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National Instrument 44-101 Short Form Prospectus Distributions

National Instrument 44-101 Short Form Prospectus Distributions
Part 1 Definitions and Interpretations
Section 1.1 Definitions

current annual financial statements

In this Instrument

“current annual financial statements” means,

(a) if the issuer has filed its comparative annual financial statements in accordance with the applicable CD rule for its most recently completed financial year, those financial statements together with the auditor’s report accompanying the financial statements and, if there has been a change of auditors since the comparative period, an auditor’s report on the financial statements for the comparative period, or

(b) the issuer’s comparative annual financial statements filed for the financial year immediately preceding its most recently completed financial year, together with the auditor’s report accompanying the financial statements and, if there has been a change of auditors since the comparative period, an auditor’s report on the financial statements for the comparative period if

(i) the issuer has not filed its comparative annual financial statements for its most recently completed financial year, and

(ii) the issuer is not yet required under the applicable CD rule to have filed its annual financial statements for its most recently completed financial year;

National Instrument 44-101 Short Form Prospectus Distributions
Part 1 Definitions and Interpretations
Section 1.1 Definitions

successor issuer

In this Instrument “successor issuer” means

(a) except for an issuer which, in the case where the restructuring transaction involved a divestiture of a portion of a reporting issuer’s business, succeeded to or otherwise acquired less than substantially all of the business divested, an issuer that meets any of the following requirements:

(i) it was a reverse takeover acquiree in a completed reverse takeover;

(ii) it was formed as a result of a completed restructuring transaction;

(iii) it participated in a restructuring transaction and its existence continued following the completion of the restructuring transaction; or

(b) an issuer that issued securities to the securityholders of a second issuer that was a reporting issuer, in a reorganization that did not alter those securityholders’ proportionate interest in the second issuer or the second issuer’s proportionate interest in its assets;

National Instrument 44-101 Short Form Prospectus Distributions
Part 1 Definitions and Interpretations
Section 1.1 Definitions

U.S. credit supporter

In this Instrument

“U.S. credit supporter” means a credit supporter that

(a) is incorporated or organized under the laws of the United States of America or any state or territory of the United States of America or the District of Columbia,

(b) either

(i) has a class of securities registered under section 12(b) or section 12(g) of the 1934 Act, or

(ii) is required to file reports under section 15(d) of the 1934 Act,

(c) has filed with the SEC all 1934 Act filings for a period of 12 calendar months immediately before the filing of the preliminary short form prospectus,

(d) is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States of America, and

(e) is not a commodity pool issuer as defined in National Instrument 71-101 The Multijurisdictional Disclosure System.

National Instrument 44-101 Short Form Prospectus Distributions
Part 2 Qualification to File a Prospectus in The Form of a Short Form Prospectus
Section 2.2

Basic Qualification Criteria

An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of any of its securities in the local jurisdiction, if the following criteria are satisfied:

… (d) the issuer has, in at least one jurisdiction in which it is a reporting issuer,

(i) current annual financial statements…

National Instrument 44-101 Short Form Prospectus Distributions
Part 2 Qualification to File a Prospectus in The Form of a Short Form Prospectus
Section 2.3

Alternative Qualification Criteria for Issuers of Designated Rating Non-Convertible Securities

(1) An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of non-convertible securities in the local jurisdiction, if the following criteria are satisfied:

… (d) the issuer has, in at least one jurisdiction in which it is a reporting issuer,

(i) current annual financial statements…

National Instrument 44-101 Short Form Prospectus Distributions
Part 2 Qualification to File a Prospectus in The Form of a Short Form Prospectus
Section 2.4

Alternative Qualification Criteria for Issuers of Guaranteed Non-Convertible Debt Securities, Preferred Shares and Cash Settled Derivatives

(1) An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of non-convertible debt securities, non-convertible preferred shares or non-convertible cash settled derivatives in the local jurisdiction, if the following criteria are satisfied:

…(b) at least one of the following is true:

(i) the credit supporter satisfies the criteria in paragraphs 2.2(a), (b), (c) and (d) if the word “issuer” is replaced with “credit supporter” wherever it occurs;

(ii) the credit supporter is a U.S. credit supporter and the issuer is incorporated or organized under the laws of Canada or a jurisdiction of Canada;

National Instrument 44-101 Short Form Prospectus Distributions
Part 2 Qualification to File a Prospectus in The Form of a Short Form Prospectus
Section 2.5

Alternative Qualification Criteria for Issuers of Guaranteed Convertible Debt Securities or Preferred Shares

An issuer is qualified to file a prospectus in the form of a short form prospectus for a distribution of convertible debt securities or convertible preferred shares in the local jurisdiction, if the following criteria are satisfied:

(a) the debt securities or the preferred shares are convertible into securities of a credit supporter that has provided full and unconditional credit support for the securities being distributed;

(b) the credit supporter satisfies the criteria in section 2.2 if the word issuer” is replaced with “credit supporter” wherever it occurs.”

National Instrument 44-101 Short Form Prospectus Distributions
Part 2 Qualification to File a Prospectus in The Form of a Short Form Prospectus
Section 2.6

Alternative Qualification Criteria for Issuers of Asset-Backed Securities

(1) An issuer established in connection with a distribution of asset-backed securities is qualified to file a prospectus in the form of a short form prospectus for a distribution of asset-backed securities in the local jurisdiction, if the following criteria are satisfied:

… (b) the issuer has, in at least one jurisdiction of Canada,

(i) current annual financial statements…

National Instrument 44-101 Short Form Prospectus Distributions
Part 2 Qualification to File a Prospectus in The Form of a Short Form Prospectus
Section 2.7

Exemptions for Reporting Issuers that Previously Filed a Prospectus and Successor Issuers

(1) Paragraphs 2.2(d), 2.3(1)(d) and 2.6(1)(b) do not apply to an issuer if

(a) the issuer is not exempt from the requirement in the applicable CD rule to file annual financial statements within a prescribed period after its financial year end, but the issuer has not yet been required under the applicable CD rule to file any annual financial statements, and

(b) unless the issuer is seeking qualification under section 2.6, the issuer has filed and obtained a receipt for a final prospectus that included the issuer’s or each predecessor entity’s comparative annual financial statements for its most recently completed financial year or the financial year immediately preceding its most recently completed financial year, together with the auditor’s report accompanying those financial statements and, if there has been a change of auditors since the comparative period, an auditor’s report on the financial statements for the comparative period.

(2) Paragraphs 2.2(d), 2.3(1)(d) and 2.6(1)(b) do not apply to a successor issuer if

(a) the successor issuer is not exempt from the requirement in the applicable CD rule to file annual financial statements within a prescribed period after its financial year end, but the successor issuer has not yet, since the completion of the restructuring transaction or the reorganization described in paragraph

(b) of the definition of “successor issuer”

National Instrument 44-101 Short Form Prospectus Distributions
Part 3 Deemed Incorporation by Reference
Section 3.1

Deemed Incorporation by Reference of Filed Documents

If an issuer does not incorporate by reference in its short form prospectus a document required to be incorporated by reference under section 11.1 or 12.1 of Form 44-101F1, the document is deemed for purposes of securities legislation to be incorporated by reference in the issuer’s short form prospectus as of the date of the short form prospectus to the extent not otherwise modified or superseded by a statement contained in the short form prospectus or in any other subsequently filed document that also is, or is deemed to be, incorporated by reference in the short form prospectus.

