The Securities Commission has granted an exemption to a capital pool company (the issuer) from certain financial reporting requirements in connection with a reverse take-over transaction with a target company. This transaction will serve as the issuer’s qualifying transaction under Policy 2.4 Capital Pool Companies of the TSX Venture Exchange (TSXV).
The issuer sought relief from section 4.10(2)(a)(ii) of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and Item 5.2 of Form 51-102F3 Material Change Report. This would exempt the issuer from filing historical audited financial statements of a predecessor entity that are not material to the issuer.
The decision was based on several representations, including the issuer’s status as a capital pool company, the target company’s business activities, and the proposed reverse take-over transaction that would result in the issuer acquiring all issued and outstanding common shares of the target company. The target company is not a reporting issuer, and its principal business activity has been related to an option agreement for a property known as the FAD Property.
The exemption was granted on the condition that the issuer’s filing statement includes specific financial information about the target company and that this statement is filed on the System for Electronic Document Analysis and Retrieval (SEDAR) immediately following acceptance by the TSXV.
The decision was made under the authority of National Instrument 51-102 Continuous Disclosure Obligations, specifically section 4.10(2)(a)(ii), and Item 5.2 of Form 51-102F3 Material Change Report, and was informed by the issuer’s representations and the applicable securities legislation.