CSA Issues Prospectus Disclosure Guidance For Issuers With Short-Term Liquidity Concerns Or Raising Insufficient Proceeds

CSA issues prospectus disclosure guidance for issuers with short-term liquidity concerns or raising insufficient proceeds.

On March 2, 2012, the Canadian Securities Administrators (CSA) issued a notice setting out the CSA's approach regarding disclosure of the financial condition of an issuer and the sufficiency of proceeds in the context of a prospectus offering.

The notice is intended for issuers that have filed a prospectus and either (i) it appears that the prospectus inadequately discloses the issuer's financial condition and going concern risk or (ii) there is adequate disclosure about the issuer's financial condition, but it appears that the proceeds from the proposed offering may be insufficient to accomplish the stated purpose of the offering. In these circumstances, a receipt for a prospectus may not be issued.