Marijuana Business Magazine July 2019

July 2019 | mjbizdaily.com 69 5-20 Weeks 1-5 Weeks Finalize management and board of directors. Develop draft prospectus and related disclosure documents. File preliminary prospectus. Commence comment period. Launch marketing and IPO roadshow. Prepare information circular and related disclosure documents. Conduct shareholder meeting to gain approval. Select management and board of directors for resulting issuer. File information circular with CSE. Finalize pricing and allocation. Finalize and deliver final prospectus. Receive decision document. Commence trading upon admission to stock exchange. Obtain conditional listing approval from CSE. Conduct private placement—funds held in escrow. File post-shareholder approval documents with CSE. Close RTO—funds released from escrow. CSE issues final exchange bulletin. Trading commences on CSE for common shares of resulting issuer. Begin operating as a public entity business entity incorporated in at least one Canadian province. With FPI status in hand, the IPO- minded company can focus on drafting the preliminary prospectus, which has all the disclosures that appear in the final prospectus, except for pricing details, number of shares and other material facts that change or are requested by regulators during the review process. Drafting the preliminary prospectus involves numerous company executives and other experts. C-suite executives craft the business description and source key financial and nonfinancial data such as revenue, profits, debts and assets. Auditors prepare necessary historical financial statements and disclosures. Underwriters determine details about the securities offered, including price, how many shares should be offered and what types of shares, such as common or preferred. Your underwriter’s lawyers also will perform due diligence and examine company financial and business infor- mation, interview senior executives, inspect operating facilities and assets as well as review contracts and agreements. Business leaders must be able to answer questions about the company’s opera- tional performance, revenue and sales, industry trends, competition, customer relationships, accounting policies, inter- nal controls and other issues. After completing the preliminary prospectus and filing it for regulators to review, the underwriters conduct a “road show” that markets the securi- ties to institutional investors and other investment groups. Once the preliminary prospectus is filed, provincial securities regulators review and comment on the disclosures and will probably require the issuer to make changes or additions. For example, a regulator could ask for more infor- mation or clarifications about risks that are listed, audits, financial numbers, acquisitions or equipment purchases the company has made. Finalizing a prospectus involves working with your lead underwriter to valuate your company and establish a price for the securities you plan to offer. To valuate a company, underwriters con- sider growth and earnings projections, price-earnings ratio, cash flow, balance sheets and other factors. After accepting the final prospectus, provincial regulators will issue a receipt that, when received, will allow under- writers to start selling the securities. Once the listing is granted, listing conditions must be fulfilled and the securities must be posted for trading within 90 days. Source: MGO | ELLO National Cannabis Alliance