The Securities Commission granted an exemption to a capital pool company (CPC) from certain financial reporting requirements in connection with a reverse take-over (RTO) transaction with a target company. The CPC sought relief from the obligation to file historical audited financial statements for certain predecessor entities of the target company, as mandated by 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.
The CPC, listed on the TSX Venture Exchange (TSXV), was in the process of completing its Qualifying Transaction under TSXV Policy 2.4 with the target company, which operates in the esports industry. The target company had previously acquired several entities, including MediaXP, MAD Lions S.L. assets, and Splyce, which were not material to the issuer.
The Commission determined that the financial statements of the target company, including consolidated results of the acquired entities post-acquisition, along with other required disclosures, would provide sufficient information for investors to assess the business following the RTO. Therefore, the Commission granted the exemption, subject to the condition that the CPC’s Filing Statement includes the target company’s audited consolidated financial statements for specified periods and is filed on SEDAR immediately after TSXV acceptance.
The decision was based on the legislation and regulations governing securities in Ontario, Alberta, and British Columbia, specifically referencing National Instrument 51-102, Form 51-102F3, and related policies.