By Raymond Andrews,2014-12-19 03:53
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    FORM 3A



    (1) The objective of the prospectus is to provide information concerning the Capital Pool Company (“CPC”)

    that an investor needs in order to make an informed investment. This Form sets out specific disclosure

    requirements that are in addition to the general requirements under securities legislation to provide full, true

    and plain disclosure of all material facts relating to the securities to be distributed. This Form must be read

    in conjunction with the policies of the TSX Venture Exchange Inc. (the “Exchange”), including Policy 2.4 –

    Capital Pool Companies (the “CPC Policy”), and applicable securities legislation including, for example,

    filing procedures and financial statement requirements. Certain rules of specific application may impose

    prospectus disclosure obligations in addition to those described in this Form.

    (2) Issuers are reminded that the Exchange requires all issuers filing a CPC Prospectus to comply with the

    General Prospectus Rules. Issuers are reminded that this Form is not a form prescribed under securities

    legislation it is intended to provide guidance to a CPC in respect of compliance with the applicable

    prospectus form under the General Prospectus Rules.

    (3) Terms used and not defined in this Form that are defined or interpreted in either (i) the CPC Policy, or (ii)

    National Instrument 14-101 Definitions, shall bear that definition or interpretation. References in this form

    to the "CPC" or the “Corporation” can be revised to reflect the name of the CPC.

    (4) In determining the degree of detail required, a standard of materiality should be applied. Materiality is a

    matter of judgment in each particular circumstance, and should generally be 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 CPC’s securities. In determining whether information

    is material, take into account both quantitative and qualitative factors. The potential significance of items

    should be considered individually rather than on a net basis, if the items have an offsetting effect. This

    concept of materiality is consistent with the financial reporting notion of materiality contained in the


    (5) 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.


    (as at June 14, 2010)

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

    answers to items may be omitted.

    (7) The disclosure must be understandable to readers and presented in an easy to read format. The presentation

    of information should comply with plain language principles. If technical terms are required, clear and

    concise explanations should be included.

    (8) Provide any appropriate cross-reference(s) to various sections in the prospectus, where further detail may be


    (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 the term "class" is used in any item to describe securities, the term includes a series of a class. PROSPECTUS FORM

    Item 1: Cover Page Disclosure

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

    "This prospectus constitutes a public offering of the securities only in those jurisdictions

    where they may be lawfully offered for sale and, in such jurisdictions, only by persons

    permitted to sell such securities. No securities regulatory authority has expressed an

    opinion about these securities and it is an offence to claim otherwise."

    1.2 Preliminary Prospectus Disclosure - Every preliminary prospectus shall have printed in red ink and in

    italics at the top of the cover page immediately above the disclosure required under Item 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 the provinces of [state applicable provinces] and with the TSX

    Venture Exchange Inc.(the “Exchange”) 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)]."


    (1) The CPC is required to complete the bracketed information by inserting the names of each jurisdiction in

    which the CPC intends to offer securities under the prospectus.


    (as at June 14, 2010)

    1.3 Basic Disclosure about the Distribution - State the following immediately below the disclosure required

    under Items 1.1 and 1.2 with the bracketed information completed:



    [Name of CPC]

    (a capital pool company)

    $ [aggregate dollar amount]

    [aggregate number of] common shares

    Price: $ [amount per common share]

    The purpose of this offering (the “Offering”) is to provide the Corporation with a

    minimum of funds with which to identify and evaluate businesses or assets with a view to

    completing a Qualifying Transaction, as hereafter defined. Any proposed Qualifying

    Transaction must be approved by the Exchange and in the case of a Non Arm’s Length

    Qualifying Transaction, must also receive Majority of the Minority Approval, as

    hereafter defined, in accordance with Exchange Policy 2.4 (“CPC Policy”). The

    Corporation is a Capital Pool Company (“CPC”). It has not commenced commercial

    operations and has no assets other than a minimum amount of cash. Except as

    specifically contemplated in the CPC Policy, until the Completion of the Qualifying

    Transaction, the Corporation will not carry on any business other than the identification

    and evaluation of assets or businesses with a view to completing a proposed Qualifying



    (1) The CPC is only permitted to offer common shares, as defined in the CPC Policy. (2) If there is a minimum and maximum number of common shares being offered, revise the disclosure to

    provide for the number of common shares and the dollar amounts offered for both the minimum and

    maximum subscriptions.

