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Bullboard - Stock Discussion Forum Quarterhill Inc T.QTRH

Alternate Symbol(s):  QTRHF | T.QTRH.DB

Quarterhill Inc. is a Canada-based company, which is engaged in providing of tolling and enforcement solutions in the intelligent transportation system (ITS) industry. The Company is focused on the acquisition, management and growth of companies that provide integrated, tolling and mobility systems and solutions to the ITS industry as well as its adjacent markets. The Company’s solutions... see more

TSX:QTRH - Post Discussion

Quarterhill Inc > Material change vs material information...
View:
Post by shareholders1 on Oct 03, 2021 9:27pm

Material change vs material information...

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.
Comment by Justhalffull on Oct 03, 2021 10:57pm
Both the OSC and the TSX have  timely disclosure rules with similar language.  This is the TSX statement. .  DEFINITION Material information is any information relating to the business and affairs of a company that results in or would reasonably be expected to result in a significant change in the market price or value of any of the company’s listed securities. So a one time ...more  
Comment by Capharnaum on Oct 03, 2021 11:34pm
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.
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