The Securities Commission has granted Lithium Americas Corp. (the Filer) an exemption from the requirement that financial statements be audited in accordance with Canadian Generally Accepted Auditing Standards (Canadian GAAS). The Filer, a mineral exploration and development company listed on the Toronto and New York Stock Exchanges, is planning to spin off its North American business into a new company, SpinCo, through a plan of arrangement.
The exemption allows the Filer to provide financial statements in its management information circular that are audited in accordance with U.S. Public Company Accounting Oversight Board (PCAOB) GAAS instead of Canadian GAAS. This is because SpinCo is in the process of becoming listed on the TSX and NYSE and has submitted a registration statement to the SEC, which requires financial statements to be audited in accordance with U.S. PCAOB GAAS.
The exemption is conditional on SpinCo becoming an SEC Issuer by the time of the spin-off’s completion. If SpinCo does not become an SEC Issuer, the Filer and SpinCo must re-file the financial statements audited in accordance with Canadian GAAS and issue a news release explaining the re-filings.
The decision is based on National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, specifically sections 3.3 and 3.8(1), and is subject to the conditions outlined above. The British Columbia Securities Commission is the principal regulator, and the decision also applies to Ontario and other Canadian jurisdictions under Multilateral Instrument 11-102 Passport System.