RE:Material change vs material information...shareholders1 wrote: Responding to Justhalfull's comment:
"I guess the question is, what is material. With their licensing revenues all over the place, I would suspect it has to be $20 million or more. Less than that may be significant, but not material. They do have some discretion to decide what is material or not. But if it is $40 million or more, I don't believe they have any alternative than to pre-announce."
My understanding is that revenue hits and misses do not constitute "material change" as defined in the OSA. They can be "material information", meaning that insiders cannot trade on such info etc and will need to be disclosed in the normal course (ie each quarter), but they are not a "material change" which requires a relatively immediate press release.
However, once companies get into the habit of preannouncing revenue, they tend to maintain the practice.
Depending on what the incremental revenue from Motorola is, the YTD licensing revenues may turn out to be comparable to 2020. So in this regard, fiscal 2021 with Motorola added is not really a surprise, especially given that managment had described their positive expectations for 2021H2 revenues.
One other set of rules to consider is what the TSX requires, over and above the requirements of the OSA. TSX has more stringent rules, and would appear to require immediate disclosure of a revenue/ profitability hit or miss if it is "material" - ie the TSX listed issuer should not wait to report in the normal course in their quarterly releases. QTRH could take the view that Motorola is now baked into the share price or 2021 will be comparable to 2020, so no additional press release is required.
Last, if the additional revenue or Ebitda due to Motorola is preannounced, it will again beg the question as to why 2020Q4 licensing revenues, which were under 500k, were not preannounced, and instead waited about 10 weeks to get disclosed.
They said the deal was confidential, so they can't disclose the numbers in a news release.
As to Wilan, it is cyclical with results that will vary, so they aren't required to pre-announce a 500k or a 40M quarter, as this is business as usual.