Unofficial Consolidation: Form 41-101F1 Information Required in a Prospectus

Unofficial Consolidation: Form 41-101F1 Information Required in a Prospectus

Forms

Ontario Securities Commission

Form 41-101F1

Unofficial consolidation current to 2015-11-17

This document is not an official statement of law or policy and should be used for reference purposes only.

Form 41-101F1
INFORMATION REQUIRED IN A PROSPECTUS

Contents

GENERAL INSTRUCTIONS

ITEM 1: Cover Page Disclosure

Required statement

Preliminary prospectus disclosure

Basic disclosure about the distribution

Distribution

Offering price in currency other than Canadian dollar

Non-fixed price distributions

Pricing disclosure

Reduced price distributions

Market for securities

Risk factors

Underwriter(s)

Enforcement of judgments against foreign persons or companies

Restricted securities

Earnings coverage

ITEM 2: Table of Contents

Table of contents

ITEM 3: Summary of Prospectus

General

Cautionary language

ITEM 4: Corporate Structure

Name, address and incorporation

Intercorporate relationships

ITEM 5: Describe the Business

Describe the business

History

Issuers with asset-backed securities outstanding

Issuers with mineral projects

Issuers with oil and gas operations

ITEM 6: Use of Proceeds

Proceeds

Junior issuers

Principal purposes – generally

Principal purposes – indebtedness

Principal purposes – asset acquisition

Principal purposes – insiders, etc.

Principal purposes – research and development

Business objectives and milestones

Unallocated funds in trust or escrow

Other sources of funding

Financing by special warrants, etc.

ITEM 7: Dividends or Distributions

Dividends or distributions

ITEM 8: Management's Discussion and Analysis

Interpretation

MD&A

[Repealed]

Disclosure of outstanding security data

More recent financial information

Additional disclosure for venture issuers or IPO venture issuers without significant revenue

Additional disclosure for junior issuers

Additional disclosure for issuers with significant equity investees

ITEM 9: Earnings Coverage Ratios

Earnings coverage ratios

ITEM 10: Description of the Securities Distributed

Equity securities

Debt securities

Asset-backed securities

Derivatives

Special warrants, etc.

Restricted securities

Other securities

Modification of terms

Ratings

Other attributes

ITEM 11: Consolidated Capitalization

Consolidated capitalization

ITEM 12: Options to Purchase Securities

Options to purchase securities

ITEM 13: Prior Sales

Prior sales

Trading price and volume

ITEM 14: Escrowed Securities and Securities Subject to Contractual Restriction on Transfer

Escrowed securities and securities subject to contractual restriction on transfer

ITEM 15: Principal Securityholders and Selling Securityholders

Principal securityholders and selling securityholders

ITEM 16: Directors and Executive Officers

Name, occupation and security holding

Cease trade orders, bankruptcies, penalties or sanctions

Conflicts of interest

Management of junior issuers

ITEM 17: Executive Compensation

Disclosure

ITEM 18: Indebtedness of Directors and Executive Officers

Aggregate indebtedness

Indebtedness of directors and executive officers under securities purchase and other programs

ITEM 19: Audit Committees and Corporate Governance

Audit committees

Corporate governance

ITEM 20: Plan of Distribution

Name of underwriters

Disclosure of conditions to underwriters' obligations

Best efforts offering

Minimum distribution

Determination of price

Stabilization

Approvals

Reduced price distributions

Listing application

Conditional listing approval

IPO venture issuers

Constraints

Special warrants acquired by underwriters or agents

ITEM 21: Risk Factors

Risk factors

ITEM 22: Promoters

Promoters

ITEM 23: Legal Proceedings and Regulatory Actions

Legal proceedings

Regulatory actions

ITEM 24: Interests of Management and Others in Material Transactions

Interests of management and others in material transactions

Underwriting discounts

ITEM 25: Relationship Between Issuer or Selling Securityholder and Underwriter

Relationship between issuer or selling securityholder and underwriter

ITEM 26: Auditors, Transfer Agents and Registrars

Auditors

Auditor that was not a participating audit firm

Transfer agents, registrars, trustees or other agents

ITEM 27: Material Contracts

Material contracts

ITEM 28: Experts

Names of experts

Interest of experts

ITEM 29: Other Material Facts

Other material facts

ITEM 30: Rights of Withdrawal and Rescission

General

Non-fixed price offerings

Convertible, exchangeable or exercisable securities

ITEM 31: List of Exemptions from Instrument

List of exemptions from Instrument

ITEM 32: Financial Statement Disclosure for Issuers

Interpretation of "issuer"

Annual financial statements

Interim financial report

Exceptions to financial statement requirements

Exceptions to audit requirement

Additional financial statements or financial information filed or released

Pro forma financial statements for an acquisition

Pro forma financial statements for multiple acquisitions

Exemption from financial statement disclosure for oil & gas acquisitions

ITEM 33: Credit Supporter Disclosure, Including Financial Statements

Credit supporter disclosure, including financial statements

ITEM 34: Exemptions for Certain Issues of Guaranteed Securities

Definitions and interpretation

Issuer is wholly-owned subsidiary of parent credit supporter

Issuer is wholly-owned subsidiary of, and one or more subsidiary credit supporters controlled by, parent credit supporter

One or more credit supporters controlled by issuer

ITEM 35: Significant Acquisitions

Application and definitions

Completed acquisitions for which issuer has filed business acquisition report

Completed acquisitions for which issuer has not filed business acquisition report because issuer was not reporting issuer on acquisition date

Financial performance consolidated in financial statements of issuer

Recently completed acquisitions

Probable acquisitions

Pro forma financial statements for multiple acquisitions

Additional financial statements or financial information of business filed or released

ITEM 36: Probable Reverse Takeovers

Probable reverse takeovers

ITEM 36A: Marketing Materials

Marketing materials

ITEM 37: Certificates

Certificates

Issuer certificate form

Underwriter certificate form

Amendments

Non-offering prospectuses

Marketing materials

ITEM 38: Transition

Interim financial report

Asset-backed securities

 

 

GENERAL INSTRUCTIONS

(1)          The objective of the prospectus is to provide information concerning the issuer that an investor needs in order to make an informed investment decision. This Form sets out specific disclosure requirements that are in addition to the general requirement under securities legislation to provide full, true and plain disclosure of all material facts relating to the securities to be distributed. Certain rules of specific application impose prospectus disclosure obligations in addition to those described in this Form.

(2)          Terms used and not defined in this Form that are defined or interpreted in the Instrument bear that definition or interpretation. Other definitions are set out in NI 14-101.

(3)          In determining the degree of detail required, a standard of materiality must be applied. Materiality is a matter of judgment in the particular circumstance, and is determined in relation to an item's significance to investors, analysts and other users of the information. An item of information, or an aggregate of items, is considered material if it is probable that its omission or misstatement would influence or change an investment decision with respect to the issuer's securities. In determining whether information is material, take into account both quantitative and qualitative factors. The potential significance of items must be considered individually rather than on a net basis, if the items have an offsetting effect.

(4)          Unless an item specifically requires disclosure only in the preliminary prospectus, the disclosure requirements set out in this Form apply to both the preliminary prospectus and the prospectus. Details concerning the price and other matters dependent upon or relating to price, such as the number of securities being distributed, may be left out of the preliminary prospectus, along with specifics concerning the plan of distribution, to the extent that these matters have not been decided.

(5)          The disclosure must be understandable to readers and presented in an easy-to-read format. The presentation of information should comply with the plain language principles listed in section 4.1 of Companion Policy 41-101CP General Prospectus Requirements. If technical terms are required, clear and concise explanations should be included.

(6)          No reference need be made to inapplicable items and, unless otherwise required in this Form, negative answers to items may be omitted.

(7)          Where the term "issuer" is used, it may be necessary, in order to meet the requirement for full, true and plain disclosure of all material facts, to also include disclosure with respect to persons or companies that the issuer is required, under the issuer's GAAP, to consolidate, proportionately consolidate or account for using the equity method (for example, including "subsidiaries" as that term is used in Canadian GAAP applicable to publicly accountable enterprises). If it is more likely than not that a person or company will become an entity that the issuer will be required, under the issuer's GAAP, to consolidate, proportionately consolidate or account for using the equity method, it may be necessary to also include disclosure with respect to the person or company.

(8)          An issuer that is a special purpose entity may have to modify the disclosure items to reflect the special purpose nature of its business.

(9)          If disclosure is required as of a specific date and there has been a material change or change that is otherwise significant in the required information subsequent to that date, present the information as of the date of the change or a date subsequent to the change instead.

(10)        If an issuer discloses financial information in a preliminary prospectus or prospectus in a currency other than the Canadian dollar, prominently display the presentation currency.

(11)        Except as otherwise required or permitted, include information in a narrative form. The issuer may include graphs, photographs, maps, artwork or other forms of illustration, if relevant to the business of the issuer or the distribution and not misleading. Include descriptive headings. Except for information that appears in a summary, information required under more than one Item need not be repeated.

(12)        Certain requirements in this Form make reference to requirements in another instrument or form. Unless this Form states otherwise, issuers must also follow the instruction or requirement in the other instrument or form. These references include references to Form 51-102F2. Venture issuers must include such disclosure in a preliminary prospectus or prospectus even if they are not otherwise required to file an annual information form under NI 51-102 (13) Wherever this Form uses the word "subsidiary", the term includes companies and other types of business organizations such as partnerships, trusts and other unincorporated business entities.

(14)        Where requirements in this Form make reference to, or are substantially similar to, requirements in Form 51-102F2, issuers may apply the general provision in subpart 1(d) of Form 51-102F2. However, issuers must supplement this disclosure if the supplemented disclosure is necessary to ensure that the prospectus provides full, true and plain disclosure of all material facts related to the securities to be distributed as required under Item 29 of this Form.

(15)        Forward-looking information, as defined in NI 51-102, included in a prospectus must comply with section 4A.2 of NI 51-102 and must include the disclosure described in section 4A.3 of NI 51-102. In addition to the foregoing, FOFI or a financial outlook, each as defined in NI 51-102, included in a prospectus must comply with Part 4B of NI 51-102. If the forward-looking information relates to an issuer or other entity that is not a reporting issuer in any jurisdiction, section 4A.2, section 4A.3 and Part 4B of NI 51-102 apply as if the issuer or other entity were a reporting issuer in at least one jurisdiction.

(16)        Marketing materials prepared in accordance with subsections 13.7(1) or 13.8(1) of the Instrument are the only documents that can be incorporated by reference into a long form prospectus.

ITEM 1: Cover Page Disclosure

Required statement

1.1         State in italics at the top of the cover page the following:

"No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise."

Preliminary prospectus disclosure

1.2         Every preliminary prospectus must have printed in red ink and in italics at the top of the cover page immediately above the disclosure required under section 1.1 the following, with the bracketed information completed:

"A copy of this preliminary prospectus has been filed with the securities regulatory authority(ies) in [each of/certain of the provinces/provinces and territories of Canada] but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authority(ies)."

INSTRUCTION

Issuers must complete the bracketed information by

    1. inserting the names of each jurisdiction in which the issuer intends to offer securities under the prospectus,
    2. stating that the filing has been made in each of the provinces of Canada or each of the provinces and territories of Canada, or
    3. identifying the filing jurisdictions by exception (i.e., every province of Canada or every province and territory of Canada, except [excluded jurisdictions]).

Basic disclosure about the distribution

1.3         State the following immediately below the disclosure required under sections 1.1 and 1.2 with the bracketed information completed:

"[PRELIMINARY] PROSPECTUS

[INITIAL PUBLIC OFFERING OR NEW ISSUE AND/OR SECONDARY OFFERING]

[(Date)]

[Name of Issuer]

[number and type of securities qualified for distribution under the prospectus, including any options or warrants, and the price per security]"

Distribution

1.4 (1)    If the securities are being distributed for cash, provide the information called for below, in substantially the following tabular form or in a note to the table:

 

Price to public
(a)

Underwriting discounts or commission
(b)

Proceeds to issuer or selling securityholders
(c)

Per Security

 

 

 

Total

 

 

 

(2)          Describe the terms of any over-allotment option or any option to increase the size of the distribution before closing.

(2.1)       If there may be an over-allocation position provide the following disclosure:

“A purchaser who acquires [insert type of securities qualified for distribution under the prospectus] forming part of the underwriters’ over-allocation position acquires those securities under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the over-allotment option or secondary market purchases”.

(3)          If the distribution of the securities is to be on a best efforts basis, and a minimum offering amount

    1. is required for the issuer to achieve one or more of the purposes of the offering, provide totals for both the minimum and maximum offering amount, or
    2. is not required for the issuer to achieve any of the purposes of the offering, state the following in boldface type:

“No minimum amount of funds must be raised under this offering. This means that the issuer could complete this offering after raising only a small proportion of the offering amount set out above.”

(4)          If a minimum subscription amount is required from each subscriber, provide details of the minimum subscription requirements in the table required under subsection (1).

(5)          If debt securities are being distributed at a premium or a discount, state in boldface type the effective yield if held to maturity.

(6)          Disclose separately those securities that are underwritten, those under option and those to be sold on a best efforts basis, and, in the case of a best efforts distribution, the latest date that the distribution is to remain open.

(7)          In column (b) of the table, disclose only commissions paid or payable in cash by the issuer or selling securityholder and discounts granted. Set out in a note to the table

    1. commissions or other consideration paid or payable by persons or companies other than the issuer or selling securityholder,
    2. consideration other than discounts granted and cash paid or payable by the issuer or selling securityholder, including warrants and options, and
    3. any finder's fees or similar required payment.

(8)          If a security is being distributed for the account of a selling securityholder, state the name of the securityholder and a cross-reference to the applicable section in the prospectus where further information about the selling securityholder is provided. State the portion of the expenses of the distribution to be borne by the selling securityholder and, if none of the expenses of the distribution are being borne by the selling securityholder, include a statement to that effect and discuss the reason why this is the case.

INSTRUCTIONS

(1)          Estimate amounts, if necessary. For non-fixed price distributions that are being made on a best efforts basis, disclosure of the information called for by the table may be set forth as a percentage or a range of percentages and need not be set forth in tabular form.

(2)          If debt securities are being distributed, also express the information in the table as a percentage.

Offering price in currency other than Canadian dollar

1.5         If the offering price of the securities being distributed is disclosed in a currency other than the Canadian dollar, disclose in boldface type the currency.

Non-fixed price distributions

1.6         If the securities are being distributed at non-fixed prices, disclose

    1. the discount allowed or commission payable to the underwriter,
    2. any other compensation payable to the underwriter and, if applicable, that the underwriter's compensation will be increased or decreased by the amount by which the aggregate price paid for the securities by the purchasers exceeds or is less than the gross proceeds paid by the underwriter to the issuer or selling securityholder,
    3. that the securities to be distributed under the prospectus will be distributed, as applicable, at
      1. prices determined by reference to the prevailing price of a specified security in a specified market,
      2. market prices prevailing at the time of sale, or
      3. prices to be negotiated with purchasers,
    4. that prices may vary from purchaser to purchaser and during the period of distribution,
    5. if the price of the securities is to be determined by reference to the prevailing price of a specified security in a specified market, the price of the specified security in the specified market at the latest practicable date,
    6. if the price of the securities will be the market price prevailing at the time of the sale, the market price at the latest practicable date, and
    7. the net proceeds or, if the distribution is to be made on a best efforts basis, the minimum amount of net proceeds, if any, to be received by the issuer or selling securityholder.

