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Researching Public Companies

Public companies are required to disclose and report to the public according to rules laid out by regulators.

When researching a public company, it’s important to know where this information resides and how you can access it to make more informed investment decisions. Always talk to your registered advisor to ensure that any investment is suitable to help you reach your financial goals.

SEDAR+ is Canada's central electronic filing system for public company and mutual fund disclosure documents. This is a repository where companies file all information required by Canadian securities regulators and you can search it, at no cost, as part of your due diligence.

The prospectus, financial statements, management discussion and analysis, news releases, and other kinds of reports provide detailed information that can help you make your investment decision.

Reading these documents will better equip you to assess your investment advisor's recommendation when you are thinking about investing in a public company.

Two Ways to Search on SEDAR+

1. If you are looking for a specific document that a company or mutual fund has filed, follow these steps:

  • From the home page, select Search Database.
  • Choose either Public Company Documents or Investment Fund Documents.
  • Select the document from the drop down list under document type. You can limit to a company or an industry group and can limit the filing period.
  • Click on the specific document you are interested in reviewing.

2. If you are looking for all documents that a company has filed, follow these steps:

  • From the home page, select Issuer Profiles.
  • Go to the alphabetical list for either Companies or Investment Fund Groups to retrieve a list of all companies/funds starting with a particular letter.
  • Select the company or fund you want to research.
  • Click on the link to View This Company's or Investment Fund's Documents.

Financial statements communicate information that is useful to you. In Canada, public companies must issue annual financial statements every year and interim financial reports, also known as quarterly reports, for each three-, six-, and nine-month period during its financial year. Once a year, a company must arrange for an auditor to audit its annual financial statements. The company’s board of directors must approve the financial statements.

Why it is Important to Review Financial Statements

Whenever a company issues annual financial statements or interim financial reports, it must also produce management’s discussion and analysis (MD&A), which provides an opportunity for management to discuss how it performed during the period covered by the financial statements or reports, along with its financial condition and future prospects. MD&A may also provide disclosure on additional areas, such as transactions with related parties and legal proceedings.

Note: Venture issuers have the option of providing a short discussion of quarterly highlights rather than the regular form of interim MD&A.

If you own shares in a company, it must send you any financial statements you request and may send you financial statements as part of their annual report, unless you choose not to receive these materials. You can also find the company’s financial statements on SEDAR+ and usually on the company’s own website.

What You Should Focus On

Below is a brief explanation of each statement and associated documents, along with suggestions for what to focus on as you review them.

Statement of Comprehensive Income or Income Statement or Statement of Operations

This sets out revenue and expenses for the period under review and the year-to-date. Focus on the significant components of net income/profit (or net loss) or net income/profit (or loss) attributable to common shares and compare this to the information for the prior period(s).

Statement of Cash Flows or Cash Flow Statement

Presents cash received and spent for the period and year-to-date for operating, financing, and investing activities.

  • For operating activities, see if the company is bringing in more cash from operations than it is spending.
  • For financing activities, see if the company raised money in this period by selling additional shares or borrowing money.
  • For investing activities, see if the company spent money on new equipment or other long-lived assets (like property).

Statement of Financial Position or Balance Sheet

This presents what the company owns and owes on the last day of the period. The difference between the company’s total assets (what it owns) and its total liabilities (what it owes) is called equity or shareholders' equity. Consider changes in the amounts for significant assets and liabilities. Also, consider whether the company will be able to settle its liabilities.

Statement of Changes in Equity

This shows the increase or decrease in the company’s net assets during the period resulting from the net income or loss generated by the company and from the transactions with owners (shareholders) of the company during the period. Any restatements to prior period amounts, whether due to errors or a change in accounting policy, are also reflected in this statement. Focus on whether the company issued shares during the period, and consider how the company used the funds raised. Also, consider if the company historically pays dividends back to shareholders.


These explain or disaggregate items presented in the individual statements. Notes describe certain items for which amounts do not appear in the statements, such as a contingent liability relating to litigation.

Auditor’s Report

This accompanies the annual audited set of statements. The financial statements are the company’s records, not the auditor’s records. Check if the auditor’s report highlights any specific items in the financial statements or if it refers to a restatement. Read any notes to which the report refers.

Non-GAAP Financial Measures

When announcing financial results, or when discussing performance in the MD&A or on their website, many companies present both financial statement measures as well as additional measures we call “non-GAAP” or “non-IFRS” financial measures. These additional measures, which appear outside the financial statements, are not prepared in accordance with any accepted accounting standards. Common examples of non-GAAP financial measures include EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted earnings, or free cash flow.

