Notice 2021-001 - Guidance – Financial Statement Requirements for Listing

March 10, 2021

The Canadian Securities Exchange (CSE, or Exchange) is issuing this notice to provide guidance and clarify the application of the financial statement requirements outlined in the Form 2A Listing Statement (“FS Requirements”).  The guidance reflects the intent and application of the current FS Requirements and specifically applies to reporting issuers, whether listed or unlisted, that are completing or have completed an RTO transaction or Fundamental Change as defined in Policy 8 Fundamental Changes and Changes of Business.

The CSE Form 2A Listing Statement (the “Form”) is intended to provide full, true and plain disclosure about an issuer at the time of listing.  While it is not a prospectus, the Form is derived from the Form 41-101F1 Information Required in a Prospectus, as is the standard of full, true and plain disclosure.

The FS Requirements

Section 25 describes the financial statements to be included with the Listing Statement, with 25.1 identifying the statements for an issuer, and 25.2 stipulated those required for a target in the event of an RTO:

25         Financial Statements

25.1      Provide the following audited financial statement for the Issuer:

(a) copies of all financial statements including the auditor's reports required to be prepared and filed under applicable securities legislation for the preceding three years as if the Issuer were subject to such law; and

(b) a copy of financial statements for any completed interim period of the current fiscal year.

25.2      For Issuers re-qualifying for listing following a fundamental change provide

(a)   the information required in sections 5.1 to 5.3 for the target;

(b)   financial statement for the target prepared in accordance with the requirements of National Instrument 41-101 General Prospectus Requirements as if the target were the Issuer;

(c)   pro-forma consolidated financial statements for the New Issuer giving effect to the transaction for:

(i)      the last full fiscal year of the Issuer, and

(ii)    any completed interim period of the current fiscal year.

Effective immediately,  25.1(a) and 25.2 (b) should be interpreted to reflect the requirements of Form 41-101F1 and 25.2(b) should be read “…as if the target were an issuer;” rather than “the Issuer”.  While an issuer filing a Form will already in most cases be a venture issuer as defined in National Instrument 51-102 Continuous Disclosure Obligations, a target that is not yet a reporting issuer is NOT a venture issuer, and therefore the FS Requirements under section 25 are to provide the interim and annual financial statements required under item 32 of Form 41-101F1.

CSE will be proposing amendments to the Form and its application in the context of initial and continued listing procedures. Those amendments will be published and, if approved, effective at a later date.  The guidance in this notice is effective immediately for all listing applicants including those already received by the Exchange.

For questions about CSE Listings Policies or procedures, please contact:

Listings@thecse.com, or 416-367-7340.

Mark Faulkner, Vice President Listings & Regulation

Mark.Faulkner@thecse.com