National Instrument 44-101 Short Form Prospectus Distributions
Part 3 Deemed Incorporation by Reference
Section 3.2

Deemed Incorporation by Reference of Subsequently Filed Documents

If an issuer does not incorporate by reference in its short form prospectus a subsequently filed document required to be incorporated by reference under section 11.2 or 12.1 of Form 44-101F1, the document is deemed for purposes of securities legislation to be incorporated by reference in the issuer’s short form prospectus as of the date the issuer filed the document to the extent not otherwise modified or superseded by a statement contained in the short form prospectus or in any other subsequently filed document that also is, or is deemed to be, incorporated by reference in the short form prospectus.

National Instrument 44-101 Short Form Prospectus Distributions
Part 4 Filing Requirements for a Short Form Prospectus
Section 4.1

Required Documents for Filing a Preliminary Short Form Prospectus

(1) An issuer that files a preliminary short form prospectus shall

(a) file the following with the preliminary short form prospectus:

… (iii) Material Incorporated by Reference – copies of all material incorporated by reference in the preliminary short form prospectus and not previously filed;

(vi) Reports and Valuations – a copy of each report or valuation referred to in the preliminary short form prospectus for which a consent is required to be filed under section 10.1 of NI 41-101 and that has not previously been filed, other than a technical report that

(A) deals with a mineral project or oil and gas activities, and

(B) is not otherwise required to be filed under paragraph (v);

…(b) deliver to the regulator, concurrently with the filing of the preliminary short form prospectus, the following:

… (ii) Auditor’s Comfort Letter Regarding Audited Financial Statements – if a financial statement of an issuer or a business included in, or incorporated by reference into, a preliminary short form prospectus is accompanied by an unsigned auditor’s report, a signed letter addressed to the regulator from the auditor of the issuer or of the business, as applicable, prepared in accordance with the form suggested for this circumstance in the Handbook; and

National Instrument 44-101 Short Form Prospectus Distributions
Part 4 Filing Requirements for a Short Form Prospectus
Section 4.2

Required Documents for Filing a Short Form Prospectus

An issuer that files a short form prospectus shall

(a) file the following with the short form prospectus:

… (ii) Material Incorporated by Reference – copies of all material incorporated by reference in the short form prospectus and not previously filed;

… (iv) Other Reports and Valuations – a copy of any report or valuation referred to in the short form prospectus, for which a consent is required to be filed under section 10.1 of NI 41-101 and that has not previously been filed, other than a technical report that

(A) deals with a mineral project or oil and gas activities of the issuer, and

(B) is not otherwise required to be filed under subparagraph 4.1(a)(v) or (vi);

… (vii) Expert’s Consents – the consents required to be filed under section 10.1 of NI 41-101; …

(b) deliver to the regulator, no later than the filing of the short form prospectus,

National Instrument 44-101 Short Form Prospectus Distributions
Part 4 Filing Requirements for a Short Form Prospectus
Section 4.3

Review of Unaudited Financial Statements

(1) Subject to subsection (2), any unaudited financial statements, other than pro forma financial statements, included in, or incorporated by reference into, a short form prospectus must have been reviewed in accordance with the relevant standards set out in the Handbook for a review of financial statements by the person or company’s auditor or a public accountant’s review of financial statements.

(2) If NI 52-107 permits the financial statements of the person or company in subsection (1) to be audited in accordance with

(a) U.S. AICPA GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the American Institute of Certified Public Accountants,

(a.1) U.S. PCAOB GAAS, the unaudited financial statements may be reviewed in accordance with the review standards issued by the Public Company Accounting Oversight Board (United States of America),

(b) International Standards on Auditing, the unaudited financial statements may be reviewed in accordance with International Standards on Review Engagement issued by the International Auditing and Assurance Standards Board, or

(c) auditing standards that meet the foreign disclosure requirements of the designated foreign jurisdiction to which the issuer is subject, the unaudited financial statements

(i) may be reviewed in accordance with review standards that meet the foreign disclosure requirements of the designated foreign jurisdiction, or

(ii) do not have to be reviewed if

(A) the designated foreign jurisdiction does not have review standards for unaudited financial statements, and

(B) the short form prospectus includes disclosure that the unaudited financial statements have not been reviewed.