t’s Supp. Br. at 1 (Oct. 1, 2019).
4

claimed that it would soon be in a position to cure its delinquencies.16 Can-Cal 

thus asked the Commission to grant the Division’s motion to dismiss.17

After the Commission confirmed in early November 2019 that the 

proceeding was back before me, I held a telephonic prehearing conference to 

discuss how to proceed.18 During the conference, the parties tentatively agreed 

that this proceeding could be resolved without a hearing.19 The parties 

confirmed this agreement in a subsequent letter in which they proposed a 

supplemental briefing schedule and each waived the right to call witnesses.20

After I entered an order adopting the proposed schedule, the parties 

completed supplemental briefing in December 2019. 

Findings of Fact

The findings and conclusions in this initial decision are based on the 

record and on facts officially noticed under Commission Rule of Practice 323.

21

In making the findings below, I have applied preponderance of the evidence as 

the standard of proof.22 

According to its most recent filing, Can-Cal, Central Index Key No. 

1083848, is a Nevada corporation located in Red Deer, Alberta, Canada.

23 Since 

 

16 Id. at 2.

17 Id.

18 Can-Cal, Exchange Act Release No. 87492, 2019 WL 5803821, at *1 (Nov. 

7, 2019). 

19 Prehearing Tr. 5–7 (Nov. 18, 2019).

20 Joint Letter (Nov. 25, 2019).

21 17 C.F.R. § 201.323. I take official notice of Can-Cal’s periodic-reporting 

filing history and the contents of its filings as reflected on the Commission’s 

EDGAR database. See Absolute Potential, Inc., Exchange Act Release No. 

71866, 2014 WL 1338256, at *1 n.5, *3 (Apr. 4, 2014); China-Biotics, Inc., 

Exchange Act Release No. 70800, 2013 WL 5883342, at *1 n.2 (Nov. 4, 2013).

22 See Rita J. McConville, Exchange Act Release No. 51950, 2005 WL 

1560276, at *14 (June 30, 2005), pet. denied, 465 F.3d 780 (7th Cir. 2006).

23 Can-Cal Resources Ltd., Annual Report at 2, F-6 (Form 10-K) (Jan. 7, 

2020).
5

1999, it has had a class of securities registered with the Commission under 

Exchange Act Section 12(g).24

In 2014, Can-Cal shareholders filed a derivative shareholder complaint in 

a Nevada court.25 The shareholders accused Can-Cal’s management of entering 

into agreements that limited Can-Cal’s ability to profit from certain material 

on one of its properties and of keeping information from shareholders by filing 

false and misleading reports with the Commission.

26

During this time, Can-Cal began experiencing difficulty filing its periodic 

reports in a timely manner.27 It filed its annual Form 10-K for 2013—due in 

late March 2014—on May 23, 2014, and the Forms 10-Q for the first two 

quarters of 2014—due 45 days after each quarter’s end—on December 24, 

2014. Can-Cal filed the 10-Q for the third quarter in January 2015 and made 

no filings during the remainder of 2015, instead waiting until January 7, 2016, 

to file the 2014 Form 10-K and the three 10-Qs for 2015.

Can-Cal then stopped filing its periodic reports. As noted, in June 2017, 

the Commission issued the OIP that initiated this proceeding and charged 

Can-Cal with failing to comply with its reporting obligations. 

In March 2018, while this proceeding was pending, Can-Cal filed an 

annual report “[f]or the fiscal year ended December 31, 2016,” in what it said 

was a: 

comprehensive annual report which includes audited

financial statements as of December 31, 2016, 2015 and 

2014, and for the years then ended and unaudited 

financial statements as of March 31, 2016, June 30, 2016, 

September 30, 2016, March 31, 2017, June 30, 2017 and 

 

24 See Div. Supp. Br. (Feb. 13, 2019) Ex. C.

25 Sloan v. Can-Cal Res. Ltd., No. A-14-701465-B (Nev. Dist. Ct. Clark Cty. 

May 29, 2014).

