The Securities Commission granted an exemption to an issuer from the requirement to include prospectus-level disclosure in an information circular related to an amalgamation, as well as from the requirement that financial statements be accompanied by an auditor’s report expressing an unmodified opinion.
Key Facts:
– The issuer is involved in an amalgamation with Volatus Aerospace Corp.
– The issuer is required to provide historical financial statements for a business it is acquiring, which is difficult due to unavailable information and personnel.
– Alternate financial information will be provided instead.
– The auditor’s report for the acquired business’s financial statements will contain a qualification related to opening inventory quantities.
Reasoning:
– It is extremely difficult, if not impossible, to prepare the required historical financial statements for the acquired business.
– The issuer will provide sufficient information for shareholders to assess the transaction.
– The auditor’s report will be unmodified except for the qualification related to inventory, which affects financial performance and cash flows.
Outcome:
– The issuer is exempt from including certain predecessor financial statements in the management information circular.
– The issuer is exempt from the requirement that the auditor’s report must express an unmodified opinion.
Relevant Laws and Regulations:
– National Instrument 51-102 Continuous Disclosure Obligations, specifically section 14.2 of Form 51-102F5 Information Circular.
– National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, specifically subsections 3.3(1)(a) and 5.1.
Conditions:
– The information circular must be filed and mailed by a specified date.
– The circular must include the alternate financial information.
– The circular must comply with other legislative requirements.