The Securities Commission has granted an issuer, which is not yet an SEC issuer but anticipates becoming one, exemptions from certain Canadian financial reporting requirements. The issuer has filed a registration statement with the SEC and, if it becomes effective, will be classified as an SEC issuer. The exemptions allow the issuer to:
1. Prepare its annual financial statements for the year ended December 31, 2021, and interim financial statements for the period ended March 31, 2022, in accordance with U.S. GAAP instead of Canadian GAAP.
2. Have its financial statements audited in accordance with U.S. PCAOB GAAS rather than Canadian GAAS.
3. File its management’s discussion and analysis (MD&A) in accordance with U.S. standards as opposed to the Canadian Form 51-102F1.
The exemptions are contingent on the issuer becoming an SEC issuer by August 29, 2022. If it does not achieve this status by the specified date, the issuer must re-file its financial statements and MD&A in accordance with Canadian standards and issue a news release explaining the nature and purpose of these amended documents.
The decision is based on the issuer’s representations, including its status as a reporting issuer in Canada, its operations in U.S. state-licensed cannabis facilities, and its securities trading on the Canadian Securities Exchange and in the U.S.
The exemptions are granted under the following regulations:
– National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, sections 3.2, 3.3, and 5.1.
– National Instrument 51-102 Continuous Disclosure Obligations, sections 5(1) and 13.1.
The Alberta Securities Commission is the principal regulator for this application, and the decision also applies to Ontario and is intended to be relied upon in other Canadian jurisdictions under Multilateral Instrument 11-102 Passport System.