Pricing disclosure

1.7         If the offering price or the number of securities being distributed, or an estimate of the range of the offering price or of the number of securities being distributed, has been publicly disclosed in a jurisdiction or a foreign jurisdiction as of the date of the preliminary prospectus, include this information in the preliminary prospectus.

Reduced price distributions

1.8         If an underwriter wishes to be able to decrease the price at which securities are distributed for cash from the initial offering price fixed in the prospectus, include in boldface type a cross-reference to the section in the prospectus where disclosure concerning the possible price decrease is provided.

Market for securities

1.9 (1)    Identify the exchange(s) and quotation system(s), if any, on which securities of the issuer of the same class or series as the securities being distributed are traded or quoted and the market price of those securities as of the latest practicable date.

(2)          Disclose any intention to stabilize the market. Provide a cross-reference to the section in the prospectus where further information about market stabilization is provided.

(3)          If no market for the securities being distributed under the prospectus exists or is expected to exist upon completion of the distribution, state the following in boldface type:

"There is no market through which these securities may be sold and purchasers may not be able to resell securities purchased under this prospectus. This may affect the pricing of the securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer regulation. See 'Risk Factors'."

(4)          If the issuer has complied with the requirements of the Instrument as an IPO venture issuer, include a statement, in substantially the following form, with bracketed information completed:

"As at the date of this prospectus, [name of issuer] does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside Canada and the United States of America (other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc)."

Risk factors

1.10       Include a cross-reference to sections in the prospectus where information about the risks of an investment in the securities being distributed is provided.

Underwriter(s)

1.11 (1)  State the name of each underwriter.

(2)          If applicable, comply with the requirements of NI 33-105 for front page prospectus disclosure.

(3)          If an underwriter has agreed to purchase all of the securities being distributed at a specified price and the underwriter's obligations are subject to conditions, state the following, with bracketed information completed:

"We, as principals, conditionally offer these securities, subject to prior sale, if, as and when issued by [name of issuer] and accepted by us in accordance with the conditions contained in the underwriting agreement referred to under Plan of Distribution".

(4)          If an underwriter has agreed to purchase a specified number or principal amount of the securities at a specified price, state that the securities are to be taken up by the underwriter, if at all, on or before a date not later than 42 days after the date of the receipt for the final prospectus.

(5)          If there is no underwriter involved in the distribution, provide a statement in boldface type to the effect that no underwriter has been involved in the preparation of the prospectus or performed any review or independent due diligence of the contents of the prospectus.

(6)          Provide the following tabular information

Underwriter's Position

Maximum size or number of securities available

Exercise period or Acquisition date

Exercise price or average acquisition price

Over-allotment option

 

 

 

Compensation option

 

 

 

Any other option granted by issuer or insider of issuer to underwriter

 

 

 

Total securities under option issuable to underwriter

 

 

 

Other compensation securities issuable to underwriter

 

 

 

INSTRUCTION

If the underwriter has been granted compensation securities, state, in a footnote, whether the prospectus qualifies the grant of all or part of the compensation securities and provide a cross-reference to the applicable section in the prospectus where further information about the compensation securities is provided.

Enforcement of judgments against foreign persons or companies

1.12       If the issuer, a director of the issuer, a selling securityholder, or any other person or company that is signing or providing a certificate under Part 5 of the Instrument or other securities legislation, or any person or company for whom the issuer is required to file a consent under Part 10 of the Instrument, is incorporated, continued, or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, state the following on the cover page or under a separate heading elsewhere in the prospectus, with the bracketed information completed:

"The [issuer, director of the issuer, selling securityholder, or other person or company] is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada.

[the person or company named below] has appointed the following agent(s) for service of process:

Name of Person or Company

Name and Address of Agent

 

 

Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

Restricted securities

1.13 (1)  Describe the number and class or classes of restricted securities being distributed using the appropriate restricted security terms in the same type face and type size as the rest of the description.

(2)          If the securities being distributed are restricted securities and the holders of the securities do not have the right to participate in a takeover bid made for other equity securities of the issuer, disclose that fact.

Earnings coverage

1.14       If any of the earnings coverage ratios required to be disclosed under Item 9 is less than one-to-one, disclose this fact in boldface type.

ITEM 2: Table of Contents

Table of contents

2.1         Include a table of contents.

ITEM 3: Summary of Prospectus

General

3.1 (1)    Briefly summarize, near the beginning of the prospectus, information appearing elsewhere in the prospectus that, in the opinion of the issuer or selling securityholder, would be most likely to influence the investor's decision to purchase the securities being distributed, including a description of

    1. the principal business of the issuer and its subsidiaries,
    2. the securities to be distributed, including the offering price and expected net proceeds,
    3. use of proceeds,
    4. risk factors,
    5. financial information, and
    6. if restricted securities, subject securities or securities that are directly or indirectly convertible into or exercisable or exchangeable for restricted securities or subject securities, are to be distributed under the prospectus
      1. include a summary of the information required by section 10.6, and
      2. include, in boldface type, a statement of the rights the holders of restricted securities do not have, if the holders do not have all of the rights referred to in section 10.6.

(2)          For the financial information provided under paragraph (1)(e),

    1. describe the type of information appearing elsewhere in the prospectus on which the financial information is based,
    2. disclose whether the information appearing elsewhere in the prospectus on which the financial information is based has been audited,
    3. disclose whether the financial information has been audited, and
    4. if neither the information appearing elsewhere in the prospectus on which the financial information is based nor the financial information has been audited, prominently disclose that fact.

(3)          For each item summarized under subsection (1), provide a cross-reference to the information in the prospectus.

Cautionary language

3.2         At the beginning of the summary, include a statement in italics in substantially the following form:

"The following is a summary of the principal features of this distribution and should be read together with the more detailed information and financial data and statements contained elsewhere in this prospectus."

ITEM 4: Corporate Structure

Name, address and incorporation

4.1 (1)    State the issuer's full corporate name or, if the issuer is an unincorporated entity, the full name under which it exists and carries on business, and the address(es) of the issuer's head and registered office.

(2)          State the statute under which the issuer is incorporated, continued or organized or, if the issuer is an unincorporated entity, the laws of the jurisdiction or foreign jurisdiction under which it is established and exists.

(3)          Describe the substance of any material amendments to the articles or other constating or establishing documents of the issuer.

Intercorporate relationships

4.2 (1)    Describe, by way of a diagram or otherwise, the intercorporate relationships among the issuer and its subsidiaries.

(2)          For each subsidiary described in subsection (1), state

    1. the percentage of votes attaching to all voting securities of the subsidiary beneficially owned, or controlled or directed, directly or indirectly, by the issuer,
    2. the percentage of each class of restricted securities of the subsidiary beneficially owned, or controlled or directed, directly or indirectly, by the issuer, and
    3. where the subsidiary was incorporated, continued, formed or organized.

(3)          If the securities distributed under the prospectus are being issued in connection with a restructuring transaction, describe by way of a diagram or otherwise these intercorporate relationships both before and after the completion of the proposed transaction.

(4)          A particular subsidiary may be omitted from the disclosure required by this section if, at the most recent financial year end of the issuer

    1. the total assets of the subsidiary do not exceed 10% of the consolidated assets of the issuer,
    2. the revenue of the subsidiary does not exceed 10% of the consolidated revenue of the issuer, and
    3. the conditions in paragraphs (a) and (b) would be satisfied if
      1. the subsidiaries that may be omitted under paragraphs (a) and (b) were considered in the aggregate, and
      2. the reference to 10% in those paragraphs was changed to 20%.

ITEM 5: Describe the Business

Describe the business

5.1 (1)    Describe the business of the issuer and its operating segments that are reportable segments as those terms are described in the issuer's GAAP. Disclose information for each reportable segment of the issuer in accordance with subsection 5.1(1) of Form 51-102F2.

(2)          Disclose the nature and results of any bankruptcy, receivership or similar proceedings against the issuer or any of its subsidiaries, or any voluntary bankruptcy, receivership or similar proceedings by the issuer or any of its subsidiaries, within the three most recently completed financial years or, if the issuer is a venture issuer or an IPO venture issuer, the two most recently completed financial years, or completed during or proposed for the current financial year.

(3)          Disclose the nature and results of any material restructuring transaction of the issuer or any of its subsidiaries within the three most recently completed financial years or, if the issuer is a venture issuer or an IPO venture issuer, the two most recently completed financial years, or completed during or proposed for the current financial year.

(4)          If the issuer has implemented social or environmental policies that are fundamental to the issuer's operations, such as policies regarding the issuer's relationship with the environment or with the communities in which the issuer does business, or human rights policies, describe them and the steps the issuer has taken to implement them.

History

5.2 (1)    Describe how the issuer's business has developed over the last three completed financial years or, if the issuer is a venture issuer or an IPO venture issuer, the last two completed financial years, and any subsequent period to the date of the prospectus, including only events, such as acquisitions or dispositions, or conditions that have influenced the general development of the business.

(2)          If the issuer produces or distributes more than one product or provides more than one kind of service, describe the products or services.

(3)          Discuss changes in the issuer's business that the issuer expects will occur during the current financial year.

Issuers with asset-backed securities outstanding

5.3         If the issuer has asset-backed securities outstanding that were distributed under a prospectus, disclose information in accordance with section 5.3 of Form 51-102F2.

Issuers with mineral projects

5.4         If the issuer has a mineral project, disclose information for the issuer in accordance with section 5.4 of Form 51-102F2. For the purposes of this section, the alternative disclosure permitted in Instruction (ii) to section 5.4 of Form 51-102F2 does not apply.

Issuers with oil and gas operations

5.5 (1)    If the issuer is engaged in oil and gas activities as defined in NI 51-101 and any of the oil and gas information is material as contemplated under NI 51-101 in respect of the issuer, disclose that information in accordance with Form 51-101F1

    1. as at the end of, and for, the most recent financial year for which the prospectus includes an audited statement of financial position of the issuer,
    2. in the absence of a completed financial year referred to in paragraph (a), as at the most recent date for which the prospectus includes an audited statement of financial position of the issuer, and for the most recent financial period for which the prospectus includes an audited statement of comprehensive income of the issuer, or
    3. if the issuer was not engaged in oil and gas activities at the date set out in paragraphs (a) or (b), as of a date subsequent to the date the issuer first engaged in oil and gas activities as defined in NI 51-101 and prior to the date of the preliminary prospectus.

(2)          Include with the disclosure under subsection (1) a report in the form of Form 51-101F2, on the reserves data included in the disclosure required under subsection (1).

(3)          Include with the disclosure under subsection (1) a report in the form of Form 51-101F3 that refers to the information disclosed under subsection (1).

(4)          To the extent not reflected in the information disclosed in response to subsection (1), disclose the information contemplated by Part 6 of NI 51-101 in respect of material changes that occurred after the applicable statement of financial position referred to in subsection (1).

INSTRUCTION

Disclosure in a prospectus must be consistent with NI 51-101 if the issuer is engaged in oil and gas activities as defined in NI 51-101.

ITEM 6: Use of Proceeds

Proceeds

6.1 (1)    State the estimated net proceeds to be received by the issuer or selling securityholder or, in the case of a non-fixed price distribution or a distribution to be made on a best efforts basis, the minimum amount, if any, of net proceeds to be received by the issuer or selling securityholder from the sale of the securities distributed.

(2)          State the particulars of any provisions or arrangements made for holding any part of the net proceeds of the distribution in trust or escrow subject to the fulfillment of conditions.

(3)          If the prospectus is used for a special warrant or similar transaction, state the amount that has been received by the issuer of the special warrants or similar securities on the sale of the special warrants or similar securities.

Junior issuers

6.2         A junior issuer must disclose

    1. the total funds available, and
    2. the following breakdown of those funds:
      1. the estimated net proceeds from the sale of the securities offered under the prospectus;
      2. the estimated consolidated working capital (deficiency) as at the most recent month end before filing the prospectus;
      3. the total other funds available to be used to achieve the principal purposes identified by the junior issuer pursuant to this Item.

Principal purposes – generally

6.3 (1)    Describe in reasonable detail and, if appropriate, using tabular form, each of the principal purposes, with approximate amounts, for which

    1. the net proceeds will be used by the issuer, or
    2. the funds available as required under section 6.2 will be used by a junior issuer.

(2)          If the closing of the distribution is subject to a minimum offering amount, provide disclosure of the use of proceeds for the minimum and maximum offering amounts.

(3)          If the following apply, disclose how the proceeds will be used by the issuer, with reference to various potential thresholds of proceeds raised, in the event that the issuer raises less than the maximum offering amount:

    1. the closing of the distribution is not subject to a minimum offering amount;
    2. the distribution is to be on a best efforts basis;
    3. the issuer has significant short-term non-discretionary expenditures including those for general corporate purposes, or significant short-term capital or contractual commitments, and may not have other readily accessible resources to satisfy those expenditures or commitments.

(4)          If the issuer is required to provide disclosure under subsection (3), the issuer must discuss, in respect of each threshold, the impact, if any, of raising each threshold amount on its liquidity, operations, capital resources and solvency.

INSTRUCTIONS

If the issuer is required to disclose the use of proceeds at various thresholds under subsections 6.3(3) and (4), include as an example a threshold that reflects the receipt of 15% of the offering or less.

Principal purposes – indebtedness

6.4 (1)    If more than 10% of the net proceeds will be used to reduce or retire indebtedness and the indebtedness was incurred within the two preceding years, describe the principal purposes for which the proceeds of the indebtedness were used.

(2)          If the creditor is an insider, associate or affiliate of the issuer, identify the creditor and the nature of the relationship to the issuer, and disclose the outstanding amount owed.

Principal purposes – asset acquisition

6.5 (1)    If more than 10% of the net proceeds are to be used to acquire assets, describe the assets.

(2)          If known, disclose the particulars of the purchase price being paid for or being allocated to the assets or categories of assets, including intangible assets.

(3)          If the vendor of the assets is an insider, associate or affiliate of the issuer, identify the vendor and the nature of the relationship to the issuer, and disclose the method used in determining the purchase price.

(4)          Describe the nature of the title to or interest in the assets to be acquired by the issuer.

(5)          If part of the consideration for the acquisition of the assets consists of securities of the issuer, give brief particulars of the class, number or amount, voting rights, if any, and other appropriate information relating to the securities, including particulars of the issuance of securities of the same class within the two preceding years.

Principal purposes – insiders, etc.

6.6         If an insider, associate or affiliate of the issuer will receive more than 10% of the net proceeds, identify the insider, associate or affiliate and the nature of the relationship to the issuer, and disclose the amount of net proceeds to be received.

Principal purposes – research and development

6.7         If more than 10% of the net proceeds from the distribution will be used for research and development of products or services, describe

    1. the timing and stage of research and development programs that management anticipates will be reached using such proceeds,
    2. the major components of the proposed programs that will be funded using the proceeds from the distribution, including an estimate of anticipated costs,
    3. if the issuer is conducting its own research and development, is subcontracting out the research and development or is using a combination of those methods, and
    4. the additional steps required to reach commercial production and an estimate of costs and timing.

Business objectives and milestones

6.8 (1)    State the business objectives that the issuer expects to accomplish using the net proceeds of the distribution under section 6.1, or in the case of a junior issuer, using the funds available described under section 6.2.

(2)          Describe each significant event that must occur for the business objectives described under subsection (1) to be accomplished and state the specific time period in which each event is expected to occur and the costs related to each event.