Because there is no standardized meaning to non-GAAP financial measures, they can be misleading. If a company presents non-GAAP financial measures, accompanying disclosure should:

  • clearly distinguish the non-GAAP measure from financial statement numbers.
  • explain why the non-GAAP measure is useful.
  • explicitly state that there is no standardized meaning.
  • tie the non-GAAP financial measure back to a number presented in the financial statements.

Also consider whether a company presents the same non-GAAP financial measures over time – if they cherry-pick the measure to focus on every year, you may not be getting the full picture of the company’s performance.

During Your Review of the MD&A, Ask These Questions

  • Does management’s explanation for any losses make sense?
  • Does management have a plan to move to profitability over time and does it make sense?

If You Need Help, Consider These Options

  • Ask your advisor to discuss your questions with you.
  • Ask another trusted professional (your accountant, for example) to discuss your questions with you.
  • Call the company and ask for a further explanation.
  • Ask your question(s) at the company’s annual general meeting.

Meeting materials are documents received from the company in advance of a shareholders' meeting. Normally, they consist of a notice of meeting, a proxy or voting instruction form, and an information circular. Most public companies also post their meeting materials on their website. Public companies must also file these materials on SEDAR+.

Some companies now use “notice-and-access” to send materials. In those cases, you will receive a more streamlined package that will tell you how to access materials online, or if you prefer, how to request that materials be mailed to you.

You may receive these materials in the mail or, if you have consented to electronic delivery, by email.

Following the enactment of widespread public health measures due to the COVID-19 pandemic, including restrictions on gatherings, many public companies adopted a virtual meeting format for their shareholders’ meetings. A virtual meeting may be conducted entirely online using a specialized meeting platform, or in a hybrid manner where shareholders may attend in person at a physical location or participate through the online platform.

Why it is Important to Review Meeting Materials

Key parts of each of these documents will inform you about what you are voting on. At an annual general meeting, you’ll be electing the people who are managing the affairs of the company. You’ll also be appointing the auditor to oversee the company’s financial reporting.

If the company is holding a special meeting, the company may also ask for your vote on:

  • a large transaction that requires shareholder approval, such as a merger with another company
  • a stock option plan for management
  • important corporate changes

These are important issues that deserve your consideration and your vote.

You’ll Need to Review

As a shareholder of a public company, you may hold shares directly or indirectly. A registered owner holds shares directly with the company. A beneficial owner holds shares indirectly, e.g., through their broker or dealer. The majority of investors own their securities this way.

Whether you are a beneficial or registered owner affects the process for participating at a shareholder’s meeting, e.g., how to submit your vote or voting instructions, as well as how you can exercise certain rights under corporate law.

Notice of Meeting

Sets out the date, time, and place of the shareholders’ meeting (or information on how to access the shareholders’ meeting if it is a virtual meeting). It also sets out the It also sets out the matters on which you are entitled to vote.

Proxy or Notice of Voting Instruction Form

As a beneficial owner, you will likely receive a voting instruction form (registered shareholders receive the actual proxy forms). You will be given options for each of the questions posed by management. Read the instructions in these forms carefully.

Information Circular

The information circular contains instructions on how to vote your shares and information on the matters that you will be voting on, including:

  • information on directors who are standing for election
  • significant shareholders of the company
  • details and background on any special matters to be considered at the meeting, such as a large transaction

Review the information circular to determine how you want to vote on the various matters that will be considered at the meeting. Then, either use the voting instruction form or proxy to vote and send it in by the deadline, or attend the meeting. You may also be given the option of voting by telephone or on the Internet.

Review the instructions in the information circular carefully if you are a beneficial owner and wish to attend the shareholders’ meeting in person or virtually so you can submit your vote at the meeting, or ask questions. You may also be able to attend (or if in virtual format, view) the shareholders’ meeting as an observer, but you may not be able to submit votes at the meeting or ask questions.

What You Should Focus On

Voting Instruction Form or Proxy

Consider if you are comfortable with the people named on the form to vote on your behalf. If not, you could name another person to attend the meeting in your place. If you don’t plan to attend the meeting, complete the voting instruction or proxy, sign it, and submit it by the proxy voting deadline specified in the meeting materials. If you do not, the company will not count your votes.

Information Circular

Read the instructions on the first few pages about how you can vote and what to do if you want to attend the meeting in person. It is particularly important to review instructions where the meeting is in a virtual format and you wish to fully participate, including voting at the meeting and asking questions.