    (3) If the prospectus is also intended to qualify the grant of incentive stock options or all or part of an agent’s

    option, revise the disclosure to provide for the number of common shares subject to the options, the

    exercise price of the options and appropriate cross-reference(s) in the prospectus to further information

    about the options.

    1.4 Distribution

    (1) Provide the information called for below, in substantially the following tabular form or in a note to

    the table:

     Agent’s Proceeds to the

    Price to public commission Corporation

    (a) (b) (c)

    Per Common Share

    Total Offering

    (2) Disclose:

    (a) the name of each agent;


    (as at June 14, 2010)

    (b) if applicable, the cover page disclosure in order to comply with the requirements of

    National Instrument 33-105 Underwriting Conflicts;

    (c) that the offering is made on a best efforts basis and provide the total for both the

    minimum and maximum subscriptions, if applicable;

    (d) the latest date that the distribution is to remain open as may be permitted by securities

    legislation; and

    (e) how the offering price was determined.

    Disclosure in substantially the following form is recommended:

    “This offering is made on a best efforts basis by [name of agent(s)] (the “Agent”) and is subject to

    a minimum subscription of [number] Common Shares for total gross proceeds to the Corporation

    of $[amount]. The offering price of the Common Shares was determined [arbitrarily by the

    directors of the Corporation/by negotiation between the Corporation and the Agent]. All funds

    received from subscriptions for Common Shares will be held by [a trust company, registrant or

    chartered bank] pursuant to the terms of the [Agency Agreement]. If the [minimum] subscription

    is not raised within 90 days of the issuance of a receipt for the final prospectus or such other time

    as may be consented to by persons or companies who subscribed within that period, all

    subscription monies will be returned to subscribers without interest or deduction, unless the

    subscribers have otherwise instructed the [trust company, registrant or chartered bank].”

    (3) In column (b) of the table, disclose only commissions paid or payable in cash by the CPC,

    including any corporate finance fees. Set out in a note to the table any consideration other than

    cash paid or payable by the CPC, including agent’s options. If the agent has been granted an

    agent’s option, state:

    (a) whether the prospectus qualifies the grant of all or part of the agent’s option or any other


    (b) the time frame within which the option must be exercised (to a maximum of 24 months)

    and any restriction on the trading in the shares which may be acquired on exercise of the

    option, and

    (c) provide a cross-reference to the applicable section in the prospectus where further

    information about the agent’s option or any other option is provided.

    (4) Include as a note to the table whether the proceeds to the CPC disclosed in column (c) are before

    or after deducting the costs of the issue, and what the CPC estimates to be the costs of the issue.


    (1) An agent who is a member firm of the Exchange must be involved in the distribution.

    (2) The cross-reference to the applicable section(s) in the prospectus relating to agent compensation must be made to a specific heading or sub-heading which sets forth all the compensation both in the form of cash and non-cash payable to the agent.

    (3) An application for listing on the Exchange must be made concurrently with filing of the preliminary prospectus.


    (as at June 14, 2010)

1.5 Market For Securities

    (1) If application has been made to list the common shares, include a statement, in substantially the

    following form:

     “The Corporation has applied to list its Common Shares on the Exchange. Listing will be subject

    to the Corporation fulfilling all the listing requirements of the Exchange.”

    (2) If application has been made to list the common shares on the Exchange and conditional listing

    acceptance has been received, include a statement, in substantially the following form, with the

    bracketed information completed:

     "The Exchange has conditionally accepted the listing of the Corporation’s Common

    Shares. Listing is subject to the Corporation fulfilling all of the requirements of the

    Exchange. "

    (3) Disclose restrictions on trading in the CPC’s securities. Include a statement in substantially the

    following form, with bracketed information completed:

     "Other than the initial distribution of the Common Shares pursuant to this prospectus,

    [the grant of the Agent's Option], [the grant of options to the directors, officers and

    technical consultants of the Corporation] and [the grant of options to Eligible Charitable

    Organizations, as hereafter defined], trading in all securities of the Corporation is

    prohibited during the period between the date a receipt for this preliminary prospectus is

    issued by the [securities regulatory authority(ies)] and the time the Common Shares are

    listed for trading except, subject to prior acceptance of the Exchange, where appropriate

    registration and prospectus exemptions are available under securities legislation or where

    the applicable [securities regulatory authority(ies)] grant a discretionary order.”