Unallocated funds in trust or escrow

6.9 (1)    Disclose that unallocated funds will be placed in a trust or escrow account, invested or added to the working capital of the issuer.

(2)          Give details of the arrangements made for, and the persons or companies responsible for,

    1. the supervision of the trust or escrow account or the investment of unallocated funds, and
    2. the investment policy to be followed.

Other sources of funding

6.10       If any material amounts of other funds are to be used in conjunction with the proceeds, state the amounts and sources of the other funds.

Financing by special warrants, etc.

6.11 (1)  If the prospectus is used to qualify the distribution of securities issued upon the exercise of special warrants or the exercise of other securities acquired on a prospectus-exempt basis, describe the principal purposes for which the proceeds of the prospectus-exempt financing were used or are to be used.

(2)          If all or a portion of the funds have been spent, explain how the funds were spent.

ITEM 7: Dividends or Distributions

Dividends or distributions

7.1 (1)    Disclose the amount of cash dividends or distributions declared per security for each class of the issuer's securities for each of the three most recently completed financial years and its current financial year.

(2)          Describe any restrictions that could prevent the issuer from paying dividends or distributions.

(3)          Disclose the issuer's dividend or distribution policy and any intended change in dividend or distribution policy.

ITEM 8: Management's Discussion and Analysis

Interpretation

8.1 (1)    For the purposes of this Item, MD&A means a completed Form 51-102F1 or, in the case of an SEC issuer, a completed Form 51-102F1 or management's discussion and analysis prepared in accordance with Item 303 of Regulation S-K under the 1934 Act.

(2)          For MD&A in the form of Form 51-102F1, the issuer

    1. must read the references to a "venture issuer" in Form 51-102F1 to include an IPO venture issuer,
    2. must disregard
      1. the Instruction to section 1.11 of Form 51-102F1, and
      2. section 1.15 of Form 51-102F1, and
    3. must include the disclosure required by section 1.10 of Form 51-102F1 in the prospectus.

INSTRUCTION

For the purposes of paragraph (2)(c), an issuer cannot satisfy the requirement in section 1.10 of Form 51-102F1 by incorporating by reference its fourth quarter MD&A into the prospectus.

MD&A

8.2 (1)    Provide MD&A for

    1. the most recent annual financial statements of the issuer included in the prospectus under Item 32, and
    2. the most recent interim financial report of the issuer included in the prospectus under Item 32.

(2)          If the prospectus includes the issuer's annual statements of comprehensive income, statements of changes in equity, and statements of cash flow for three financial years under Item 32, provide MD&A for the second most recent annual financial statements of the issuer included in the prospectus under Item 32.

(3)          Despite subsection (2), MD&A for the second most recent annual financial statements of the issuer included in the prospectus under Item 32 may omit disclosure regarding statement of financial position items.

GUIDANCE

Under section 2.2.1 of Form 51-102F1, for financial years beginning on or after July 1, 2015, venture issuers, or IPO venture issuers, have the option of meeting the requirement to provide interim MD&A under section 2.2 of Form 51-102F1 by providing quarterly highlights disclosure.

 

 

[Repealed]

8.3 (1)    [Repealed]

(2)          [Repealed]

Disclosure of outstanding security data

8.4 (1)    Disclose the designation and number or principal amount of

    1. each class and series of voting or equity securities of the issuer for which there are securities outstanding,
    2. each class and series of securities of the issuer for which there are securities outstanding if the securities are convertible into, or exercisable or exchangeable for, voting or equity securities of the issuer, and
    3. subject to subsection (2), each class and series of voting or equity securities of the issuer that are issuable on the conversion, exercise or exchange of outstanding securities of the issuer.

(2)          If the exact number or principal amount of voting or equity securities of the issuer that are issuable on the conversion, exercise or exchange of outstanding securities of the issuer is not determinable, the issuer must disclose the maximum number or principal amount of each class and series of voting or equity securities that are issuable on the conversion, exercise or exchange of outstanding securities of the issuer and, if that maximum number or principal amount is not determinable, the issuer must describe the exchange or conversion features and the manner in which the number or principal amount of voting or equity securities will be determined.

(3)          The disclosure under subsections (1) and (2) must be prepared as of the latest practicable date.

More recent financial information

8.5         If the issuer is required to include more recent historical financial information in the prospectus under subsection 32.6(2), the issuer is not required to update the MD&A already included in the prospectus under this Item.

Additional disclosure for venture issuers or IPO venture issuers without significant revenue

8.6 (1)    If the issuer is a venture issuer or an IPO venture issuer that has not had significant revenue from operations in either of its last two financial years, disclose a breakdown of material components of

    1. exploration and evaluation assets or expenditures,
    2. expensed research and development costs,
    3. intangible assets arising from development,
    4. general and administrative expenses, and
    5. any material costs, whether expensed or recognized as assets, not referred to in paragraphs (a) through (d).

(2)          Present the analysis of exploration and evaluation assets or expenditures required by subsection (1) on a property-by-property basis, if the issuer's business primarily involves mining exploration and development.

(3)          Provide the disclosure in subsection (1) for the following periods:

    1. the two most recently completed financial years; and
    2. if the issuer is not providing disclosure in accordance with section 2.2.1 of Form 51-102F1, the most recent year-to-date interim period and the comparative year-to-date period presented in the interim financial report included in the prospectus, if any.

(4)          Subsection (1) does not apply if the information required under that subsection has been disclosed in the financial statements included in the prospectus.

Additional disclosure for junior issuers

8.7         For a junior issuer that had negative cash flow from operating activities in its most recently completed financial year for which financial statements have been included in the prospectus, disclose

    1. the period of time the proceeds raised under the prospectus are expected to fund operations,
    2. the estimated total operating costs necessary for the issuer to achieve its stated business objectives during that period of time, and
    3. the estimated amount of other material capital expenditures during that period of time.

In determining cash flow from operating activities, the issuer must include cash payments related to dividends and borrowing costs.

Additional disclosure for issuers with significant equity investees

8.8 (1)    An issuer that has a significant equity investee must disclose

    1. summarized financial information of the equity investee, including the aggregated amounts of assets, liabilities, revenue and profit or loss, and
    2. the issuer's proportionate interest in the equity investee and any contingent issuance of securities by the equity investee that might significantly affect the issuer's share of profit or loss.

(2)          Provide the disclosure in subsection (1) for the following periods:

    1. the two most recently completed financial years;
    2. if the issuer is not providing disclosure in accordance with section 2.2.1 of Form 51-102F1, the most recent year-to-date interim period and the comparative year-to-date period presented in the interim financial report included in the prospectus, if any.

(3)          Subsection (1) does not apply if

    1. the information required under that subsection has been disclosed in the financial statements included in the prospectus, or
    2. the issuer includes in the prospectus separate financial statements of the equity investee for the periods referred to in subsection (2).

ITEM 9: Earnings Coverage Ratios

Earnings coverage ratios

9.1 (1)    If the securities being distributed are debt securities having a term to maturity in excess of one year or are preferred shares, disclose the following earnings coverage ratios adjusted in accordance with subsection (2):

    1. the earnings coverage ratio based on the most recent 12-month period included in the issuer's annual financial statements included in the prospectus,
    2. if there has been a change in year end and the issuer's most recent financial year is less than nine months in length, the earnings coverage calculation for its old financial year, and
    3. the earnings coverage ratio based on the 12-month period ended on the last day of the most recently completed period for which an interim financial report of the issuer has been included in the prospectus.

(2)          Adjust the ratios referred to in subsection (1) to reflect

    1. the issuance of the securities being distributed under the prospectus, based on the price at which these securities are expected to be distributed,
    2. in the case of a distribution of preferred shares,
      1. the issuance of all preferred shares since the date of the annual financial statements or interim financial report, and
      2. the repurchase, redemption or other retirement of all preferred shares repurchased, redeemed, or otherwise retired since the date of the annual financial statements or interim financial report and of all preferred shares to be repurchased, redeemed, or otherwise retired from the proceeds to be realized from the sale of securities under the prospectus,
    3. the issuance of all financial liabilities, as defined in accordance with the issuer's GAAP, since the date of the annual financial statements or interim financial report, and
    4. the repayment, redemption or other retirement of all financial liabilities, as defined in accordance with the issuer's GAAP, since the date of the annual financial statements or interim financial report and all financial liabilities to be repaid or redeemed from the proceeds to be realized from the sale of securities distributed under the prospectus.
    5. [Repealed]

(3)          [Repealed]

(4)          If the earnings coverage ratio is less than one-to-one, disclose in the prospectus the dollar amount of the numerator required to achieve a ratio of one-to-one.

(5)          If the prospectus includes a pro forma income statement, calculate the pro forma earnings coverage ratios for the periods of the pro forma income statement, and disclose them in the prospectus.

INSTRUCTIONS

(1)          Cash flow coverage may be disclosed but only as a supplement to earnings coverage and only if the method of calculation is fully disclosed.

(2)          Earnings coverage is calculated by dividing an entity's profit or loss attributable to owners of the parent (the numerator) by its borrowing costs and dividend obligations (the denominator).

(3)          For the earnings coverage calculation

    1. the numerator should be calculated using consolidated profit or loss attributable to owners of the parent before borrowing costs and income taxes;
    2. imputed interest income from the proceeds of a distribution should not be added to the numerator;
    3. [Repealed]
    4. for distributions of debt securities, the appropriate denominator is borrowing costs, after giving effect to the new debt securities issue and any retirement of obligations, plus the borrowing costs that have been capitalized during the period;
    5. for distributions of preferred shares
      1. the appropriate denominator is dividends declared during the period, together with undeclared dividends on cumulative preferred shares, after giving effect to the new preferred share issue, plus the issuer's annual borrowing cost requirements, including the borrowing costs that have been capitalized during the period, less any retirement of obligations, and
      2. dividends should be grossed-up to a before-tax equivalent using the issuer's effective income tax rate; and
    6. for distributions of both debt securities and preferred shares, the appropriate denominator is the same as for a preferred share issue, except that the denominator should also reflect the effect of the debt securities being offered pursuant to the prospectus.

(4)          The denominator represents a pro forma calculation of the aggregate of an issuer's borrowing cost obligations on all financial liabilities and dividend obligations (including both dividends declared and undeclared dividends on cumulative preferred shares) with respect to all outstanding preferred shares, as adjusted to reflect

    1. the issuance of all financial liabilities and, in addition in the case of an issuance of preferred shares, all preferred shares issued, since the date of the annual financial statements or interim financial report;
    2. the issuance of the securities that are to be distributed under the prospectus, based on a reasonable estimate of the price at which these securities will be distributed; and
    3. the repayment or redemption of all financial liabilities since the date of the annual financial statements or interim financial report, all financial liabilities to be repaid or redeemed from the proceeds to be realized from the sale of securities under the prospectus and, in addition, in the case of an issuance of preferred shares, all preferred shares repaid or redeemed since the date of the annual financial statements or interim financial report and all preferred shares to be repaid or redeemed from the proceeds to be realized from the sale of securities under the prospectus.
    4.  [Repealed]

(5)          [Repealed]

(6)          For debt securities, disclosure of earnings coverage shall include language similar to the following, with the bracketed and bulleted information completed:

"[Name of the issuer]'s borrowing cost requirements, after giving effect to the issue of [the debt securities to be distributed under the prospectus], amounted to $• for the 12 months ended •. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months then ended was $•, which is • times [name of the issuer]'s borrowing cost requirements for this period."

(7)          For preferred share issues, disclosure of earnings coverage shall include language similar to the following, with the bracketed and bulleted information completed:

"[Name of the issuer]'s dividend requirements on all of its preferred shares, after giving effect to the issue of [the preferred shares to be distributed under the prospectus], and adjusted to a before-tax equivalent using an effective income tax rate of •%, amounted to $• for the 12 months ended •. [Name of the issuer]'s borrowing cost requirements for the 12 months then ended amounted to $•. [Name of the issuer]'s profit or loss attributable to owners of the parent before borrowing costs and income tax for the 12 months ended • was $•, which is • times [name of the issuer]'s aggregate dividend and borrowing cost requirements for this period."

(8)          Other earnings coverage calculations may be included as supplementary disclosure to the required earnings coverage calculations outlined above as long as their derivation is disclosed and they are not given greater prominence than the required earnings coverage calculations.

ITEM 10: Description of the Securities Distributed

Equity securities

10.1       If equity securities are being distributed, state the description or the designation of the class of the equity securities and describe all material attributes and characteristics, including

    1. dividend rights,
    2. voting rights,
    3. rights upon dissolution or winding-up,
    4. pre-emptive rights,
    5. conversion or exchange rights,
    6. redemption, retraction, purchase for cancellation or surrender provisions,
    7. sinking or purchase fund provisions,
    8. provisions permitting or restricting the issuance of additional securities and any other material restrictions, and
    9. provisions requiring a securityholder to contribute additional capital.

Debt securities

10.2       If debt securities are being distributed, describe all material attributes and characteristics of the indebtedness and the security, if any, for the debt, including

    1. provisions for interest rate, maturity and premium, if any,
    2. conversion or exchange rights,
    3. redemption, retraction, purchase for cancellation or surrender provisions,
    4. sinking or purchase fund provisions,
    5. the nature and priority of any security for the debt securities, briefly identifying the principal properties subject to lien or charge,
    6. provisions permitting or restricting the issuance of additional securities, the incurring of additional indebtedness and other material negative covenants, including restrictions against payment of dividends and restrictions against giving security on the assets of the issuer or its subsidiaries, and provisions as to the release or substitution of assets securing the debt securities,
    7. the name of the trustee under any indenture relating to the debt securities and the nature of any material relationship between the trustee or any of its affiliates and the issuer or any of its affiliates, and
    8. any financial arrangements between the issuer and any of its affiliates or among its affiliates that could affect the security for the indebtedness.

Asset-backed securities

10.3 (1)  This section applies only if any asset-backed securities are being distributed under the prospectus.

(2)          Describe the material attributes and characteristics of the asset-backed securities, including

    1. the rate of interest or stipulated yield and any premium,
    2. the date for repayment of principal or return of capital and any circumstances in which payments of principal or capital may be made before such date, including any redemption or pre-payment obligations or privileges of the issuer and any events that may trigger early liquidation or amortization of the underlying pool of financial assets,
    3. provisions for the accumulation of cash flows to provide for the repayment of principal or return of capital,
    4. provisions permitting or restricting the issuance of additional securities and any other material negative covenants applicable to the issuer,
    5. the nature, order and priority of the entitlements of holders of asset-backed securities and any other entitled persons or companies to receive cash flows generated from the underlying pool of financial assets, and
    6. any events, covenants, standards or preconditions that may reasonably be expected to affect the timing or amount of payments or distributions to be made under the asset-backed securities, including those that are dependent or based on the economic performance of the underlying pool of financial assets.

(3)          Provide financial disclosure that describes the underlying pool of financial assets for

    1. the three most recently completed financial years ended more than
      1. 90 days before the date of the prospectus, or
      2. 120 days before the date of the prospectus, if the issuer is a venture issuer,
    2. if the issuer has not had asset-backed securities outstanding for three financial years, each completed financial year ended more than
      1. 90 days before the date of the prospectus, or
      2. 120 days before the date of the prospectus, if the issuer is a venture issuer,
    3. a period from the date the issuer had asset-backed securities outstanding to a date not more than 90 days before the date of the prospectus if the issuer has not had asset-backed securities outstanding for at least one financial year.