26 Motion to Intervene (June 16, 2017), Ex. 1 at 1 (derivative shareholder 

complaint).

27 The OIP’s factual allegations concern Can-Cal’s failure to file periodic 

reports after the Form 10-Q for the period ended September 30, 2015. OIP at 

1. In assessing an appropriate sanction in proceedings under Section 12(j), 

however, the Commission may consider uncharged reporting failures. See 

Nature’s Sunshine Products, Inc., Exchange Act Release No. 59268, 2009 WL 

137145, at *6 n.27 (Jan. 21, 2009).
6

September 30, 2017, and for the three months ended 

March 31, 2016 and 2017, the three and six months ended 

June 30, 2016 and 2017 and the three and nine months 

ended September 30, 2016 and 2017.28

In April 2018, the Nevada district court preliminarily approved a

settlement of the shareholder litigation.29 The settlement obligated another 

entity, for at least twenty years, to purchase approximately $150,000 worth of

volcanic materials from a Can-Cal property each year.

30 The other entity was 

also obligated to pay audit fees to complete Can-Cal’s delinquent periodic 

filings for 2015 through 2017.31

After filing a Form 12b-25, explaining that it would be delayed, Can-Cal 

filed the Form 10-K for 2017 on April 11, 2018.32 And it timely filed the three 

2018 10-Qs. But it then failed to file any periodic report during 2019. On 

January 7, 2020, it filed its Form 10-K for 2018, over nine months after it was 

due.

Conclusions of Law

The issuer of a security registered with the Commission under Exchange 

Act Section 12 must file annual reports “within the period specified in” Form 

10-K.33 For issuers like Can-Cal that are not accelerated filers, Form 10-K 

specifies that annual reports are due “90 days after the end of the fiscal year 

 

28 Can-Cal Res. Ltd., Comprehensive Annual Report, at “Explanatory Note” 

(Form 10-K) (Mar. 12, 2018) (“Super 10-K”).

29 Can-Cal Supp. Docs. (July 11, 2018), Ex. 1 at 2 (district court final 

judgment and order of dismissal).

30 Can-Cal Supp. Docs. (May 22, 2018), Stipulation and Agreement of 

Settlement, Ex. A at 3–4 (Second Amended and Restated Material Supply 

Agreement).

31 Id., Stipulation at 16.

32 By regulation, a registrant that is unable to timely file a quarterly or 

annual report must file a Form 12b-25 disclosing “its inability to file the report 

timely and the reasons” for its inability to timely file the report. 17 C.F.R. 

§ 240.12b-25(a).

33 17 C.F.R. § 240.13a-1; see 15 U.S.C. § 78m(a); 17 C.F.R. § 249.310(a) 

(specifying that Form 10-K is used for annual reports filed under Section 13).
7

covered by the report.”34 And any issuer that is required to file annual reports 

must also file quarterly reports, using Form 10-Q, within “45 days after the 

end of the fiscal quarter.”35 These requirements serve to “‘protect[] ... investors 

and ... insure fair dealing’ in the [issuer’s] securities.”36 Scienter is not required 

to establish violations of Exchange Act Section 13(a) or Rules 13a-1 and 13a13.37

Because Can-Cal is the issuer of a security registered with the 

Commission under Exchange Act Section 12, it is required to timely file annual 

and quarterly reports with the Commission.38 As of June 2017, when the 

Commission issued the OIP, Can-Cal had not filed its annual reports for 2015 

or 2016, and had not filed any of its 2016 quarterly reports or its quarterly 

report for the period ended March 31, 2017. Although Can-Cal attempted to 

remedy its deficiencies in 2018 when it filed a comprehensive annual report, 

covering the periods relevant to its unfiled reports, that filing does not change 

the fact that Can-Cal failed to timely meet its reporting obligations.39 Can-Cal 

has therefore failed to comply with Exchange Act Section 13(a) and Rules 13a1 and 13a-13.