    1.6 Risk Factors - Include a brief statement as to the risk factors including a cross-reference to sections in the

    prospectus where information about the risks of an investment in the securities being distributed is provided.

    In addition to the other risk factors which may be included in the summary, state the following in bold type:

    "Investment in the Common Shares offered by this Prospectus is highly speculative

    due to the nature of the Corporation’s business and its present stage of development.

    This offering is suitable only to those investors who are prepared to risk the loss of

    their entire investment.”


    (1) Provide a bold face cross reference to the risk factors section in the prospectus.


    (as at June 14, 2010)

1.7 Maximum Investment - Disclose the maximum number of Common Shares which may be acquired

    directly or indirectly by any one purchaser under the prospectus, and the maximum number of Common

    Shares which may be directly or indirectly purchased by any purchaser, together with that purchaser's

    Associates and Affiliates. Include a statement in substantially the following form with bracketed

    information completed:

    "Pursuant to the CPC Policy, no purchaser of the Common Shares is permitted to directly

    or indirectly purchase more than 2% or [state number] of the total Common Shares

    offered under this prospectus. In addition, the maximum number of Common Shares that

    may directly or indirectly be purchased by that purchaser, together with any Associates or

    Affiliates of that purchaser, is 4% or [state number] of the total number of Common

    Shares offered under this prospectus.”


    (1) If there is a minimum and maximum number of common shares being offered, disclose the number

    of shares referred to in brackets based both on the minimum and maximum subscriptions. 1.8 Receipt of Subscriptions - Disclose that subscriptions will be subject to rejection and allotment as well as

    the timing of issuance of share certificates. If applicable, include a statement in substantially the following

    form, with bracketed information completed:

    "Subscriptions will be received subject to rejection or allotment in whole or in part and

    the right is reserved to close the subscription books at any time without notice. It is

    expected that share certificates evidencing the Common Shares in definitive form will be

    available for delivery [on the closing date/within [state number] days of the closing date]. 1.9 International Promoters If a promoter of the CPC is incorporated, continued, or otherwise organized

    under the laws of a foreign jurisdiction or resides outside of Canada, comply with National Instrument 41-

    101- General Prospectus Requirements by stating the following on the cover page or under a separate

    heading elsewhere in the prospectus, with the bracketed information completed:

    “The [promoter] is incorporated, continued or otherwise organized under the laws of a foreign

    jurisdiction or resides outside of Canada. Although [the promoter] has appointed [name(s) and

    address(es) for service] as its agent(s) for service of process in [name of province] it may not be

    possible for investors to collect from the [promoter] judgments obtained in courts in [names of

    provinces] predicated on the civil liability provisions of securities legislation.”

    Item 2: Table of Contents

    2.1 Table of Contents - Include a table of contents.

    Item 3: Glossary

    3.1 Glossary - Include a glossary of terms.


    Where the glossary includes the terms set out in Appendix 1 to this Form, provide the definition for that term, as set forth in Appendix 1.


    (as at June 14, 2010)

    Item 4: Summary of Prospectus

    4.1 Cautionary Language - 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."

    4.2 General - Briefly summarize, near the beginning of the prospectus, information appearing elsewhere in the prospectus that, in the opinion of the CPC, would be most likely to influence the investor's decision to purchase the securities being distributed. At minimum, include a description of the following items:

    (a) Describe the principal business of the CPC by making a statement in substantially the following

    form, with bracketed information completed:

     "The principal business of the Corporation will be the identification and evaluation of

    assets or businesses with a view to completing a Qualifying Transaction. The Corporation

    has not commenced commercial operations and has no assets other than a minimum

    amount of cash.”

    (b) Describe the securities to be distributed, including the offering price and expected net proceeds,

    (including the grant of any options or other rights to acquire securities.) by making a statement in

    substantially the following form, with bracketed information completed:

     "A total of [state number] Common Shares are being offered under this prospectus at a

    price of $[state price] per Common Share. [In addition, the Corporation will grant an

    option to the Agent to purchase up to [state number] Common Shares at a price of $[state

    price] per share which will be exercisable for a period of [24] months from the date of

    listing of the Common Shares on the Exchange][which option is qualified under this

    prospectus]. [The Corporation also intends to grant options to purchase [state number]

    Common Shares to directors, officers, and technical consultants, as well as options to

    purchase [state number] Common Shares to Eligible Charitable Organizations] [All/state

    number] of [which options are qualified for distribution under this prospectus]." (c) Describe the expected use of proceeds by making a statement in substantially the following form:

     "The net proceeds to the Corporation will be $[insert amount]. The net proceeds of this

    Offering will be used to provide the Corporation with a minimum of funds with which to

    identify and evaluate assets or businesses, for acquisition with a view to completing a

    Qualifying Transaction. The Corporation may not have sufficient funds to secure such

    businesses or assets once identified and evaluated and additional funds may be required.

