In the case of a Reverse takeover, when is a prospectus needed?

In the context of a Reverse Takeover, a prospectus is typically required if new shares are issued. This is because the issuance of new shares represents a significant change in the capital structure and ownership of the company involved. When a publicly listed company takes over a private company and issues new shares to facilitate this process, regulatory authorities require a prospectus to ensure that all relevant information is disclosed to potential investors.

The prospectus serves as a formal document that provides detailed information about the company, the transaction, and the risks associated with the investment, thus helping ensure that investors are well-informed before making decisions. This requirement enhances transparency and protects investors by ensuring they have access to comprehensive details about the new shares being offered in relation to the Reverse Takeover.

Other scenarios, such as transferring shares to a new entity or changes in market capitalization without new share issuance, typically do not trigger the need for a prospectus, as they may not involve the creation of new securities that require regulatory oversight in the same manner.