Sanctions

The Commission may, “as it deems necessary or appropriate for the 

protection of investors,” suspend for up to twelve months or revoke the 

registration of a security if it finds that the issuer of the “security has failed to 

comply with any provision of” the Exchange Act or rules thereunder.40 The 

periodic filing requirements are contained in a provision of the Exchange Act 

 

34 17 C.F.R. § 249.310(b)(3).

35 17 C.F.R. §§ 240.13a-13(a), 249.308a(a)(2).

36 China-Biotics, 2013 WL 5883342, at *10 (quoting 15 U.S.C. § 78m(a)). 

37 Advanced Life Sci. Holdings, Inc., Exchange Act Release No. 81253, 2017 

WL 3214455, at *2 (July 28, 2017).

38 15 U.S.C. § 78m(a); 17 C.F.R. §§ 240.13a-1, .13a-13(a).

39 See Calais Res. Inc., Exchange Act Release No. 67312, 2012 WL 2499349, 

at *5 (June 29, 2012) (“Our precedent ... does not support the proposition that 

the mere filing of a past due report satisfies a company’s Exchange Act 

reporting obligations.”).

40 15 U.S.C. § 78l(j) (emphasis added); Advanced Life Sci., 2017 WL 3214455, 

at *2. 
8

and rules thereunder.41 As a result, the failure to comply with the periodic 

filing requirements subjects the registration of the issuer’s securities to 

suspension or revocation.42

In determining the appropriate sanction in proceedings under Exchange 

Act Section 12(j) involving violations of Exchange Act Section 13(a) and Rules 

13a-1 and 13a-13, the Commission considers a number of factors, including 

“the seriousness of the issuer’s violations, the isolated or recurrent nature of 

the violations, the degree of culpability involved, the extent of the issuer’s 

efforts to remedy its past violations and ensure future compliance, and the 

credibility of its assurances, if any, against further violations.”43 This list of 

factors is “non-exclusive, and no single factor is dispositive.”44 With these 

factors in mind, I turn to evaluation of the appropriate sanction, if any, for 

Can-Cal’s violations.

Consideration of the Gateway factors supports revocation.

1. Can-Cal’s failures are serious.45 The periodic-reporting requirement in 

Section 13(a) is “a central provision of the Exchange Act.”46 And that

requirement exists “to supply the investing public with current, accurate 

financial information about an issuer so that investors may make informed 

decisions.”47 Indeed, periodic reports are among “the primary sources of 

information available to guide the decisions of the investing public.”

48 When 

 

41 See 15 U.S.C. § 78m(a); 17 C.F.R. §§ 240.13a-1, .13a-13(a). 

42 See Advanced Life Sci., 2017 WL 3214455, at *2–3.

43 Gateway Int’l Holdings, Inc., Exchange Act Release No. 53907, 2006 WL 

1506286, at *4 (May 31, 2006).

44 Advanced Life Sci., 2017 WL 3214455, at *3.

45 Cf. Accredited Bus. Consolidators Corp., Exchange Act Release No. 75840, 

2015 WL 5172970, at *2 (Sept. 4, 2015) (holding that failing to file “any periodic 

reports for over two years” constituted serious violations).

46 Gateway, 2006 WL 1506286, at *6.

47 Am. Stellar Energy, Inc., Exchange Act Release No. 64897, 2011 WL 

2783483, at *5 (July 18, 2011), pet. dismissed sub. nom. Tara Gold Res. Corp. 

v. SEC, 678 F.3d 557 (7th Cir. 2012). 

