The Securities Commission granted Chorus Aviation Inc. (the Filer) an exemption from the requirement to include certain financial statements in its Business Acquisition Report (BAR) as mandated by section 8.4 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and Item 3 of Form 51-102F4. This exemption pertains to the financial statements related to the acquisition of DB AVO US LLC and certain Trust Interests, which the Filer could not provide due to the lack of historical financial records prepared in accordance with Generally Accepted Accounting Principles (GAAP).
The Filer, a reporting issuer in all Canadian provinces and territories, completed a significant acquisition of Falko Regional Aircraft and associated entities, which triggered the BAR filing requirement. However, the Filer argued that it was impracticable to prepare the required financial statements for DB AVO US LLC and the Trust Interests, as they had never been prepared in accordance with GAAP, and no relevant laws mandated their preparation. Additionally, the Filer contended that these financial statements were not material to its investment decision or to potential investors’ understanding of the acquisition.
The Securities Commission, upon reviewing the Filer’s application and considering the lack of materiality of the missing financial statements, determined that granting the exemption would not be prejudicial to the public interest. Consequently, the exemption was granted, allowing the Filer to omit the specified financial statements from its BAR. This decision was made under the authority of section 13.1 of NI 51-102 by the Nova Scotia Securities Commission, acting as the principal regulator, and was also representative of the decision of the securities regulatory authority in Ontario. The decision was made in accordance with the Multilateral Instrument 11-102 Passport System and National Instrument 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.