(4)          For the purposes of the financial disclosure required by subsection (3), if an issuer changed its financial year end during any of the financial years referred to in subsection (3) and the transition year is less than nine months, the transition year is not a financial year.

(5)          Despite subsection (4), all financial disclosure that describes the underlying pool of financial assets of the issuer for a transition year must be included in the prospectus for the most recent interim period, if any, ended

    1. subsequent to the most recent financial year refer to in paragraphs (3)(a) and (3)(b) in respect of which financial disclosure on the underlying pool of financial assets is included in the prospectus, and
    2. more than
      1. 45 days before the date of the prospectus, or
      2. 60 days before the date of the prospectus if the issuer is a venture issuer.

(6)          If the issuer files financial disclosure that describes the underlying pool of financial assets for a more recent period than required under subsection (3) or (5) before the prospectus is filed, the issuer must include that more recent financial disclosure that describes the underlying pool of financial assets in the prospectus.

(7)          If financial disclosure that describes the underlying pool of financial assets of the issuer is publicly disseminated by, or on behalf of, the issuer through news release or otherwise for a more recent period than required under subsection (3) or (5), the issuer must include the content of the news release or public communication in the prospectus.

(8)          The disclosure in subsections (3) and (5) must include a discussion and analysis of

    1. the composition of the pool as at the end of the period,
    2. profit and losses from the pool for the period presented on at least an annual basis or such shorter period as is reasonable given the nature of the underlying pool of assets,
    3. the payment, prepayment and collection experience of the pool for the period on at least an annual basis or such shorter period as is reasonable given the nature of the underlying pool of assets,
    4. servicing and other administrative fees, and
    5. any significant variances experienced in the matters referred to in paragraphs (a) through (d).

(9)          Describe the type of financial assets, the manner in which the financial assets originated or will originate and, if applicable, the mechanism and terms of the agreement governing the transfer of the financial assets comprising the underlying pool to or through the issuer, including the consideration paid for the financial assets.

(10)        Describe any person or company who

    1. originated, sold or deposited a material portion of the financial assets comprising the pool, or has agreed to do so,
    2. acts, or has agreed to act, as a trustee, custodian, bailee or agent of the issuer or any holder of the asset-backed securities, or in a similar capacity,
    3. administers or services a material portion of the financial assets comprising the pool or provides administrative or managerial services to the issuer, or has agreed to do so, on a conditional basis or otherwise, if
      1. finding a replacement provider of the services at a cost comparable to the cost of the current provider is not reasonably likely,
      2. a replacement provider of the services is likely to achieve materially worse results than the current provider,
      3. the current provider of the services is likely to default in its service obligations because of its current financial condition, or
      4. the disclosure is otherwise material,
    4. provides a guarantee, alternative credit support or other credit enhancement to support the obligations of the issuer under the asset-backed securities or the performance of some or all of the financial assets in the pool, or has agreed to do so, or
    5. lends to the issuer in order to facilitate the timely payment or repayment of amounts payable under the asset-backed securities, or has agreed to do so.

(11)        Describe the general business activities and material responsibilities under the asset-backed securities of a person or company referred to in subsection (10).

(12)        Describe the terms of any material relationships between

    1. any of the persons or companies referred to in subsection (10) or any of their respective affiliates, and
    2. the issuer.

(13)        Describe any provisions relating to termination of services or responsibilities of any of the persons or companies referred to in subsection (10) and the terms on which a replacement may be appointed.

(14)        Describe any risk factors associated with the asset-backed securities, including disclosure of material risks associated with changes in interest rates or prepayment levels, and any circumstances where payments on the asset-backed securities could be impaired or disrupted as a result of any reasonably foreseeable event that may delay, divert or disrupt the cash flows dedicated to service the asset-backed securities.

INSTRUCTIONS

(1)          Present the information required under subsections (3) through (8) in a manner that will enable a reader to easily determine whether, and the extent to which, the events, covenants, standards and preconditions referred to in paragraph (2)(f) have occurred, are being satisfied or may be satisfied.

(2)          If the information required under subsections (3) through (8) is not compiled specifically from the underlying pool of financial assets, but is compiled from a larger pool of the same assets from which the securitized assets are randomly selected so that the performance of the larger pool is representative of the performance of the pool of securitized assets, then an issuer may comply with subsections (3) through (8) by providing the financial disclosure required based on the larger pool and disclosing that it has done so.

(3)          Issuers are required to summarize contractual arrangements in plain language and may not merely restate the text of the contracts referred to. The use of diagrams to illustrate the roles of, and the relationship among, the persons and companies referred to in subsection (10), and the contractual arrangements underlying the asset-backed securities is encouraged.

Derivatives

10.4       If derivatives are being distributed, describe fully the material attributes and characteristics of the derivatives, including

    1. the calculation of the value or payment obligations under the derivatives,
    2. the exercise of the derivatives,
    3. settlements that are the result of the exercise of the derivatives,
    4. the underlying interest of the derivatives,
    5. the role of a calculation expert in connection with the derivatives,
    6. the role of any credit supporter of the derivatives, and
    7. the risk factors associated with the derivatives.

Special warrants, etc.

10.5       If the prospectus is used to qualify the distribution of securities issued upon the exercise of special warrants or other securities acquired on a prospectus-exempt basis, provide the following disclosure in the prospectus to indicate that holders of such securities have been provided with a contractual right of rescission:

"The issuer has granted to each holder of a special warrant a contractual right of rescission of the prospectus-exempt transaction under which the special warrant was initially acquired. The contractual right of rescission provides that if a holder of a special warrant who acquires another security of the issuer on exercise of the special warrant as provided for in the prospectus is, or becomes, entitled under the securities legislation of a jurisdiction to the remedy of rescission because of the prospectus or an amendment to the prospectus containing a misrepresentation,

    1. the holder is entitled to rescission of both the holder's exercise of its special warrant and the private placement transaction under which the special warrant was initially acquired,
    2. the holder is entitled in connection with the rescission to a full refund of all consideration paid to the underwriter or issuer, as the case may be, on the acquisition of the special warrant, and
    3. if the holder is a permitted assignee of the interest of the original special warrant subscriber, the holder is entitled to exercise the rights of rescission and refund as if the holder was the original subscriber."

INSTRUCTION

If the prospectus is qualifying the distribution of securities issued upon the exercise of securities other than special warrants, replace the term "special warrant" with the type of the security being distributed.

Restricted securities

10.6 (1)  If the issuer has outstanding, or proposes to distribute under a prospectus restricted securities, subject securities or securities that are, directly or indirectly, convertible into or exercisable or exchangeable for restricted securities or subject securities, provide a detailed description of

    1. the voting rights attached to the restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, and the voting rights, if any, attached to the securities of any other class of securities of the issuer that are the same as or greater than, on a per security basis, those attached to the restricted securities,
    2. any significant provisions under applicable corporate and securities law that do not apply to the holders of the restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, but do apply to the holders of another class of equity securities, and the extent of any rights provided in the constating documents or otherwise for the protection of holders of the restricted securities,
    3. any rights under applicable corporate law, in the constating documents or otherwise, of holders of restricted securities that are the subject of the distribution or that will result from the distribution, either directly or following a conversion, exchange or exercise, to attend, in person or by proxy, meetings of holders of equity securities of the issuer and to speak at the meetings to the same extent that holders of equity securities are entitled, and
    4. how the issuer complied with, or the basis upon which it was exempt from, the requirements of Part 12 of the Instrument.

(2)          If holders of restricted securities do not have all of the rights referred to in subsection (1) the detailed description referred to in that subsection must include, in boldface type, a statement of the rights the holders do not have.

(3)          If the issuer is required to include the disclosure referred to in subsection (1), state the percentage of the aggregate voting rights attached to the issuer's securities that will be represented by restricted securities after effect has been given to the issuance of the securities being offered.

Other securities

10.7       If securities other than equity securities, debt securities, asset-backed securities or derivatives are being distributed, describe fully the material attributes and characteristics of those securities.

Modification of terms

10.8 (1)  Describe provisions about the modification, amendment or variation of any rights attached to the securities being distributed.

(2)          If the rights of holders of securities may be modified otherwise than in accordance with the provisions attached to the securities or the provisions of the governing statute relating to the securities, explain briefly.

Ratings

10.9       If the issuer has asked for and received a credit rating, or if the issuer is aware that it has received any other kind of rating, including a stability rating or a provisional rating, from one or more credit rating organizations for securities of the issuer that are outstanding, or will be outstanding, and the rating or ratings continue in effect, disclose

    1. each rating received from a credit rating organization;
    2. for each rating disclosed under paragraph (a), the name of the credit rating organization that has assigned the rating;
    3. a definition or description of the category in which each credit rating organization rated the securities and the relative rank of each rating within the organization's overall classification system;
    4. an explanation of what the rating addresses and what attributes, if any, of the securities are not addressed by the rating;
    5. any factors or considerations identified by the credit rating organization as giving rise to unusual risks associated with the securities;
    6. a statement that a credit rating or a stability rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the credit rating organization; and
    7. any announcement made by, or any proposed announcement known to the issuer that is to be made by, a credit rating organization to the effect that the organization is reviewing or intends to revise or withdraw a rating previously assigned and required to be disclosed under this section.

(2)          If payments were, or reasonably will be, made to a credit rating organization that provided a rating described in subsection (1), state that fact and state whether any payments were made to the credit rating organization in respect of any other service provided to the issuer by the credit rating organization during the last two years.

INSTRUCTIONS

There may be factors relating to a security that are not addressed by a credit rating organization when they give a rating. For example, in the case of cash settled derivative instruments, factors in addition to the creditworthiness of the issuer, such as the continued subsistence of the underlying interest or the volatility of the price, value or level of the underlying interest may be reflected in the rating analysis. Rather than being addressed in the rating itself, these factors may be described by a credit rating organization by way of a superscript or other notation to a rating. Any such attributes must be discussed in the disclosure under this section.

A provisional rating received before the issuer’s most recently completed financial year is not required to be disclosed under this section.

Other attributes

10.10 (1)              If the rights attaching to the securities being distributed are materially limited or qualified by the rights of any other class of securities, or if any other class of securities ranks ahead of or equally with the securities being distributed, include information about the other securities that will enable investors to understand the rights attaching to the securities being distributed.

(2)          If securities of the class being distributed may be partially redeemed or repurchased, state the manner of selecting the securities to be redeemed or repurchased.

INSTRUCTION

This section requires only a brief summary of the provisions that are material from an investment standpoint. The provisions attaching to the securities being distributed or any other class of securities do not need to be set out in full. They may, in the issuer's discretion, be attached as a schedule to the prospectus.

ITEM 11: Consolidated Capitalization

Consolidated capitalization

11.1       Describe any material change in, and the effect of the material change on, the share and loan capital of the issuer, on a consolidated basis, since the date of the issuer's financial statements for its most recently completed financial period included in the prospectus, including any material change that will result from the issuance of the securities being distributed under the prospectus.

ITEM 12: Options to Purchase Securities

Options to purchase securities

12.1 (1)  For an issuer that is not a reporting issuer in any jurisdiction immediately before filing the prospectus, state, in tabular form, as at a specified date within 30 days before the date of the prospectus, information about options to purchase securities of the issuer, or a subsidiary of the issuer, that are held or will be held upon completion of the distribution by

    1. all executive officers and past executive officers of the issuer, as a group, and all directors and past directors of the issuer who are not also executive officers, as a group, indicating the aggregate number of executive officers and the aggregate number of directors to whom the information applies,
    2. all executive officers and past executive officers of all subsidiaries of the issuer, as a group, and all directors and past directors of those subsidiaries who are not also executive officers of the subsidiary, as a group, excluding, in each case, individuals referred to in paragraph (a), indicating the aggregate number of executive officers and the aggregate number of directors to whom the information applies,
    3. all other employees and past employees of the issuer as a group,
    4. all other employees and past employees of subsidiaries of the issuer as a group,
    5. all consultants of the issuer as a group, and
    6. any other person or company, other than the underwriter(s), naming each person or company.

(2)          Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus.

INSTRUCTIONS

(1)          Describe the options, warrants, or other similar securities stating the material provisions of each class or type of option, including:

    1. the designation and number of the securities under option;
    2. the purchase price of the securities under option or the formula by which the purchase price will be determined, and the expiration dates of the options;
    3. if reasonably ascertainable, the market value of the securities under option on the date of grant;
    4. if reasonably ascertainable, the market value of the securities under option on the specified date; and
    5. with respect to options referred to in paragraph (1)(f), the particulars of the grant including the consideration for the grant.

(2)          For the purposes of paragraph (1)(f), provide the information required for all options except warrants and special warrants.

ITEM 13: Prior Sales

Prior sales

13.1       For each class or series of securities of the issuer distributed under the prospectus and for securities that are convertible or exchangeable into those classes or series of securities, state, for the 12-month period before the date of the prospectus,

    1. the price at which the securities have been issued or are to be issued by the issuer or sold by the selling securityholder,
    2. the number of securities issued or sold at that price, and
    3. the date on which the securities were issued or sold.

Trading price and volume

13.2 (1)  For the following securities of the issuer that are traded or quoted on a Canadian marketplace, identify the marketplace and the price ranges and volume traded or quoted on the Canadian marketplace on which the greatest volume of trading or quotation for the securities generally occurs;

    1. each class or series of securities of the issuer distributed under the prospectus;
    2. securities of the issuer into which those classes or series of securities are convertible or exchangeable.

(2)          For the following securities of the issuer that are not traded or quoted on a Canadian marketplace but are traded or quoted on a foreign marketplace, identify the foreign marketplace and the price ranges and volume traded or quoted on the foreign marketplace on which the greatest volume or quotation for the securities generally occurs;

    1. each class or series of securities of the issuer distributed under the prospectus;
    2. securities of the issuer into which those classes or series of securities are convertible or exchangeable.

(3)          Provide the information required under subsections (1) and (2) on a monthly basis for each month or, if applicable, partial months of the 12-month period before the date of the prospectus.

ITEM 14: Escrowed Securities and Securities Subject to Contractual Restriction on Transfer

Escrowed securities and securities subject to contractual restriction on transfer

14.1 (1)  State as of a specified date within 30 days before the date of the prospectus, in substantially the following tabular form, the number of securities of each class of securities of the issuer held, to the knowledge of the issuer, in escrow or that are subject to a contractual restriction on transfer and the percentage that number represents of the outstanding securities of that class.

ESCROWED SECURITIES AND SECURITIES
SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER

Designation of class

Number of securities held in escrow or that are subject to a contractual restriction on transfer

Percentage of class

(2)          In a note to the table disclose the name of the depository, if any, and the date of and conditions governing the release of the securities from escrow or the date the contractual restriction on transfer ends, as applicable.

(3)          Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus.

INSTRUCTIONS

(1)          For purposes of this section, escrow includes securities subject to a pooling agreement.

(2)          For the purposes of this section, securities subject to contractual restrictions on transfer as a result of pledges made to lenders are not required to be disclosed.

ITEM 15: Principal Securityholders and Selling Securityholders

Principal securityholders and selling securityholders

15.1 (1)  Provide the following information for each principal securityholder of the issuer and, if any securities are being distributed for the account of a securityholder, for each selling securityholder:

    1. the name;
    2. the number or amount of securities owned, controlled or directed of the class being distributed;
    3. the number or amount of securities of the class being distributed for the account of the securityholder;
    4. the number or amount of securities of the issuer of any class to be owned, controlled or directed after the distribution, and the percentage that number or amount represents of the total outstanding;
    5. whether the securities referred to in paragraph (b), (c) or (d) are owned both of record and beneficially, of record only, or beneficially only.