48 United States v. Arthur Young & Co., 465 U.S. 805, 810 (1984); see 

Absolute Potential, 2014 WL 1338256, at *8 (stating that the reporting 

“requirements are the primary tool[s] which Congress has fashioned for the 
9

an issuer fails to meet its reporting obligations, it deprives current and 

potential investors “of the ability to make informed investment decisions based 

on current and reliable information” about the issuer.49 As a result, an issuer’s 

repeated failure to meet its reporting obligations is considered “so serious that 

only a strongly compelling showing with respect to the other [Gateway] factors 

... would justify a lesser sanction than revocation.”50 

Can-Cal’s efforts over the last six years to comply with its reporting 

obligations leave much to be desired. Five of its last six annual reports were 

filed late. Its 2014 and 2018 annual reports were both filed nine months late. 

And its 2015 and 2016 reports were filed in 2018 in a single comprehensive

submission. All of its quarterly reports from 2014 through 2017 were late. And 

the 2016 and 2017 quarterly reports were not filed until 2018 in the same 

comprehensive submission that covered the 2015 and 2016 annual reports. 

Can-Cal has also many times failed to comply with the requirement to file a 

Form 12b-25 when a registrant is unable to file a Form 10-Q or 10-K.51 Worse, 

Can-Cal remains delinquent despite repeated assertions that it will become 

and remain current in its periodic reporting.

52 Can-Cal has not filed any of its 

2019 quarterly reports.

Can-Cal has thus repeatedly prevented investors from obtaining timely

“accurate financial information” that would have allowed them to “make 

 

protection of investors from negligent, careless, and deliberate 

misrepresentations in the sale of stock and securities” (internal quotation 

marks omitted; alteration in original)).

49 Accredited Bus., 2015 WL 5172970, at *2. 

50 Impax Labs., Inc., Exchange Act Release No. 57864, 2008 WL 2167956, at 

*8 (May 23, 2008).

51 See 17 C.F.R. § 240.12b-25(a). The Commission considers the failure to file 

a Form 12b-25 in cases brought under Section 12(j) when assessing sanctions. 

See Accredited Bus., 2015 WL 5172970, at *3 n.17.

52 See, e.g., Resp’t’s Supp. Br. 1–2 (Dec. 10, 2019); Resp’t’s Supp. in Support 

of Opp’n to Summary Disposition (Oct. 17, 2018); Resp’t’s Opp’n to Summary 

Disposition at 2–3 (Jan. 5, 2018).
10

informed decisions.”53 It has left investors in dark, for extended periods, about 

its financial status. Given the foregoing, Can-Cal’s violations are serious.54 

2. Can-Cal’s delinquencies are recurrent and are not isolated. With the 

exception of a four-report window in 2018, Can-Cal has not filed any report on 

time in the last six years. Many of its reports were filed at least nine months 

late. And its 2019 quarterly reports are currently outstanding.

3. Can-Cal’s failure to timely file its reports reflects a “high degree of 

culpability.”55 Can-Cal has plainly been aware of its reporting obligations, as 

reflected in the fact that it has, at times, timely filed its annual and quarterly 

reports. It has nonetheless regularly failed to meet its obligation to timely file 

periodic reports.

One of the most egregious of Can-Cal’s failures relates to its 2015 annual 

report and its 2016 quarterly reports. It filed its Super 10-K for the fiscal year 

ended December 31, 2016, as a comprehensive filing covering the omitted 

reports. But it didn’t submit its Super 10-K until March 2018, two years after 

the 2015 annual report was due, over a year after the 2016 quarterly reports 

were due, and nine months after this proceeding was initiated. All that time, 

investors lacked current and accurate financial information, which shows CanCal’s high degree of culpability.56 

 

53 Am. Stellar Energy, 2011 WL 2783483, at *5.

54 Cf. Absolute Potential, 2014 WL 1338256, at *4 (finding “serious” 

violations where issuer failed to timely file periodic reports for several years, 

despite issuer’s filing of past-due reports); China-Biotics, 2013 WL 5883342, at 

*10 (finding that a respondent’s “violations were serious, recurrent, and 

demonstrate a high degree of culpability,” where it failed to “file a single 

periodic report for more than a year and a half”); Impax Labs., 2008 WL 

2167956, at *7–8 (holding that the failure to file eight reports was serious).