  • Backgrounds of the Proposed Directors - It’s important for directors to own shares in the company to ensure their interests align with the interests of other shareholders. It’s also important to know who is currently serving as company directors and what their backgrounds are.
  • Voting Rules - Check to see if the company allows voting for individual director nominees or requires shareholders to either vote for a group of directors or withhold their vote.
  • Corporate Governance Report - Directors who are actively overseeing the company’s managements should attend most meetings. If some directors attended few meetings, the report should explain why. You may also be interested in matters such as diversity. TSX-listed companies must now provide certain information on representation of women on their boards. Companies must also disclose executive compensation and some companies hold “say on pay” advisory votes.
  • Other Proposals - There may be proposals from the company or, in some cases, from shareholders. The circular will include a description and the company’s position for or against the proposals.

If You Need Help, Consider These Options

  • Ask your advisor to discuss your questions with you.
  • Ask another trusted professional (your lawyer or accountant, for example) to discuss your questions with you.
  • Call the company and ask for a further explanation.
  • Ask your question(s) at the company’s annual general meeting.

Insiders are typically the people who make up a company’s management team, its directors and officers, and key shareholders. For reporting purposes, the company itself is sometimes considered an insider. Canadian securities regulators require reporting insiders to file information about their trades. You can research insider trading activity, using SEDI, Canada’s System for Electronic Disclosure by Insiders. You can also view our how-to videos on SEDI filings to see how insiders file certain reports and disclosures.

How to Review Insider Trading Reports

Reporting insiders must file insider reports within 10 days of becoming a reporting insider, and then within five days after trading the company’s securities. In certain circumstances, insiders who are also control persons must file insider reports within three days of when they sell their shares.

To find out about trading by reporting insiders of a company whose shares you own:

  1. Go to the SEDI website.
  2. "Access public filings".
  3. Choose "view summary reports".

The "insider information by issuer" report gives you a list of all insiders that own securities of the company and have filed reports. The list also shows how many shares, options, or other securities of the company they currently hold.

If some of the trading dates are relatively recent, it’s a good idea to review the "insider transaction detail" report.

What You Should Focus On

When reviewing insider trading reports, look for trends involving most or all of the insiders, and compare recent and past activity.

There are many reasons why an insider might sell shares. For example, officers of junior issuers may sell their options to pay themselves instead of receiving salary or to generate cash for other personal expenses. You might also see insiders exercising stock options and then immediately selling the same number of shares.

There is nothing wrong with any of these practices as long as the insiders aren’t acting on important information that the company hasn’t yet disclosed to the public in a news release.

Pay attention if you notice that most of the reporting insiders are substantially changing their holdings at the same time, whether buying or selling. This can be a sign that the insiders believe the stock is over or under performing and are changing their holdings accordingly.

If You Need Help, Consider These Options

  • Ask your advisor to discuss your questions with you.
  • Ask another trusted professional (your accountant, for example) to discuss your questions with you.
  • Call the company and ask for a further explanation.

An annual report is a summary of a company’s status of what it did over the past year and what it plans to do in the coming year. It reports on the operations and financial results. The company is not required to send an annual report to you as a shareholder, if you have decided not to receive it. As well, the company may choose not to prepare an annual report.

An annual information form (AIF) is a disclosure document providing material information about a company and its business at a specific point in time. The AIF includes the operations, risks, and other external factors that specifically affect the company. Not all companies are required to prepare an AIF under securities law. If the company does prepare an AIF, it must follow a required format. Most public companies post their annual reports and AIFs to their websites.

A company is not required to send you its AIF, but you can find it on SEDAR+.

Focus on These Areas When Reviewing an Annual Report

Letter from the Senior Executive(s)

This high-level summary of the report highlights recent and planned activities, and comments on the company’s current situation and prospects in view of market and economic conditions.

It’s a good idea to compare the information in the executive letter to the information in the AIF, especially the risk factors, as the executive letter may include information with the intent to present the best impression possible on shareholders.

Financial Statements

Annual financial statements tell the story of a company’s financial health and they’re not as mysterious as you may think. See the Financial Statement section for more information on understanding annual financial statements and interim financial reports.

Focus on These Areas When Reviewing an AIF

Management Team

Make sure that management have financial expertise and experience in the industry in which the company operates.

Description of the Business

Here you will find a detailed description of the business – its operations, prospects, and the risk factors that would most likely influence an investor’s decision to purchase shares.