(2)          If securities are being distributed in connection with a restructuring transaction, indicate, to the extent known, the holdings of each person or company described in paragraph (1)(a) that will exist after effect has been given to the transaction.

(3)          If any of the securities being distributed are being distributed for the account of a securityholder and those securities were purchased by the selling securityholder within the two years preceding the date of the prospectus, state the date the selling securityholder acquired the securities and, if the securities were acquired in the 12 months preceding the date of the prospectus, the cost to the securityholder in the aggregate and on an average cost-per-security basis.

(4)          If, to the knowledge of the issuer or the underwriter of the securities being distributed, more than 10% of any class of voting securities of the issuer is held, or is to be held, subject to any voting trust or other similar agreement, disclose, to the extent known, the designation of the securities, the number or amount of the securities held or to be held subject to the agreement and the duration of the agreement. State the names and addresses of the voting trustees and outline briefly their voting rights and other powers under the agreement.

(5)          If, to the knowledge of the issuer or the underwriter of the securities being distributed, any principal securityholder or selling securityholder is an associate or affiliate of another person or company named as a principal securityholder, disclose, to the extent known, the material facts of the relationship, including any basis for influence over the issuer held by the person or company other than the holding of voting securities of the issuer.

(6)          In addition to the above, include in a footnote to the table the required calculation(s) on a fully-diluted basis.

(7)          Describe any material change to the information required to be included in the prospectus under subsection (1) to the date of the prospectus.

INSTRUCTION

If a company, partnership, trust or other unincorporated entity is a principal securityholder of an issuer, disclose, to the extent known, the name of each individual who, through ownership of or control or direction over the securities of that company, trust or other unincorporated entity, or membership in the partnership, as the case may be, is a principal securityholder of that entity.

ITEM 16: Directors and Executive Officers

Name, occupation and security holding

16.1 (1)  Provide information for directors and executive officers of the issuer in accordance with section 10.1 of Form 51-102F2 as at the date of the prospectus.

(2)          If information similar to the information required under subsection (1) is provided for any director or executive officer, who is not serving in such capacity as at the date of the prospectus, clearly indicate this fact and explain whether the issuer believes that this director or executive officer is liable under the prospectus.

Cease trade orders, bankruptcies, penalties or sanctions

16.2       Provide information for directors and executive officers of the issuer in accordance with section 10.2 of Form 51-102F2 as if the references in that section to "date of the AIF" read "date of the prospectus".

Conflicts of interest

16.3       Disclose particulars of existing or potential material conflicts of interest between the issuer or a subsidiary of the issuer and a director or officer of the issuer or of a subsidiary of the issuer.

Management of junior issuers

16.4       A junior issuer must provide the following information for each member of management:

    1. state the individual's name, age, position and responsibilities with the issuer and relevant educational background;
    2. state whether the individual works full time for the issuer or what proportion of the individual's time will be devoted to the issuer;
    3. state whether the individual is an employee or independent contractor of the issuer;
    4. state the individual's principal occupations or employment during the five years before the date of the prospectus, disclosing with respect to each organization as of the time such occupation or employment was carried on:
      1. its name and principal business;
      2. if applicable, that the organization was an affiliate of the issuer;
      3. positions held by the individual; and
      4. whether it is still carrying on business, if known to the individual;
    5. describe the individual's experience in the issuer's industry;
    6. state whether the individual has entered into a non-competition or non-disclosure agreement with the issuer.

INSTRUCTION

For purposes of this section, "management" means all directors, officers, employees and contractors whose expertise is critical to the issuer, its subsidiaries and proposed subsidiaries in providing the issuer with a reasonable opportunity to achieve its stated business objectives.

ITEM 17: Executive Compensation

Disclosure

17.1       Include in the prospectus a Statement of Executive Compensation prepared in accordance with Form 51-102F6 or, if the issuer is a venture issuer or an IPO venture issuer, in accordance with Form 51-102F6 or Form 51-102F6V and describe any intention to make any material changes to that compensation.

ITEM 18: Indebtedness of Directors and Executive Officers

Aggregate indebtedness

18.1       Provide information for the issuer in accordance with section 10.1 of Form 51-102F5 as if the reference in that section to "date of the information circular" read "date of the prospectus ".

Indebtedness of directors and executive officers under securities purchase and other programs

18.2 (1)  Provide information for the issuer in accordance with section 10.2 of Form 51-102F5 as if the reference in this section to "date of the information circular" read "date of the prospectus".

(2)          Do not disclose the information required under subsection (1) for

    1. any indebtedness that has been entirely repaid on or before the date of the prospectus, or
    2. routine indebtedness (as defined in paragraph 10.3(c) of Form 51-102F5 as if reference in this paragraph to "the company" read "the issuer").

ITEM 19: Audit Committees and Corporate Governance

Audit committees

19.1 (1)  Include in the prospectus the disclosure for the issuer in accordance with Form 52-110F1, as applicable, if the issuer is neither a venture issuer nor an IPO venture issuer.

(2)          Include in the prospectus the disclosure for the issuer in accordance with Form 52-110F2, as applicable, if the issuer is a venture issuer or an IPO venture issuer.

Corporate governance

19.2 (1)  Include in the prospectus the disclosure in accordance with Form 58-101F1, as applicable, if the issuer is neither a venture issuer nor an IPO venture issuer.

(2)          Include in the prospectus the disclosure in accordance with Form 58-101F2, as applicable, if the issuer is a venture issuer or an IPO venture issuer.

ITEM 20: Plan of Distribution

Name of underwriters

20.1 (1)  If the securities are being distributed by an underwriter, state the name of the underwriter and describe briefly the nature of the underwriter's obligation to take up and pay for the securities.

(2)          Disclose the date by which the underwriter is obligated to purchase the securities.

Disclosure of conditions to underwriters' obligations

20.2       If securities are distributed by an underwriter that has agreed to purchase all of the securities at a specified price and the underwriter's obligations are subject to conditions,

    1. include a statement in substantially the following form, with the bracketed information completed and with modifications necessary to reflect the terms of the distribution:

"Under an agreement dated [insert date of agreement] between [insert name of issuer or selling securityholder] and [insert name(s) of underwriter(s)], as underwriter[s], [insert name of issuer or selling security shareholder] has agreed to sell and the underwriter[s] [has/have] agreed to purchase on [insert closing date] the securities at a price of [insert offering price], payable in cash to [insert name of issuer or selling securityholder] against delivery. The obligations of the underwriter[s] under the agreement may be terminated at [its/their] discretion on the basis of [describe any “market out”, “disaster out”, “material change out” or similar provision]and may also be terminated upon the occurrence of certain stated events. The underwriter[s] [is/are], however, obligated to take up and pay for all of the securities if any of the securities are purchased under the agreement.", and

    1. describe any other conditions and indicate any information known that is relevant to whether such conditions will be satisfied.

Best efforts offering

20.3       Outline briefly the plan of distribution of any securities being distributed other than on the basis described in section 20.2.

Minimum distribution

20.4       If securities are being distributed on a best efforts basis and minimum funds are to be raised, state

    1. the minimum funds to be raised,
    2. that the issuer must appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practicing member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until the minimum amount of funds stipulated in paragraph (a) has been raised, and
    3. that if the minimum amount of funds is not raised within the distribution period, the trustee must return the funds to the subscribers without any deductions.

Determination of price

20.5       Disclose the method by which the distribution price has been or will be determined and, if estimates have been provided, explain the process of determining the estimates.

Stabilization

20.6       If the issuer, a selling securityholder or an underwriter knows or has reason to believe that there is an intention to over-allot or that the price of any security may be stabilized to facilitate the distribution of the securities, describe the nature of these transactions, including the anticipated size of any over-allocation position, and explain how the transactions are expected to affect the price of the securities.

Approvals

20.7       If the proceeds of the distribution will be used to substantially fund a material undertaking that would constitute a material departure from the business or operations of the issuer and the issuer has not obtained all material licences, registrations and approvals necessary for the stated principal use of proceeds, include a statement that

    1. the issuer will appoint a registered dealer authorized to make the distribution, a Canadian financial institution, or a lawyer who is a practicing member in good standing with a law society of a jurisdiction in which the securities are being distributed, or a notary in Québec, to hold in trust all funds received from subscriptions until all material licences, registrations and approvals necessary for the stated principal use of proceeds have been obtained, and
    2. if all material licences, registrations and approvals necessary for the operation of the material undertaking have not been obtained within 90 days from the date of receipt of the final prospectus, the trustee will return the funds to subscribers.

Reduced price distributions

20.8       If the underwriter may decrease the offering price after the underwriter has made a reasonable effort to sell all of the securities at the initial offering price disclosed in the prospectus in accordance with the procedures permitted by the Instrument, disclose this fact and that the compensation realised by the underwriter will be decreased by the amount that the aggregate price paid by purchasers for the securities is less than the gross proceeds paid by the underwriter to the issuer or selling securityholder.

Listing application

20.9       If application has been made to list or quote the securities being distributed, include a statement, in substantially the following form, with bracketed information completed:

"The issuer has applied to [list/quote] the securities distributed under this prospectus on [name of exchange or other market]. [Listing/Quotation] will be subject to the issuer fulfilling all the listing requirements of [name of exchange or other market]."

Conditional listing approval

20.10     If application has been made to list or quote the securities being distributed on an exchange or marketplace and conditional listing approval has been received, include a statement, in substantially the following form, with the bracketed information completed:

"[name of exchange or marketplace] has conditionally approved the [listing/quotation] of these securities. [Listing/Quotation] is subject to the [name of issuer]'s fulfilling all of the requirements of the [name of exchange or marketplace] on or before [date], [including distribution of these securities to a minimum number of public securityholders]."

IPO venture issuers

20.11     If the issuer has complied with the requirements of the Instrument as an IPO venture issuer, include a statement, in substantially the following form, with bracketed information completed:

"As at the date of the prospectus, [name of issuer] does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside of Canada and the United States of America (other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc.)"

Constraints

20.12     If there are constraints imposed on the ownership of securities of the issuer to ensure that the issuer has a required level of Canadian ownership, describe the mechanism, if any, by which the level of Canadian ownership of the securities of the issuer will be monitored and maintained.

Special warrants acquired by underwriters or agents

20.13     Disclose the number and dollar value of any special warrants acquired by any underwriter or agent and the percentage of the distribution represented by those special warrants.

ITEM 21: Risk Factors

Risk factors

21.1 (1)  Disclose risk factors relating to the issuer and its business, such as cash flow and liquidity problems, if any, experience of management, the general risks inherent in the business carried on by the issuer, environmental and health risks, reliance on key personnel, regulatory constraints, economic or political conditions and financial history and any other matter that would be likely to influence an investor's decision to purchase securities of the issuer.

(2)          If there is a risk that securityholders of the issuer may become liable to make an additional contribution beyond the price of the security, disclose that risk.

(3)          Describe any risk factors material to the issuer that a reasonable investor would consider relevant to an investment in the securities being distributed and that are not otherwise described under subsection (1) or (2).

INSTRUCTIONS

(1)          Disclose risks in the order of seriousness from the most serious to the least serious.

(2)          A risk factor must not be de-emphasized by including excessive caveats or conditions.

ITEM 22: Promoters

Promoters

22.1 (1)  For a person or company that is, or has been within the two years immediately preceding the date of the prospectus, a promoter of the issuer or subsidiary of the issuer, state

    1. the person or company's name,
    2. the number and percentage of each class of voting securities and equity securities of the issuer or any of its subsidiaries beneficially owned, or controlled or directed, directly or indirectly, by the person or company,
    3. the nature and amount of anything of value, including money, property, contracts, options or rights of any kind received or to be received by the promoter directly or indirectly from the issuer or from a subsidiary of the issuer, and the nature and amount of any assets, services or other consideration received or to be received by the issuer or a subsidiary of the issuer in return, and
    4. for an asset acquired within the two years before the date of the preliminary prospectus, or to be acquired, by the issuer or by a subsidiary of the issuer from a promoter,
      1. the consideration paid or to be paid for the asset and the method by which the consideration has been or will be determined,
      2. the person or company making the determination referred to in subparagraph (i) and the person or company's relationship with the issuer or the promoter, or an affiliate of the issuer or the promoter, and
      3. the date that the asset was acquired by the promoter and the cost of the asset to the promoter.

(2)          If a promoter referred to in subsection (1) is, as at the date of the preliminary prospectus, or was within 10 years before the date of the preliminary prospectus, a director, chief executive officer, or chief financial officer of any person or company, that

    1. was subject to an order that was issued while the promoter was acting in the capacity as director, chief executive officer or chief financial officer, or
    2. was subject to an order that was issued after the promoter ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while the promoter was acting in the capacity as director, chief executive officer or chief financial officer,

state the fact and describe the basis on which the order was made and whether the order is still in effect.

(3)          For the purposes of subsection (2), "order" means:

    1. a cease trade order,
    2. an order similar to a cease trade order, or
    3. an order that denied the relevant person or company access to any exemption under securities legislation,

that was in effect for a period of more than 30 consecutive days.

(4)          If a promoter referred to in subsection (1)

    1. is, as at the date of the preliminary prospectus, or has been within the 10 years before the date of the preliminary prospectus, a director or executive officer of any person or company that, while the promoter was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, state the fact, or
    2. has, within the 10 years before the date of the preliminary prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the promoter, state the fact.

(5)          Describe the penalties or sanctions imposed and the grounds on which they were imposed or the terms of the settlement agreement and the circumstances that gave rise to the settlement agreement, if a promoter referred to in subsection (1) has been subject to

    1. any penalties or sanctions imposed by a court relating to provincial and territorial securities legislation or by a provincial and territorial securities regulatory authority or has entered into a settlement agreement with a provincial and territorial securities regulatory authority, or
    2. any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor in making an investment decision.

(6)          Despite subsection (5), no disclosure is required of a settlement agreement entered into before December 31, 2000 unless the disclosure would likely be considered important to a reasonable investor in making an investment decision.

INSTRUCTIONS

(1)          The disclosure required by subsections (2), (4) and (5) also applies to any personal holding companies of any of the persons referred to in subsections (2), (4), and (5).

(2)          A management cease trade order which applies to a promoter referred to in subsection (1) is an "order" for the purposes of paragraph (2)(a) and must be disclosed, whether or not the director, chief executive officer or chief financial officer was named in the order.

(3)          For the purposes of this section, a late filing fee, such as a filing fee that applies to the late filing of an insider report, is not a "penalty or sanction".

(4)          The disclosure in paragraph (2)(a) only applies if the promoter was a director, chief executive officer or chief financial officer when the order was issued against the person or company. The issuer does not have to provide disclosure if the promoter became a director, chief executive officer or chief financial officer after the order was issued.

ITEM 23: Legal Proceedings and Regulatory Actions

Legal proceedings

23.1 (1)  Describe any legal proceedings the issuer is or was a party to, or that any of its property is or was the subject of, since the beginning of the most recently completed financial year for which financial statements of the issuer are included in the prospectus.

(2)          Describe any such legal proceedings the issuer knows to be contemplated.

(3)          For each proceeding described in subsections (1) and (2), include the name of the court or agency, the date instituted, the principal parties to the proceeding, the nature of the claim, the amount claimed, if any, whether the proceeding is being contested, and the present status of the proceeding.