55 Absolute Potential, 2014 WL 1338256, at *4; cf. Gateway, 2006 WL 

1506286, at *5 (“Gateway ... knew of its reporting obligations, yet failed to file 

a total of seven annual and quarterly reports”). 

56 When I denied summary disposition, I viewed Can-Cal’s remedial efforts, 

including its submission of a Super 10-K covering multiple Forms 10-K and 10-

Q, in the light most favorable to it. See Can-Cal, 2019 WL 2296498, at *3, *5 

n.49. At the end of the day, however, the Super 10-K does not cure the violation, 

because investors were still deprived of financial information for an extended 

period. Calais Res., 2012 WL 2499349, at *5 (“If issuers were permitted, at 

their discretion, to consolidate multiple years of annual reports into a single 
11

4. Can-Cal has not taken effective steps to remedy its past violations. 

When the Commission instituted this proceeding, Can-Cal had six outstanding 

reports, including two annual and four quarterly reports. In January 2018, it 

argued that, because it had secured funding that would “ensure [it] will not fall 

behind in its [reporting] obligations,” revocation was unwarranted.57 In 

October 2018, it submitted a supplemental filing referencing its previous 

assertions, and stating that it had, in fact, become current and complied with 

its reporting obligations.58 Indeed, Can-Cal timely filed its three quarterly 

reports for 2018. And it was in this window that I denied the Division’s motion 

for summary disposition and the Division moved the Commission to dismiss 

this proceeding.

But Can-Cal then returned to its previous pattern. It filed a Form 12b-25 

as to the 2018 annual report, but did not file the report until January 2020. 

And it has not filed any of its 2019 quarterly reports. 

5. As to the credibility of Can-Cal’s assurances against further violations, 

in two filings in 2018, and again in a filing in January 2019, Can-Cal asserted 

that it had the resources to become and remain current in meeting its filing 

obligations.59 But once the Division moved to dismiss this proceeding, it 

stopped meeting those obligations. Can-Cal now says—once again—that it has 

secured the resources necessary to “fulfill its ... filing requirements” and “has 

already engaged its auditor.”60

Because we’ve been down this road before, I do not find Can-Cal’s

assurances credible. Can-Cal claimed in January 2019 that “annual payments 

to Can-Cal of $150,000” from a third party “alone should more than adequately 

 

filing, the investing public would not be assured of the timely disclosure 

mandated by the Exchange Act.”); see Am. Stellar Energy, 2011 WL 2783483, 

at *5 (issuers have an “obligation under Rule 13a-1 to file a separate annual 

report for [each] fiscal year” (emphasis added)).

57 Resp’t’s Opp’n to Summary Disposition at 2–3 (Jan. 5, 2018).

58 Resp’t’s Supp. in Support of Opp’n to Summary Disposition (Oct. 17, 2018).

59 See id.; Resp’t’s Opp’n to Summary Disposition at 2–3 (Jan. 5, 2018); 

Resp’t’s Further Supp. in Support of Opp’n to Summary Disposition (Jan. 4, 

2019), Ex. 1 at 2.

60 Resp’t’s Supp. Br. at 1–2 (Dec. 10, 2019).
12

cover the costs to pay Can-Cal’s audit firm” to prepare necessary 

documentation for annual and quarterly reports.61 But Can-Cal still missed all 

the reports it was supposed to file in 2019. Then, in December, Can-Cal made 

a new promise: because it had just received funding from a different third 

party, it now “will bring ... its filings current.”62 But the company’s shifting 

explanations, and the fact that its three 2019 quarterly reports remain 

outstanding after years of missed and late reports cast serious doubt on its 

promises.

63 Can-Cal’s inability to remain current during the pendency of this 

proceeding shows there is little reason to think it will become and remain 

current in the future.

Can-Cal has argued that, at times, it lacked the financial resources 

necessary to comply with its filing obligations.