    Until Completion of the Qualifying Transaction and except as otherwise provided in the

    CPC Policy, a maximum of the lesser of 30% of the gross proceeds realized or $210,000

    may be used for purposes other than evaluating business or assets.”

    (d) List the name of each director and officer of the CPC and indicate their respective positions and

    offices held with the CPC.

    (e) Provide details of the escrowed securities of the CPC as well as the terms on which the securities

    will be released from escrow by making a statement in substantially the following form, with

    bracketed information completed:


    (as at June 14, 2010)

     “[All] of the currently issued and outstanding Common Shares of the Corporation, being

    [state number] Common Shares [have been/will be] deposited in escrow pursuant to the

    terms of an Escrow Agreement, as hereafter defined, and will be released from escrow in

    stages over a period of up to three years after the date of the Final Exchange Bulletin.”

    (f) Describe the risk factors. The following are suggested as risk factors but should not be considered

    an all-inclusive list:

    “Investment in the Common Shares must be regarded as highly speculative due to the proposed

    nature of the Corporation’s business and its present stage of development. The Corporation was

    only recently incorporated and has no active business or assets other than cash. It does not have a

    history of earnings, nor has it paid any dividends and will not generate earnings or pay dividends

    until at least after the Completion of the Qualifying Transaction. The Offering is only suitable to

    investors who are prepared to rely entirely on the directors and management of the Corporation

    and can afford to risk the loss of their entire investment. [The directors and officers of the

    Corporation will only devote part of their time and attention to the affairs of the Corporation] and

    there are potential conflicts of interest to which some of the directors and officers of the

    Corporation will be subject in connection with the operations of the Corporation. Assuming

    completion of the Offering, an investor will suffer an immediate dilution on investment of [state

    number]% or $[insert amount] per Common Share. There can be no assurance that an active and

    liquid market for the Corporation’s Common Shares will develop and an investor may find it

    difficult to resell the Common Shares. Until Completion of the Qualifying Transaction, the

    Corporation will not carry on any business other than the identification and evaluation of assets or

    businesses with a view to completing a Qualifying Transactions. The Corporation has only

    limited funds with which to identify and evaluate possible Qualifying Transactions and there can

    be no assurance that the CPC will be able to identify or complete a suitable Qualifying


    The Qualifying Transaction may involve the acquisition of a business or assets located outside of

    Canada. It may therefore be difficult or impossible to effect service or notice to commence legal

    proceedings upon any directors, officers and experts outside of Canada and it may not be possible

    to enforce against such persons or companies judgments obtained in Canadian courts predicated

    upon the civil liability provisions applicable to securities laws in Canada. ”


    (1) Provide appropriate cross references to additional information respecting these items in the prospectus. (2) The CPC should consider each of the foregoing risk factors and any additional risk factors that may be

    appropriate and ensure that disclosure is appropriately tailored to its circumstances. (3) Revise the foregoing as appropriate if the CPC has had specific discussions respecting the identification of

    a potential Qualifying Transaction and include an appropriate cross-reference to the section in the

    prospectus where the discussion as to the potential Qualifying Transaction is discussed in detail. Item 5: Corporate Structure

    5.1 Name and Incorporation

    (1) State the full corporate name of the CPC and the address(es) of the CPC’s head and registered


    (2) State the statute under which the CPC is incorporated or continued. If material, state whether the

    articles or other constating or establishing documents of the CPC have been amended and describe

    the substance of the material amendments.


    (as at June 14, 2010)

Item 6: Business of the CPC

    6.1 Preliminary Expenses Disclose:

    (a) the preliminary expenses that the CPC has incurred to date in proceeding with the

    offering and state that certain of the offering proceeds may be utilized to satisfy the

    obligations of the CPC related to this offering, including the expenses of its auditors,

    legal counsel and the agent’s legal counsel; and

    (b) in summary form, the CPC’s expenditures since the date of the most recent balance sheet

    included in the prospectus.