INSTRUCTION

Information with respect to any proceeding that involves a claim for damages if the amount involved, exclusive of interest and costs, does not exceed 10% of the current assets of the issuer may be omitted. However, if any proceeding presents in large degree the same legal and factual issues as other proceedings pending or known to be contemplated, include the amount involved in the other proceedings in computing the percentage.

Regulatory actions

23.2       Describe any

    1. penalties or sanctions imposed against the issuer by a court relating to provincial and territorial securities legislation or by a securities regulatory authority within the three years immediately preceding the date of the prospectus,
    2. any other penalties or sanctions imposed by a court or regulatory body against the issuer necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities being distributed, and
    3. settlement agreements the issuer entered into before a court relating to provincial and territorial securities legislation or with a securities regulatory authority within the three years immediately preceding the date of the prospectus.

ITEM 24: Interests of Management and Others in Material Transactions

Interests of management and others in material transactions

24.1       Provide information for the issuer for this section in accordance with section 13.1 of Form 51-102F2 as if the reference in that section to "within the three most recently completed financial years or during the current financial year that has materially affected or is reasonably expected to materially affect your company" read "within the three years before the date of the prospectus that has materially affected or is reasonably expected to materially affect the issuer or a subsidiary of the issuer".

Underwriting discounts

24.2       Disclose any material underwriting discounts or commissions upon the sale of securities by the issuer if any of the persons or companies listed in section 13.1 of Form 51-102F2 were or are to be an underwriter or are associates, affiliates or partners of a person or company that was or is to be an underwriter.

ITEM 25: Relationship Between Issuer or Selling Securityholder and Underwriter

Relationship between issuer or selling securityholder and underwriter

25.1 (1)  If the issuer or selling securityholder is a connected issuer or related issuer of an underwriter of the distribution, or if the issuer or selling securityholder is also an underwriter of the distribution, comply with the requirements of NI 33-105.

(2)          For the purposes of subsection (1), "connected issuer" and "related issuer" have the same meanings as in NI 33-105.

ITEM 26: Auditors, Transfer Agents and Registrars

Auditors

26.1       State the name and address of the auditor of the issuer.

Auditor that was not a participating audit firm

26.1.1(1)              If the auditor referred to in section 26.1 was not a participating audit firm, as defined in NI 52-108, as at the date of the most recent auditor's report on financial statements included in the prospectus, include a statement in substantially the following form:

"[Audit Firm A] audited the financial statements of [Entity B] for the year ended [state the period of the most recent financial statements included in the prospectus] and issued an auditor's report dated [state the date of the auditor's report for the relevant financial statements]. As at [state the date of the auditor's report for the relevant financial statements], [Audit Firm A] was not required by securities legislation to enter, and had not entered, into a participation agreement with the Canadian Public Accountability Board. An audit firm that enters into a participation agreement is subject to the oversight program of the Canadian Public Accountability Board."

(2)          If an auditor of the financial statements required by Item 32 was not a participating audit firm, as defined in NI 52-108, as at the date of the most recent auditor's report issued by that auditor on financial statements included in the prospectus, include a statement in substantially the following form:

"[Audit Firm C] audited the financial statements of [Entity D] for the year ended [state the period of the most recent financial statements, if any, included in the prospectus under Item 32] and issued an auditor's report dated [state the date of the auditor's report for the relevant financial statements]. As at [state the date of the auditor's report for the relevant financial statements], [Audit Firm C] was not required by securities legislation to enter, and had not entered, into a participation agreement with the Canadian Public Accountability Board. An audit firm that enters into a participation agreement is subject to the oversight program of the Canadian Public Accountability Board.

Transfer agents, registrars, trustees or other agents

26.2       For each class of securities, state the name of any transfer agent, registrar, trustee, or other agent appointed by the issuer to maintain the securities register and the register of transfers for such securities and indicate the location (by municipality) of each of the offices of the issuer or transfer agent, registrar, trustee or other agent where the securities register and register of transfers are maintained or transfers of securities are recorded.

ITEM 27: Material Contracts

Material contracts

27.1       Give particulars of any material contract

    1. required to be filed under section 9.3 of the Instrument, or
    2. that would be required to be filed under section 9.3 of the Instrument but for the fact that it was previously filed.

INSTRUCTIONS

(1)          Set out a complete list of all contracts for which particulars must be given under this section, indicating those that are disclosed elsewhere in the prospectus. Particulars need only be provided for those contracts that do not have the particulars given elsewhere in the prospectus.

(2)          Particulars of contracts must include the dates of, parties to, consideration provided for in, and general nature and key terms of, the contracts.

ITEM 28: Experts

Names of experts

28.1       Name each person or company

    1. who is named as having prepared or certified a report, valuation, statement or opinion in the prospectus or an amendment to the prospectus, and
    2. whose profession or business gives authority to the report, valuation, statement or opinion made by the person or company.

Interest of experts

28.2       For each person or company referred to in section 28.1, provide the disclosure in accordance with section 16.2 of Form 51-102F2, as of the date of the prospectus, as if that person or company were a person or company referred to in section 16.1 of Form 51-102F2.

ITEM 29: Other Material Facts

Other material facts

29.1       Give particulars of any material facts about the securities being distributed that are not disclosed under any other Items and are necessary in order for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed.

ITEM 30: Rights of Withdrawal and Rescission

General

30.1       Include a statement in substantially the following form, with the bracketed information completed:

"Securities legislation in [certain of the provinces [and territories] of Canada/the Province of [insert name of local jurisdiction, if applicable]] provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. [In several of the provinces/provinces and territories,] [T/t]he securities legislation further provides a purchaser with remedies for rescission [or[, in some jurisdictions,] revisions of the price or damages] if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission[, revisions of the price or damages] are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province [or territory]. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province [or territory] for the particulars of these rights or consult with a legal adviser."

Non-fixed price offerings

30.2       In the case of a non-fixed price offering, replace, if applicable in the jurisdiction in which the prospectus is filed, the second sentence in the legend in section 30.1 with a statement in substantially the following form:

"This right may only be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment, irrespective of the determination at a later date of the purchase price of the securities distributed."

Convertible, exchangeable or exercisable securities

 

30.3       In the case of an offering of convertible, exchangeable or exercisable securities in which additional amounts are payable or may become payable upon conversion, exchange or exercise, provide a statement in the following form:

“In an offering of [state name of convertible, exchangeable or exercisable securities], investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial [and territorial] securities legislation, to the price at which the [state name of convertible, exchangeable or exercisable securities] is offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces [and territories], if the purchaser pays additional amounts upon [conversion, exchange or exercise] of the security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces [and territories]. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province [or territory] for the particulars of this right of action for damages or consult with a legal adviser.”

ITEM 31: List of Exemptions from Instrument

List of exemptions from Instrument

31.1       List all exemptions from the provisions of the Instrument, including this Form, granted to the issuer applicable to the distribution or the prospectus, including all exemptions to be evidenced by the issuance of a receipt for the prospectus pursuant to section 19.3 of the Instrument.

ITEM 32: Financial Statement Disclosure for Issuers

Interpretation of "issuer"

32.1(1)   Subject to subsection (2), the financial statements of an issuer required under this Item to be included in a prospectus must include

    1. the financial statements of any predecessor entity that formed, or will form, the basis of the business of the issuer, even though the predecessor entity is, or may have been, a different legal entity, if the issuer has not existed for three years,
    2. the financial statements of a business or businesses acquired by the issuer within three years before the date of the prospectus or proposed to be acquired, if a reasonable investor reading the prospectus would regard the primary business of the issuer to be the business or businesses acquired, or proposed to be acquired, by the issuer, and
    3. the restated combined financial statements of the issuer and any other entity with which the issuer completed a transaction within three years before the date of the prospectus or proposes to complete a transaction, if the issuer accounted for or will account for the transaction as a combination in which all of the combining entities or businesses ultimately are controlled by the same party or parties both before and after the combination, and that control is not temporary.

(2)          An issuer is not required to include the financial statements for an acquisition to which paragraph (1)(a) or (b) applies if

    1. the issuer was a reporting issuer in any jurisdiction of Canada
      1. on the date of the acquisition, in the case of a completed acquisition; or
      2. immediately before the filing of the prospectus, in the case of a proposed acquisition;
    2. the issuer’s principal asset before the acquisition is not cash, cash equivalents, or its exchange listing; and
    3. the issuer provides disclosure in respect of the proposed or completed acquisition in accordance with Item 35.

Annual financial statements

32.2 (1)  Subject to section 32.4, include annual financial statements of the issuer consisting of

    1. a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows for each of the three most recently completed financial years ended more than
      1. 90 days before the date of the prospectus, or
      2. 120 days before the date of the prospectus, if the issuer is a venture issuer,
    2. a statement of financial position as at the end of the two most recently completed financial years described in paragraph (a),
    3. a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that
      1. discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
      2. does any of the following
        1. applies an accounting policy retrospectively in its annual financial statements,
        2. makes a retrospective restatement of items in its annual financial statements, or
        3. reclassifies items in its annual financial statements,
    4. in the case of an issuer's first IFRS financial statements, the opening IFRS statement of financial position at the date of transition to IFRS, and
    5. notes to the annual financial statements.

(1.1)       If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (1).

(2)          If the issuer has not completed three financial years, include the financial statements described under subsection (1) for each completed financial year ended more than

    1. 90 days before the date of the prospectus, or
    2. 120 days before the date of the prospectus, if the issuer is a venture issuer.

(3)          If the issuer has not included in the prospectus financial statements for a completed financial year, include the financial statements described under subsection (1) or (2) for a period from the date the issuer was formed to a date not more than 90 days before the date of the prospectus.

(4)          If an issuer changed its financial year end during any of the financial years referred to in this section and the transition year is less than nine months, the transition year is deemed not to be a financial year for the purposes of the requirement to provide financial statements for a specified number of financial years in this section.

(5)          Despite subsection (4), all financial statements of the issuer for a transition year referred to in subsection (4) must be included in the prospectus.

(6)          Subject to section 32.4, if financial statements of any predecessor entity, business or businesses acquired by the issuer, or of any other entity are required under this section, then include

    1. statements of comprehensive income, statements of changes in equity, and statements of cash flow for the entities or businesses for as many periods before the acquisition as may be necessary so that when these periods are added to the periods for which the issuer's statements of comprehensive income, statements of changes in equity, and statements of cash flow are included in the prospectus, the results of the entities or businesses, either separately or on a consolidated basis, total three years,
    2. statements of financial position for the entities or businesses for as many periods before the acquisition as may be necessary so that when these periods are added to the periods for which the issuer's statements of financial position are included in the prospectus, the financial position of the entities or businesses, either separately or on a consolidated basis, total two years,
    3. if the entities or businesses have not completed three financial years, the financial statements described under paragraphs (a) and (b) for each completed financial year of the entities or businesses for which the issuer's financial statements in the prospectus do not include the financial statements of the entities or businesses, either separately or on a consolidated basis, and ended more than
      1. 90 days before the date of the prospectus, or
      2. 120 days before the date of the prospectus, if the issuer is a venture issuer,
    4. if an entity's or business's first IFRS financial statements are included under paragraphs (a), (b) or (c), the opening IFRS statement of financial position at the date of transition to IFRS, and
    5. a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that
      1. discloses in its annual financial statements an unreserved statement of compliance with IFRS, and
      2. does any of the following
        1. applies an accounting policy retrospectively in its financial statements,
        2. makes a retrospective restatement of items in its financial statements, or
        3. reclassifies items in its financial statements.

Interim financial report

32.3 (1)  Include a comparative interim financial report of the issuer for the most recent interim period, if any, ended

    1. subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the prospectus, and
    2. more than
      1. 45 days before the date of the prospectus, or
      2. 60 days before the date of the prospectus if the issuer is a venture issuer.

(2)          The interim financial report referred to in subsection (1) must include

    1. a statement of financial position as at the end of the interim period and a statement of financial position as at the end of the immediately preceding financial year, if any,
    2. a statement of comprehensive income, a statement of changes in equity, and a statement of cash flows, all for the year-to-date interim period, and comparative financial information for the corresponding interim period in the immediately preceding financial year, if any,
    3. for interim periods other than the first interim period in an issuer's financial year, a statement of comprehensive income for the three month period ending on the last day of the interim period and comparative financial information for the corresponding period in the immediately preceding financial year, if any,
    4. a statement of financial position as at the beginning of the earliest comparative period for which financial statements that are included in the prospectus comply with IFRS in the case of an issuer that
      1. discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
      2. does any of the following
        1. applies an accounting policy retrospectively in its interim financial report,
        2. makes a retrospective restatement of items in its interim financial report, or
        3. reclassifies items in its interim financial report,
    5. in the case of the first interim financial report required to be filed in the year of adopting IFRS, the opening IFRS statement of financial position at the date of transition to IFRS, and
    6. notes to the interim financial report.

(3) If an issuer presents the components of profit or loss in a separate income statement, the separate income statement must be displayed immediately before the statement of comprehensive income filed under subsection (2).

(4)          If the issuer is required to include under subsection 32.3(1), a comparative interim financial report of the issuer for the second or third interim period in the year of adopting IFRS, include

    1. the issuer's first interim financial report in the year of adopting IFRS, or
    2. both
      1. the opening IFRS statement of financial position at the date of transition to IFRS, and
      2. the annual and date of transition to IFRS reconciliations required by IFRS 1 First-time Adoption of International Financial Reporting Standards to explain how the transition from previous GAAP to IFRS affected the issuer's reported financial position, financial performance and cash flows.

(5)          Subsection (4) does not apply to an issuer that was a reporting issuer in at least one jurisdiction immediately before filing the prospectus.

Exceptions to financial statement requirements

32.4(1)   Despite section 32.2, an issuer is not required to include the following financial statements in a prospectus

    1. the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, if the issuer is
      1. an IPO venture issuer, or
      2. a reporting issuer in at least one jurisdiction immediately before filing the prospectus,
    2. the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the financial statements for the second most recently completed financial year, if
      1. the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus, and
      2. the issuer includes financial statements for a financial year ended less than
        1. 90 days before the date of the prospectus, or
        2. 120 days before the date of the prospectus, if the issuer is a venture issuer,
    3. the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the statement of financial position for the second most recently completed financial year, if the issuer includes financial statements for a financial year ended less than 90 days before the date of the prospectus,
    4. the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the financial statements for the second most recently completed financial year, if
      1. the issuer is a reporting issuer in at least one jurisdiction immediately before filing the prospectus,
      2. the issuer includes audited financial statements for a period of at least nine months commencing the day after the most recently completed financial year for which financial statements are required under section 32.2,
      3. the business of the issuer is not seasonal, and
      4. none of the financial statements required under section 32.2 are for a financial year that is less than nine months,
    5. the statement of comprehensive income, the statement of changes in equity, and the statement of cash flows for the third most recently completed financial year, and the statement of financial position for the second most recently completed financial year, if
      1. the issuer includes audited financial statements for a period of at least nine months commencing the day after the most recently completed financial year for which financial statements are required under section 32.2,
      2. the business of the issuer is not seasonal, and
      3. none of the financial statements required under section 32.2 are for a financial year that is less than nine months, or
    6. the separate financial statements of the issuer and the other entity for periods prior to the date of the transaction, if the restated combined financial statements of the issuer and the other entity are included in the prospectus under paragraph 32.1(c).

