Radius Financial (“Radius” or the “Corporation”), wishes to ensure it establishes proper practices with respect to the disclosure of any material information. The mandate of the Audit Committee on an ongoing basis is to review the Disclosure Policy which has been adopted by the Corporation, and recommend such amendments as may be appropriate to the Board of Directors (the “Board”) for approval.
Purpose of the Policy
The governing philosophy for this Disclosure Policy on timely disclosure is to provide the public with equal access to information that may affect their investment decisions, thereby placing all participants in the market on an equal footing. The Corporation is committed to providing timely, accurate and balanced disclosure of material information about the Corporation, consistent with legal and regulatory requirements.
The Corporation will disseminate good news and bad on a timely basis, except where confidentiality issues require a delay. It is imperative that all parties in the investment community have timely access to this information.
This Disclosure Policy extends to all employees and officers of the Corporation and its board of directors. This Disclosure Policy sets out the Corporation’s disclosure obligations and the procedures that the Corporation, its Board, officers and its employees must follow to ensure that material information (as defined below) is disclosed to the public on a timely basis and is not disclosed in circumstances that are contrary to law.
Scope of the Policy
This Disclosure Policy is intended to cover, without limitation:
- all filings with securities regulators;
- any written statements made by the Corporation in annual and quarterly reports, news releases and communications to the shareholders;
- any presentations made by senior management;
- any information disseminated on the Corporation’s website; and
- all statements and communications with analysts and investors.
Material information is any information relating to the business and affairs of the Corporation that has a significant effect, or would reasonably be expected to have a significant effect, on the market price or value of the Corporation’s listed securities. A rule of thumb that you may wish to use to determine if information is material is to consider as material any information which a reasonable investor would likely consider important in making an investment decision.
The following are examples of situations when disclosure must be made:
- changes in share ownership that may affect control of the Corporation;
- changes in corporate structure, such as reorganizations, amalgamations, etc.;
- take-over bids or issuer bids;
- major corporate acquisitions or dispositions;
- changes in capital structure;
- borrowing of a significant amount of funds;
- public or private sale of additional securities;
- development of new products and major developments affecting the Corporation’s technology, products or market;
- entering into or loss of significant contracts;
- firm evidence of significant increases or decreases in near-term earnings prospects;
- changes in capital investment plans or corporate objectives;
- significant changes in management;
- significant litigation;
- major labour disputes or disputes with major contractors or supplies;
- events of default under financing or other agreements; and
- any other developments relating to the business and affairs of the Corporation that would reasonably be expected to significantly affect the market price or value of any of the Corporation’s securities or that would reasonably be expected to have a significant influence on a reasonable investor’s investment decisions.
Forecasts of earnings and other financial forecasts need not be disclosed. In addition, forecasts should not be provided on a selective basis to any investors if the investors are not involved in the management of the affairs of the Corporation.
The Corporation must disclose material information concerning its business and affairs forthwith upon the information becoming known to management. In the case of information previously known but not disclosed, it must be disclosed forthwith upon it becoming apparent that the information is material.
A significant announcement is to be released immediately. Release of certain announcements may be delayed until the close of trading subject to the approval of the Market Surveillance Division, if applicable.
Exception to Disclosure Requirement
In restricted circumstances, the Disclosure Rules allow information to be kept confidential for a limited period of time if the early disclosure of material information would be unduly detrimental to the Corporation.
If disclosure of material information is delayed, complete confidentiality must be maintained. That is, the material information should not be disclosed to anybody, except in the necessary course of business, and precautions should be taken to assure that there is no selective disclosure to third parties. This is tipping which is prohibited under securities laws. In the event that such confidential information, or rumours respecting the same, are divulged in any manner (other than in the necessary course of business), the Corporation would be required to make an immediate announcement on the matter.
Accordingly, to maintain confidentiality, the Corporation will:
- not disclose the information to anyone (including others within the Corporation) except in the necessary course of business;
- make sure that if the information has been disclosed in the necessary course of business that everyone understands that it is to be kept confidential;
- if necessary, share in a locked cabinet any confidential documents and refer to confidential information using code names;
- ensure that confidential documents cannot be accessed through shared servers; and
- make sure that there is no selective disclosure of confidential information to third parties, e.g. during the course of a meeting with an analyst. This would be considered tipping, prohibited under securities law.
If selective disclosure of confidential information inadvertently occurs, the Corporation must immediately disclose the information publicly by issuing a press release.
The Corporation will advise all employees that they should not discuss confidential information with other employees in areas where they may be overheard, e.g. in elevators, bars and at parties.
The Corporation will decline discussions with the investor community relating to financial performance during the seven day period which precedes the release of quarterly information or annual financial information. During such seven day period, the Corporation may, however, respond to strictly factual questions concerning publicly available and/or non-material information unrelated to financial performance.
Rumours, Leaks and Inadvertent Disclosures
Unusual market activity is often caused by the presence of rumours. While management may not be aware of, or be in a position to comment on, all rumours, any applicable stock exchange may request that the Corporation make a clarifying statement. A trading halt may be instituted pending a “no corporate developments” statement from the Corporation. If a rumour is correct in whole or in part, the Corporation must make immediate disclosure of the relevant material information and a trading halt will be instituted pending release and dissemination of the information.
Any unauthorized disclosure of information must be reported immediately to the corporate disclosure manager. If the information is price sensitive, the Corporation will issue a press release. If the information is not material, the Corporation will give investors access to the background information related to the rumour, leak or inadvertent disclosure on the Corporation’s website.
Communications to the investment community, investors, regulators and the media will only be made by such person or persons as are authorized by the Corporation. Only the Chairman of the Board, Chief Executive Officer and the Chief Financial Officer (collectively, the “Authorized Spokespersons”) are currently authorized to issue communications on behalf of the Corporation. No other person, unless specifically authorized and directed in writing by either of the two Authorized Spokespersons shall respond to any inquiries from the investment community, investors, the media or others. In the event an unauthorized person receives such an inquiry, such inquiry should immediately be referred to either of the Authorized Spokespersons.
Procedure for Disclosure
Material information will be primarily disclosed by a news release. Any news release concerning material information and/or involving disclosure of financial information, must be approved in advance by one of the Authorized Spokespersons. All news releases will be distributed using an approved wire service providing national and/or international distribution. News releases will also be transmitted to stock exchanges, relevant regulatory bodies, financial media and business wires during non-trading hours. All news releases will be posted on the Corporation’s website as soon as possible after release over the news wire. All such releases on the website will contain a notice that the information was accurate at the time of posting but may be changed by subsequently disclosed information.
All periodic or other filings required to be made by any applicable regulatory authority or stock exchange shall be prepared by the authorized spokespersons with the assistance of the Corporation’s outside counsel. A copy of any regulatory filing will be posted to the Corporation’s website.
Disclosure of any non-public material information on the Corporation’s website does not constitute adequate public disclosure of such information. Any material information which has not previously been disclosed in accordance with the provisions of this Policy shall not be posted on the Corporation’s website. A separate section will be created on the website with respect to investor relations material. Such section shall contain a notice advising that the information posted was accurate at the time of posting but may change as a result of subsequent disclosures. The most current version of the Corporation’s risk factors, as disclosed in the Corporation’s public disclosure records, will be incorporated by reference on the website. The Corporation’s forward-looking statement disclaimer shall be posted clearly and prominently on the website. In no event shall the Corporation’s website post or hyperlink to any analyst reports or similar third party information regarding the Corporation.