    (1) Include a cross-reference to Use of Proceeds.

    6.2 Proposed Operations until Completion of a Qualifying Transaction

    (1) Discuss the proposed operations of the CPC to be conducted until Completion of a Qualifying

    Transaction, having regard to the restrictions set forth in the CPC Policy and in this regard state:

    (a) the nature of the business and operations proposed to be carried on by the CPC; and

    (b) if applicable, the nature of discussions in respect of a particular industry or potential


    Disclosure in substantially the following form is recommended:

    "The Corporation proposes to identify and evaluate businesses and assets with a view to

    completing a Qualifying Transaction. Any proposed Qualifying Transaction must be

    accepted by the Exchange and in the case of a Non Arm’s Length Qualifying Transaction

    is also subject to Majority of the Minority Approval in accordance with the CPC Policy.

    The Corporation has not conducted commercial operations [other than to enter into

    discussions for the purpose of identifying potential acquisitions or interests]. [If

    applicable: To date, these discussions have focused on [describe or, alternatively, make a

    cross-reference to “Potential Qualifying Transaction”.] The Corporation currently intends

    to pursue a Qualifying Transaction in the [state industry sector as oil and gas, mining,

    research and development, technology etc] but there is no assurance that this will, in fact,

    be the business sector of a proposed Qualifying Transaction or of the Corporation

    following Completion of the Qualifying Transaction.”

    (2) State:

    (a) the restrictions on the business to be carried on by the CPC until Completion of the

    Qualifying Transaction as prescribed by the CPC Policy; and

    (b) the maximum amount of refundable and non-refundable loans or deposits that may be

    advanced to a target issuer, as permitted by the CPC Policy.

    Disclosure in substantially the following form is recommended:


    (as at June 14, 2010)

    "Until Completion of a Qualifying Transaction, the Corporation will not carry on any

    business other than the identification and evaluation of businesses or assets with a view to

    completing a potential Qualifying Transaction. With the consent of the Exchange, this

    may include the raising of additional funds in order to finance an acquisition. Except as

    described under [“Private Placement for Cash”, and “Restrictions on Use of Proceeds”],

    the funds raised pursuant to this Offering and any subsequent financing will be utilized

    only for the identification and evaluation of potential Qualifying Transactions and not for

    any deposit, loan or direct investment in a potential acquisition.

    [Although the Corporation has commenced the process of identifying potential

    acquisitions with a view to completing the Qualifying Transaction,] the Corporation has

    not yet entered into an Agreement in Principle.”

    6.3 Geographical Restrictions - deleted


    (1) In the event that management has placed geographical or other restrictions on the business of the CPC in

    addition to those set forth in the CPC Policy, state those restrictions and modify the above disclosure

    accordingly to refer specifically to the known geographic or foreign elements and any risks associated with

    such geographic or foreign elements.

    6.4 Method of Financing Provide disclosure that there may be a requirement for the CPC to undertake

    additional financings in order to effect a Qualifying Transaction and include bold print disclosure

    respecting the possibility of a further dilution to the investor. Include a statement in substantially the

    following form with bracketed information completed.

    “The Corporation may use [either] [cash/bank financing/issuance of treasury shares or

    public financing of debt or equity, or a combination of these,] [clarify the foregoing, as

    required] for the purpose of financing its proposed Qualifying Transaction. A

    Qualifying Transaction financed by the issue of treasury shares could result in a

    change in the control of the Corporation and may cause the shareholders' interest in

    the Corporation to be further diluted."

    6.5 Criteria for a Qualifying Transaction: Describe management's criteria for reviewing prospects for a

    proposed Qualifying Transaction, including the criteria that will be used by management in assessing

    whether to approve the terms of a proposed Qualifying Transaction. State all relevant considerations

    intended to be used by management. The following disclosure is suggested, which should be revised to

    include any other relevant considerations:

    “The board of directors of the Corporation must approve any proposed Qualifying

    Transaction. In exercising their powers and discharging their duties in relation to a

    proposed Qualifying Transaction, the directors will act honestly and in good faith with a

    view to the best interests of the Corporation and will exercise the care, diligence and skill

    that a reasonably prudent person would exercise in comparable circumstances.”


    (as at June 14, 2010)

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