(2)          Paragraphs (1)(a), (b) and (d) do not apply to an issuer

    1. whose principal asset is cash, cash equivalents or its exchange listing; or
    2. in respect of financial statements of a reverse takeover acquirer for a completed or proposed transaction by the issuer that was or will be accounted for as a reverse takeover.

 

Exceptions to audit requirement

32.5       The audit requirement in section 4.2 of the Instrument does not apply to the following financial statements

    1. any financial statements for the second and third most recently completed financial years required under section 32.2, if
      1. those financial statements were previously included in a final prospectus without an auditor's report pursuant to an exemption under applicable securities legislation, and
      2. an auditor has not issued an auditor's report on those financial statements,
    2. any financial statements for the second and third most recently completed financial years required under section 32.2, if
      1. the issuer is a junior issuer,

(i.1)        an auditor has not issued an auditor’s report on those financial statements, and

      1. the financial statements for the most recently completed financial year required under section 32.2 is not less than 12 months in length, or
    1. any interim financial report required under section 32.3.

Additional financial statements or financial information filed or released

32.6 (1)  If the issuer files financial statements for a more recent period than required under section 32.2 or 32.3 before the prospectus is filed, the issuer must include in the prospectus those more recent financial statements.

(2)          If historical financial information about the issuer is publicly disseminated by, or on behalf of, the issuer through news release or otherwise for a more recent period than required under section 32.2, the issuer must include the content of the news release or public communication in the prospectus.

Pro forma financial statements for an acquisition

32.7 (1)  An issuer must include in the prospectus the pro forma financial information set out in subsection (2) if

    1. the issuer has completed or proposes an acquisition of a business for which financial statement disclosure is required under section 32.1;
    2. less than nine months of the acquired business operations have been reflected in the issuer’s most recent audited financial statements included in the prospectus; and
    3. the inclusion of the pro forma financial statements is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed.

(2)          For the purposes of subsection (1), include the following:

    1. a pro forma statement of financial position of the issuer, as at the date of the issuer’s most recent statement of financial position included in the prospectus, that gives effect, as if it had taken place as at the date of the pro forma statement of financial position, to the acquisition that has been completed, or is expected to be completed, but is not reflected in the issuer’s most recent statement of financial position for an annual or interim period;
    2. a pro forma income statement of the issuer that gives effect to the acquisition completed, or expected to be completed, since the beginning of the issuer’s most recently completed financial year for which it has included financial statements in its prospectus, as if it had taken place at the beginning of that financial year, for each of the following periods:
      1. the most recently completed financial year for which the issuer has included financial statements in its prospectus; and
      2. the interim period for which the issuer has included an interim financial report in its prospectus, that started after the financial year referred to in subparagraph (i) and ended
        1. in the case of a completed acquisition, immediately before the acquisition date or, in the issuer’s discretion, after the acquisition date;
        2. in the case of a proposed acquisition, immediately before the date of the filing of the prospectus, as if the acquisition had been completed before the filing of the prospectus and the acquisition date were the date of the prospectus; and
    3. pro forma earnings per share based on the pro forma financial statements referred to in paragraph (b).

(3)          If an issuer is required to include pro forma financial statements in its prospectus under subsection (1),

    1. in the case where the pro forma financial statements give effect to more than one acquisition, the issuer must identify in the pro forma financial statements each acquisition,
    2. the issuer must include in the pro forma financial statements
      1. adjustments attributable to the acquisition for which there are firm commitments and for which the complete financial effects are objectively determinable;
      2. adjustments to conform amounts for the business to the issuer’s accounting policies; and
      3. a description of the underlying assumptions on which the pro forma financial statements are prepared, cross-referenced to each related pro forma adjustment;
    3. in the case where the financial year-end of the business differs from the issuer’s year-end by more than 93 days, for the purpose of preparing the pro forma income statement of the issuer’s most recently completed financial year, the issuer must construct an income statement of the business for a period of 12 consecutive months ending no more than 93 days before or after the issuer’s year-end, by adding the results for a subsequent interim period to a completed financial year of the business and deducting the comparable interim results for the immediately preceding year;
    4. in the case where a constructed income statement is required under paragraph (c), the pro forma financial statements must disclose the period covered by the constructed income statement on the face of the pro forma financial statements and must include a note stating that the financial statements of the business used to prepare the pro forma financial statements were prepared for the purpose of the pro forma financial statements and do not conform with the financial statements for the business included elsewhere in the prospectus;
    5. in the case where an issuer is required to prepare a pro forma income statement for an interim period required by paragraph (2)(b), and the pro forma income statement for the most recently completed financial year includes results of the business which are also included in the pro forma income statement for the interim period, the issuer must disclose in a note to the pro forma financial statements the revenue, expenses, and profit or loss from continuing operations included in each pro forma income statement for the overlapping period; and
    6. a constructed period referred to in paragraph (c) does not have to be audited.

Pro forma financial statements for multiple acquisitions

32.8       Despite subsection 32.7(1), an issuer is not required to include in its prospectus the pro forma financial statements otherwise required for each acquisition if the issuer includes in its prospectus one set of pro forma financial statements that

    1. reflects the results of each acquisition since the beginning of the issuer’s most recently completed financial year for which financial statements of the issuer are included in the prospectus, and
    2. is prepared as if each acquisition had occurred at the beginning of the most recently completed financial year of the issuer for which financial statements of the issuer are included in the prospectus

Exemption from financial statement disclosure for oil & gas acquisitions

32.9(1)   In the case where sections 32.2, 32.3 and 32.7 apply to a completed or proposed acquisition by operation of section 32.1, those sections do not apply if

    1. the acquisition is an acquisition of a business which is an interest in an oil and gas property;
    2. the acquisition is not an acquisition of securities of another issuer, unless the vendor transferred the business referenced in paragraph (1)(a) to the other issuer and that other issuer
      1. was created for the sole purpose of facilitating the acquisition; and
      2. other than assets or operations relating to the transferred business, has no
        1. substantial assets; or
        2. operating history;
    3. the issuer is unable to provide the financial statements in respect of the acquisition otherwise required under sections 32.2 and 32.3 because those financial statements do not exist or because the issuer does not have access to those financial statements;
    4. the acquisition does not constitute a reverse takeover;
    5. subject to subsections (2) and (3), in respect of the business for each of the financial periods for which financial statements would, but for this section, be required under sections 32.2 and 32.3, the prospectus includes
      1. an operating statement for the business prepared in accordance with section 3.17 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;
      2. a pro forma operating statement of the issuer that gives effect to the acquisition completed or to be completed since the beginning of the issuer’s most recently completed financial year for which financial statements are required to be included in the prospectus, as if the acquisition had taken place at the beginning of that financial year, for each of the financial periods referred to in paragraph 32.7(2)(b), unless
        1. more than nine months of the acquired business operations have been reflected in the issuer’s most recent audited financial statements included in the prospectus; or
        2. the inclusion of the pro forma financial statements is not necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed;
      3. a description of the property or properties and the interest acquired by the issuer; and
      4. disclosure of the annual oil and gas production volumes from the business;
    6. the operating statement for the three most recently completed financial years has been audited;
    7. the prospectus discloses
      1. the estimated reserves and related future net revenue attributable to the business, the material assumptions used in preparing the estimates and the identity and relationship to the issuer or to the vendor of the person who prepared the estimates; and
      2. the estimated oil and gas production volumes from the business for the first year reflected in the estimated disclosure under subparagraph (i).

(2)          Subparagraphs (1)(e)(i), (ii) and (iv) do not apply if production, gross sales, royalties, production costs and operating income were nil, or are reasonably expected to be nil for the business for each financial period and the prospectus discloses that fact. 

(3)          Paragraphs (1)(e) and (f) do not apply in respect of the third most recently completed financial year if the issuer has completed the acquisition and has included in the prospectus the following:

    1. information in accordance with Form 51-101F1 as at a date commencing on or after the acquisition date and within 6 months of the date of the preliminary prospectus;
    2. a report in the form of Form 51-101F2 on the reserves data included in the disclosure required under paragraph (a);
    3. a report in the form of Form 51-101F3 that refers to the information disclosed under paragraph (a).

ITEM 33: Credit Supporter Disclosure, Including Financial Statements

Credit supporter disclosure, including financial statements

33.1       If a credit supporter has provided a guarantee or alternative credit support for all or substantially all of the payments to be made under the securities being distributed, include statements by the credit supporter providing disclosure about the credit supporter that would be required under Items 4, 5, 8, 9, 16, 21, 23, 25, 26, and 32 if the credit supporter were the issuer of the securities to be distributed and such other information about the credit supporter as is necessary to provide full, true and plain disclosure of all material facts relating to the securities to be distributed.

ITEM 34: Exemptions for Certain Issues of Guaranteed Securities

Definitions and interpretation

34.1 (1)  In this Item

    1. the impact of subsidiaries, on a combined basis, on the financial statements of the parent entity is "minor" if each item of the summary financial information of the subsidiaries, on a combined basis, represents less than three percent of the total consolidated amounts,
    2. a parent entity has "limited independent operations" if each item of its summary financial information represents less than three percent of the total consolidated amounts,
    3. a subsidiary is a "finance subsidiary" if it has minimal assets, operations, revenue or cash flows other than those related to the issuance, administration and repayment of the security being distributed and any other securities guaranteed by its parent entity,
    4. "parent credit supporter" means a credit supporter of which the issuer is a subsidiary,
    5. "parent entity" means a parent credit supporter for the purposes of sections 34.2 and 34.3 and an issuer for the purpose of section 34.4,
    6. "subsidiary credit supporter" means a credit supporter that is a subsidiary of the parent credit supporter, and
    7. "summary financial information" includes the following line items:
      1. revenue;
      2. profit or loss from continuing operations attributable to owners of the parent;
      3. profit or loss attributable to owners of the parent; and
      4. unless the accounting principles used to prepare the financial statements of the entity permits the preparation of the entity's statement of financial position without classifying assets and liabilities between current and non-current and the entity provides alternative meaningful financial information which is more appropriate to the industry,
        1. current assets;
        2. non-current assets;
        3. current liabilities; and
        4. non-current liabilities.

INSTRUCTION

See section 1.1 of the Instrument for the definitions of "profit or loss attributable to owners of the parent" and "profit or loss from continuing operations attributable to owners of the parent".

(2)          For the purposes of this Item, consolidating summary financial information must be prepared on the following basis

    1. an entity's annual or interim summary financial information must be derived from the entity's financial information underlying the corresponding consolidated financial statements of the parent entity included in the prospectus,
    2. the parent entity column must account for investments in all subsidiaries under the equity method, and
    3. all subsidiary entity columns must account for investments in non-credit supporter subsidiaries under the equity method.

Issuer is wholly-owned subsidiary of parent credit supporter

34.2       An issuer is not required to include the issuer disclosure required by Items 4, 5, 8, 9, 21, 23, 25, 26, and 32, if

    1. a parent credit supporter has provided full and unconditional credit support for the securities being distributed,
    2. the securities being distributed are non-convertible debt securities, non-convertible preferred shares, or convertible debt securities or convertible preferred shares that are convertible, in each case, into non-convertible securities of the parent credit supporter,
    3. the parent credit supporter is the beneficial owner of all the issued and outstanding voting securities of the issuer,
    4. no other subsidiary of the parent credit supporter has provided a guarantee or alternative credit support for all or substantially all of the payments to be made under the securities being distributed, and
    5. the issuer includes in the prospectus
      1. a statement that the financial results of the issuer are included in the consolidated financial results of the parent credit supporter, if
        1. the issuer is a finance subsidiary, and
        2. the impact of any subsidiaries of the parent credit supporter on a combined basis, excluding the issuer, on the consolidated financial statements of the parent credit supporter is minor, or
      2. for the periods covered by the parent credit supporter's consolidated interim financial report and consolidated annual financial statements included in the prospectus under Item 33, consolidating summary financial information for the parent credit supporter presented with a separate column for each of the following:
        1. the parent credit supporter;
        2. the issuer;
        3. any other subsidiaries of the parent credit supporter on a combined basis;
        4. consolidating adjustments;
        5. the total consolidated amounts.

Issuer is wholly-owned subsidiary of, and one or more subsidiary credit supporters controlled by, parent credit supporter

34.3 (1)  An issuer is not required to include the issuer disclosure required by Items 4, 5, 8, 9, 21, 23, 25, 26, and 32, or the credit supporter disclosure of one or more subsidiary credit supporters required by Item 33, if

    1. a parent credit supporter and one or more subsidiary credit supporters have each provided full and unconditional credit support for the securities being distributed,
    2. the guarantees or alternative credit supports are joint and several,
    3. the securities being distributed are non-convertible debt securities, non-convertible preferred shares, or convertible debt securities or convertible preferred shares that are convertible, in each case, into non-convertible securities of the parent credit supporter,
    4. the parent credit supporter is the beneficial owner of all the issued and outstanding voting securities of the issuer,
    5. the parent credit supporter controls each subsidiary credit supporter and the parent credit support has consolidated the financial statements of each subsidiary credit supporter into the parent credit supporter's financial statements that are included in the prospectus, and
    6. the issuer includes in the prospectus, for the periods covered by the parent credit supporter's financial statements included in the prospectus under Item 33, consolidating summary financial information for the parent credit supporter presented with a separate column for each of the following:
      1. the parent credit supporter;
      2. the issuer;
      3. each subsidiary credit supporter on a combined basis;
      4. any other subsidiaries of the parent credit supporter on a combined basis;
      5. consolidating adjustments;
      6. the total consolidated amounts.

(2)          Despite paragraph (1)(f), the information set out in a column in accordance with

    1. subparagraph (1)(f)(iv) may be combined with the information set out in accordance with any of the other columns in paragraph (1)(f) if the impact of any subsidiaries of the parent credit supporter on a combined basis, excluding the issuer and all subsidiary credit supporters, on the consolidated financial statements of the parent credit supporter is minor, and
    2. subparagraph (1)(f)(ii), may be combined with the information set out in accordance with any of the other columns in paragraph (1)(f) if the issuer is a finance subsidiary.

One or more credit supporters controlled by issuer

34.4       An issuer is not required to include the credit supporter disclosure for one or more credit supporters required by Item 33, if

    1. one or more credit supporters have each provided full and unconditional credit support for the securities being distributed,
    2. there is more than one credit supporter, the guarantee or alternative credit supports are joint and several,
    3. the securities being distributed are non-convertible debt securities, non-convertible preferred shares, or convertible debt securities or convertible preferred shares that are convertible, in each case, into non-convertible securities of the issuer,
    4. the issuer controls each credit supporter and the issuer has consolidated the financial statements of each credit supporter into the issuer's financial statements that are included in the prospectus, and
    5. the issuer includes in the prospectus
      1. a statement that the financial results of the credit supporter(s) are included in the consolidated financial results of the issuer, if
        1. the issuer has limited independent operations, and
        2. the impact of any subsidiaries of the issuer on a combined basis, excluding the credit supporter(s) but including any subsidiaries of the credit supporter(s) that are not themselves credit supporters, on the consolidated financial statements of the issuer is minor, or
      2. for the periods covered by the issuer's financial statements included in the prospectus under Item 32, consolidating summary financial information for the issuer, presented with a separate column for each of the following:
        1. the issuer;
        2. the credit supporters on a combined basis;
        3. any other subsidiaries of the issuer on a combined basis;
        4. consolidating adjustments;
        5. the total consolidated amounts.