During Your Review, Ask These Questions

  • Are there specific risks or trends that may affect the company’s current or future operations? What are those specific risks or trends?
  • Are you comfortable with management’s plans for dealing with these risks or trends?

If You Need Help, Consider These Options

  • Ask your investment advisor to discuss your questions with you.
  • Ask another trusted professional (for example, your lawyer or accountant) to discuss your questions with you.
  • Call the company and ask for a further explanation.
  • Ask your question(s) at the company’s annual general meeting.

Securities laws require a company to issue a news release when there is a material change in its business operations, assets, or ownership. The information in a news release may affect your decision to buy, hold, or sell a company's securities.

Before acting on any news release, check on SEDAR+ to make sure the company issued it.

What You Should Focus On

Focus on the change in the company's business, operations, or assets under discussion. This is the company's view of things, so you may want to check the information with an independent source.

  • Do you understand the material change or proposed transaction the company is discussing?
  • Do you understand the impact the material change will have on the company?
  • Do you think the change or proposed transaction will benefit the company?

If You Need Help, Consider These Options

  • Ask your advisor to discuss the proposed change with you.
  • Ask another trusted professional (for example, your lawyer or accountant) to discuss the proposed change with you. Call the company and ask for a further explanation.

To learn more about the company, you may also want to review its annual report.

If your company is involved in a takeover bid or issuer bid, you will receive two documents called circulars: a takeover bid circular, describing the bid in detail, and a directors’ circular, setting out whether the directors recommend that you accept or reject the bid. You may also want to use SEDAR+ to see if anyone has filed an early warning report.

What do You Need to do?

If you receive a takeover bid circular, you need to decide whether to sell your shares to the person making the offer.

You normally have a little over three months to make your decision. In some cases, that period of time may be shortened so you may want to monitor the company’s news releases. You may also want to wait to see what the directors recommend to shareholders or until the end of the period to see if a competing bid appears. You may further want to wait to see if the original bidder increases the price or changes the bid terms.

Often the price of the company’s shares will go up while a takeover bid is underway and you can choose to sell your shares into the market.

There will often be several news releases from the bidder and the company. You may want to keep track of these fillings on SEDAR+ and monitor business news.

What Happens if You Decide to Sell?

If you decide to sell your shares to the bidder, you will receive cash or the bidder's shares (or a combination of both) after the bid expires.

Under the law, bids are subject to the conditions that the bidder acquires at least 50% of the shares. This means that even if you decide to sell, the bidder may not actually take your shares if this minimum tender condition is not met. Bids may also be subject to other conditions – you should read the takeover bid circular carefully.

If you decide not to sell your shares, you will continue to hold shares of the original company.

If the person making a takeover bid acquires at least 90% of the shares of the company, they can force you and other remaining shareholders to sell your shares at the same price as offered under the bid.

If the bidder acquires more than two-thirds but less than 90% of the company shares, they may call a “special” meeting of shareholders to vote on a merger between the company and the bidder. If you do not vote in favour of the merger, the bidder will offer you the same price per share that was offered under the bid. Read the information circular in relation to the special meeting carefully to understand your rights.

If the person making the bid acquires more than 50% but does not acquire your shares, that person will have control of the company and can make changes, including appointing their own nominees as directors.

What You Should Focus On

There are two types of takeover bids: cash bids and share-exchange bids (some offers are a mix of cash and shares.)

Cash Bid

The bidder offers to buy your shares for cash. You will need to consider whether you want the money now or want to remain a shareholder. You should also consider how the offer price compares to the market price, and whether you’re comfortable with the person making the offer. The takeover bid circular should contain information regarding the historical price of the company’s shares.

Share-Exchange Bid

The person or company offering to buy your shares will pay you with shares in another company. If the bid is successful and you sell your shares, you’ll end up holding shares in the other company.

Whenever you receive shares of another company in payment, you need to focus on whether you want to invest in that company. Read the takeover bid circular carefully and assess the following factors:

  • The directors and management team.
  • The risks associated with investing in that company.
  • The financial position of that company.
  • Whether it pays dividends, interest, or other distributions.
  • Where the company is listed (e.g. which stock exchange) and its trading history.

If the new company is already public, go to SEDAR+ and review the company’s documents.

If You Need Help, Consider These Options

  • Ask your investment advisor to discuss your questions with you.
  • Ask another trusted professional (for example, your lawyer or accountant) to discuss your questions with you.
  • Call the company and ask for a further explanation.

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