64 Can-Cal’s lack of financial 

resources is not mitigating. The obligation to timely file quarterly and annual 

reports is mandatory and not a requirement issuers may choose to meet when 

it is convenient.65 And the fact an issuer is financially unable to comply with 

its filing requirements is information to which current and potential investors 

are entitled.66

Finally, Can-Cal has also claimed that it stopped filing reports because 

representations made in its filings could have been used by its shareholders in 

their suit against the company.67 Can-Cal’s assertion demonstrates a 

 

61 Resp’t’s Second Further Supp. in Support of Opp’n to Summary 

Disposition (Jan. 4, 2019), Ex. 1 at 2.

62 Resp’t’s Supp. Br. at 1–2 (Dec. 10, 2019).

63 Cf. Alra Labs., Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995) (“An agency 

rationally may conclude that past performance is the best predictor of future 

performance.”).

64 See, e.g., Resp’t’s Supp. Br. at 1 (Dec. 10, 2019); Resp’t’s Opp’n to Summary 

Disposition at 2 (Jan. 5, 2018).

65 See Am. Sports Voice, Inc., Exchange Act Release No. 55511, 2007 WL 

858747, at *3–4 & n.16 (Mar. 22, 2007).

66 See Tara Gold, 678 F.3d at 558 (stating that a firm’s “[in]ability to pay an 

auditor to certify ... financial statements” is “something investors surely would 

want to know”).

67 Resp’t’s Second Further Supp. in Support of Opp’n to Summary 

Disposition (Jan. 4, 2019), Ex. 1 at 2.
13

problematic attitude toward compliance with its reporting obligations.68

Withholding accurate financial information from investors as a litigating tactic 

is contrary to the notion of disclosure which lies at the heart of the securities 

laws.

For the reasons described above, I find that Can-Cal has not made a 

“strongly compelling showing ... [that] would justify a lesser sanction than 

revocation.”69 I therefore find it necessary and appropriate for the protection of 

investors to revoke the registration of each class of Can-Cal’s registered 

securities.

Order

I ORDER that, under Section 12(j) of the Securities Exchange Act of 1934, 

the registration of each class of registered securities of Can-Cal Resources Ltd.

is hereby REVOKED.70

This initial decision will become effective in accordance with and subject 

to the provisions of Rule 360.71 Under that rule, a party may file a petition for 

review of this initial decision within 21 days after service of the initial decision. 

Under Rule of Practice 111, a party may also file a motion to correct a manifest 

error of fact within ten days of the initial decision.72 If a motion to correct a 

manifest error of fact is filed by a party, then a party has 21 days to file a 

petition for review from the date of the order resolving such motion to correct 

a manifest error of fact. 

 

68 See Am. Sports Voice, 2007 WL 858747, at *4 (compliance “may not be 

subject to conditions from the registrant”); Cobalis Corp., Exchange Act 

Release No. 64813, 2011 WL 2644158, at *6 (July 6, 2011) (“reject[ing] the 

argument that an issuer cannot be held accountable for filing delinquencies if 

the delinquencies resulted from the actions of a third party”).

69 Impax Labs., 2008 WL 2167956, at *8; cf. Am. Stellar Energy, 2011 WL 

2783483, at *5 (“Tara Gold’s continued delinquency indicates that it has not 

made the ‘strongly compelling showing’ necessary under Gateway to justify a 

lesser sanction than revocation.”).

70 This order applies to all classes of Can-Cal’s securities registered under 

Section 12 of the Exchange Act, whether or not such securities are specifically 

identified by ticker symbol or otherwise in this initial decision.

71 See 17 C.F.R. § 201.360. 

72 See 17 C.F.R. § 201.111. 
14

The initial decision will not become final until the Commission enters an 

order of finality. The Commission will enter an order of finality unless a party 

files a petition for review or motion to correct a manifest error of fact or the 

Commission determines on its own initiative to review the initial decision as 

to a party. If any of these events occur, the initial decision will not become final 

as to that party.

_______________________________

James E. Grimes

Administrative Law Judge