ITEM 35: Significant Acquisitions

Application and definitions

35.1 (1)  This Item does not apply to

    1. a completed or proposed transaction by the issuer that was or will be a reverse takeover or a transaction that is a proposed reverse takeover that has progressed to a state where a reasonable person would believe that the likelihood of the reverse takeover being completed is high; or
    2. a completed or proposed acquisition
      1. by the issuer if
        1. the issuer’s principal asset before the acquisition is cash, cash equivalents or its exchange listing; or
        2. the issuer was not a reporting issuer in any jurisdiction
  1. on the acquisition date, in the case of a completed acquisition; and
  2. immediately before filing the prospectus, in the case of a proposed acquisition; and
      1. to which Item 32 applies by operation of section 32.1.

(2)          [Repealed]

(3)          The audit requirement in section 4.2 of the Instrument does not apply to any financial statements or other information included in the prospectus under this Item, other than the financial statements or other information for the most recently completed financial year of a business or related businesses acquired, or proposed to be acquired, by the issuer.

(4)          In this Item, "significant acquisition" means an acquisition of a business or related businesses that,

    1. if the issuer was a reporting issuer in at least one jurisdiction on the acquisition date, is determined to be a significant acquisition under section 8.3 of NI 51-102, or
    2. if the issuer was not a reporting issuer in any jurisdiction on the acquisition date, would be determined to be a significant acquisition under section 8.3 of NI 51-102, as if
      1. the issuer was a reporting issuer on the acquisition date,
      2. the references to a "venture issuer" were read as an "IPO venture issuer" if the issuer is an IPO venture issuer,
      3. for the purposes of the optional tests, the issuer used its financial statements for the most recently completed interim period or financial year that is included in the prospectus,
      4. for the purposes of the optional profit or loss test, the most recently completed financial year of the business or related businesses were the financial year of the business ended before the date of the prospectus, and the 12 months ended on the last day of the most recently completed interim period of the business or related businesses were the 12 months ended on the last day of the most recently completed interim period before the date of the prospectus,
      5. subsection 8.3(11.1) of NI 51-102 did not apply,
      6. references to "audited annual statements filed" meant "audited annual financial statements included in the long form prospectus", and
      7. in subsection 8.3(15) of NI 51-102, the reference to "been required to file, and has not filed," meant "been required to include, and has not included, in the long form prospectus".

Completed acquisitions for which issuer has filed business acquisition report

35.2       If an issuer completed an acquisition of a business or related businesses since the beginning of its most recently completed financial year for which financial statements are included in the prospectus, and it has filed a business acquisition report under Part 8 of NI 51-102 for the acquisition, include all of the disclosure included in, or incorporated by reference into, that business acquisition report.

Completed acquisitions for which issuer has not filed business acquisition report because issuer was not reporting issuer on acquisition date

35.3 (1)  An issuer must include the disclosure required under subsection (2), if

    1. the issuer completed an acquisition of a business or related businesses since the beginning of the issuer's most recently completed financial year for which financial statements of the issuer are included in the prospectus,
    2. the issuer was not a reporting issuer in any jurisdiction on the acquisition date,
    3. the acquisition is a significant acquisition, and
    4. the acquisition date was more than
      1. 90 days before the date of the prospectus, if the financial year of the acquired business ended 45 days or less before the acquisition, or
      2. 75 days before the date of the prospectus.

(2)          For an acquisition to which subsection (1) applies, include all the disclosure that would be required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of NI 51-102, as if

    1. the issuer was a reporting issuer in at least one jurisdiction on the acquisition date,
    2. the business acquisition report was filed as at the date of the prospectus,
    3. the issuer was a venture issuer at the acquisition date, if the issuer is an IPO venture issuer,
    4. subsections 8.4(4) and 8.4(6) of NI 51-102 did not apply, and
    5. references to financial statements filed or required to be filed meant financial statements included in the prospectus.

Financial performance consolidated in financial statements of issuer

35.4       Despite section 35.2 and subsection 35.3(1), an issuer may omit the financial statements or other information of a business required to be included in the prospectus, if at least nine months of the acquired business or related businesses financial performance have been reflected in the issuer's most recent audited financial statements included in the prospectus.

Recently completed acquisitions

35.5 (1)  Include the information required under subsection (2) for any significant acquisition completed by the issuer

    1. since the beginning of the issuer's most recently completed financial year for which financial statements of the issuer are included in the prospectus, and
    2. for which the issuer has not included any disclosure under section 35.2 or subsection 35.3(2).

(2)          For a significant acquisition to which subsection (1) applies, include the following

    1. the information required by sections 2.1 through 2.6 of Form 51-102F4, and
    2. the financial statements of or other information about the acquisition under subsection (3) for the acquired business or related businesses, if
      1. the issuer was not a reporting issuer in any jurisdiction immediately before filing the prospectus, or
      2. the issuer was a reporting issuer in at least one jurisdiction immediately before filing the prospectus, and the inclusion of the financial statements or other information is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed.

(3)          The requirement to include financial statements or other information under paragraph (2)(b) must be satisfied by including

    1. if the issuer was a reporting issuer in at least one jurisdiction on the acquisition date, the financial statements or other information that will be required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of NI 51-102,
    2. if the issuer was not a reporting issuer in any jurisdiction on the acquisition date, the financial statements or other information that would be required by subsection 35.3(2), or
    3. satisfactory alternative financial statements or other information.

Probable acquisitions

35.6 (1)  Include the information required under subsection (2) for any proposed acquisition of a business or related businesses by an issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high, and that, if completed by the issuer at the date of the prospectus, would be a significant acquisition.

(2)          For a proposed acquisition of a business or related businesses by the issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high and to which subsection (1) applies, include

    1. the information required by sections 2.1 through 2.6 of Form 51-102F4, modified as necessary to convey that the acquisition has not been completed, and
    2. the financial statements or other information of the probable acquisition under subsection (3) for the acquired business or related businesses, if
      1. the issuer was not a reporting issuer in any jurisdiction immediately before filing the prospectus, or
      2. the issuer was a reporting issuer in at least one jurisdiction immediately before filing the prospectus, and the inclusion of the financial statements or other information is necessary for the prospectus to contain full, true and plain disclosure of all material facts relating to the securities to be distributed.

(3)          For a proposed acquisition of a business or related businesses by the issuer that has progressed to a state where a reasonable person would believe that the likelihood of the issuer completing the acquisition is high and to which subsection (2) applies, the requirement to include financial statements or other information under subsection (2)(b) must be satisfied by including

    1. if the issuer was a reporting issuer in at least one jurisdiction immediately before filing the prospectus, the financial statements or other information that would be required to be included in, or incorporated by reference into, a business acquisition report filed under Part 8 of NI 51-102, as if the acquisition date were the date of the prospectus,
    2. if the issuer was not a reporting issuer in any jurisdiction immediately before filing the prospectus, the financial statements or other information that would be required to be included by subsection 35.3(2), as if the acquisition had been completed before the filing of the prospectus and the acquisition date were the date of the prospectus, or
    3. satisfactory alternative financial statements or other information.

Pro forma financial statements for multiple acquisitions

35.7       Despite sections 35.2, 35.3, 35.5 and 35.6, an issuer is not required to include in its prospectus the pro forma financial statements otherwise required for each acquisition, if the issuer includes in its prospectus one set of pro forma financial statements that

    1. reflects the results of each acquisition since the beginning of the issuer's most recently completed financial year for which financial statements of the issuer are included in the prospectus,
    2. is prepared as if each acquisition had occurred at the beginning of the most recently completed financial year of the issuer for which financial statements of the issuer are included in the prospectus, and
    3. is prepared in accordance with
      1. if no disclosure is otherwise required for a probable acquisition under section 35.6, the section in this Item that applies to the most recently completed acquisition, or
      2. section 35.6.

Additional financial statements or financial information of business filed or released

35.8 (1)  An issuer must include in its prospectus annual financial statements and an interim financial report of a business or related businesses for a financial period that ended before the acquisition date and is more recent than the periods for which financial statements are required under section 35.5 or 35.6 if, before the prospectus is filed, the financial statements of the business for the more recent period have been filed.

(2)          If, before the prospectus is filed, historical financial information of a business or related businesses for a period more recent than the period for which financial statements are required under section 35.5 or 35.6, is publicly disseminated by news release or otherwise by or on behalf of the issuer, the issuer shall include in the prospectus the content of the news release or public communication.

ITEM 36: Probable Reverse Takeovers

Probable reverse takeovers

36.1       If the issuer is involved in a proposed reverse takeover that has progressed to a state where a reasonable person would believe that the likelihood of the reverse takeover being completed is high, include statements by the reverse takeover acquirer providing disclosure about the reverse takeover acquirer that would be required under this Form, as applicable, if the reverse takeover acquirer were the issuer of the securities to be distributed, and such other information about the reverse takeover acquirer as is necessary to provide full, true and plain disclosure of all material facts relating to the securities to be distributed, including the disclosure required by Items 4, 5,7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 23, 24, 25, 27, 28, and 32.

ITEM 36A: Marketing Materials

Marketing materials

36A.1(1)              If marketing materials were provided under subsection 13.7(1) or 13.8(1) of the Instrument, the issuer must

    1. include a section, under the heading “Marketing Materials”, proximate to the beginning of the prospectus that contains the disclosure required by this Item,
    2. subject to subsection (2), include the template version of the marketing materials filed under the Instrument in the final prospectus, or incorporate by reference the template version of the marketing materials filed under the Instrument into the final prospectus, and
    3. indicate that the template version of the marketing materials is not part of the final prospectus to the extent that the contents of the template version of the marketing materials have been modified or superseded by a statement contained in the final prospectus.

(2)          An issuer may comply with paragraph (1)(b) by including the template version of the marketing materials filed under the Instrument in the section of the prospectus under the heading “Marketing Materials” or in an appendix to the prospectus that is referred to in that section.

(3)          If the prospectus or any amendment modifies a statement of material fact that appeared in marketing materials provided earlier,

    1. provide details of how the statement in the marketing materials has been modified, and
    2. disclose that, pursuant to subsection 13.7(7) or 13.8(7) of the Instrument,
      1. the issuer has prepared a revised template version of the marketing materials which has been blacklined to show the modified statement, and
      2. the revised template version of the marketing materials can be viewed under the issuer’s profile on www.sedar.com.

(4)          State that any template version of the marketing materials filed under the Instrument after the date of the final prospectus and before the termination of the distribution is deemed to be incorporated into the final prospectus.

(5)          If the issuer relies on the exception in subsection 13.12(1) of the Instrument, include the following statement, or words to the same effect:

“Before the filing of the final prospectus, the issuer and underwriters held road shows on [insert dates and brief description of road shows for U.S. cross-border offering eligible for the exception in subsection 13.12(1) of the Instrument or other prospectus rule] to which potential investors in [insert the jurisdictions of Canada where the prospectus was filed] were able to attend. The issuer and the underwriters provided marketing materials to those potential investors in connection with those road shows.

In doing so, the issuer and the underwriters relied on a provision in applicable securities legislation that allows issuers in certain U.S. cross-border offerings to not have to file marketing materials relating to those road shows on SEDAR or include or incorporate those marketing materials in the final prospectus. The issuer and the underwriters can only do that if they give a contractual right to investors in the event the marketing materials contain a misrepresentation.

Pursuant to that provision, the issuer and the underwriters signing the certificate contained in this prospectus have agreed that in the event the marketing materials relating to those road shows contain a misrepresentation (as defined in securities legislation in [insert the jurisdictions of Canada where the prospectus was filed]), a purchaser resident in [insert the jurisdictions of Canada where the prospectus was filed] who was provided with those marketing materials in connection with the road shows and who purchases the securities offered by this prospectus during the period of distribution shall have, without regard to whether the purchaser relied on the misrepresentation, rights against the issuer and each underwriter with respect to the misrepresentation which are equivalent to the rights under the securities legislation of the jurisdiction in Canada where the purchaser is resident, subject to the defences, limitations and other terms of that legislation, as if the misrepresentation was contained in this prospectus.

However, this contractual right does not apply to the extent that the contents of the marketing materials relating to the road shows have been modified or superseded by a statement in this prospectus. In particular, [insert a description of how any statement in the marketing materials has been modified or superseded by a statement in the prospectus].”

GUIDANCE

Marketing materials do not, as a matter of law, amend a preliminary prospectus, a final prospectus or any amendment.

ITEM 37: Certificates

Certificates

37.1       Include the certificates required by Part 5 of the Instrument or by securities legislation.

Issuer certificate form

37.2       An issuer certificate form must state:

"This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified]."

Underwriter certificate form

37.3       An underwriter certificate form must state:

"To the best of our knowledge, information and belief, this prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of [insert the jurisdictions in which qualified]."

Amendments

37.4 (1)  For an amendment to a prospectus that does not restate the prospectus, change "prospectus" to "prospectus dated [insert date] as amended by this amendment" wherever it appears in the statements in sections 37.2 and 37.3.

(2)          For an amended and restated prospectus, change "prospectus" to "amended and restated prospectus" wherever it appears in the statements in sections 37.2 and 37.3.

Non-offering prospectuses

37.5       For a non-offering prospectus, change "securities offered by this prospectus" to "securities previously issued by the issuer" wherever it appears in the statements in sections 37.2 and 37.3.

Marketing materials

37.6       If an issuer filed a template version of marketing materials under paragraph 13.7(1)(e) of the Instrument or intends to file a template version of marketing materials under paragraph 13.8(1)(e) of the Instrument, change “prospectus” to “prospectus (which includes the marketing materials included or incorporated by reference)” where it first appears in the statements in sections 37.2 and 37.3.

 

ITEM 38: Transition

Interim financial report

38.1 (1)  Despite subsection 32.3(1), an issuer may include a comparative interim financial report of the issuer for the most recent interim period, if any, ended

    1. subsequent to the most recent financial year in respect of which annual financial statements of the issuer are included in the prospectus, and
    2. more than
      1. 75 days before the date of the prospectus, or
      2. 90 days before the date of the prospectus if the issuer is a venture issuer.

(2)          Subsection (1) does not apply unless

    1. the comparative interim financial report is the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011,
    2. the issuer
      1. is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
      2. did not previously file financial statements that disclosed compliance with IFRS,
    3. the issuer is a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and
    4. the final long form prospectus is filed before July 5, 2012.

Asset-backed securities

38.2 (1)  Despite subsection 10.3(5), all financial disclosure that describes the underlying pool of financial assets of the issuer for a transition year must be included in the prospectus for the most recent interim period, if any, ended

    1. subsequent to the most recent financial year referred to in paragraphs 10.3(3)(a) and 10.3(3)(b) in respect of which financial disclosure on the underlying pool of financial assets is included in the prospectus, and
    2. more than
      1. 75 days before the date of the prospectus, or
      2. 90 days before the date of the prospectus if the issuer is a venture issuer.

(2)          Subsection (1) does not apply unless

    1. the financial disclosure in respect of the interim period is the first interim financial report required to be filed in the year of adopting IFRS in respect of an interim period beginning on or after January 1, 2011,
    2. the issuer
      1. is disclosing, for the first time, a statement of compliance with International Accounting Standard 34 Interim Financial Reporting, and
      2. did not previously file financial statements that disclosed compliance with IFRS,
    3. the issuer is a reporting issuer in any jurisdiction immediately before the date of the final long form prospectus, and
    4. the final long form prospectus is filed before July 5, 2012.