Certain statements included in news releases constitute ‘forward-looking information’ within the meaning of applicable securities laws, the respective policies, regulations and rules under such laws are ‘forward-looking statements’ within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
What Are Forward-Looking Statements?
Forward-looking statements of public limited companies are statements that predict or anticipate future events, trends, or performance.
They are not statements of historical fact and are often identified by words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may,” “should,” or similar expressions. Although not all forward-looking statements contain these identifying words.
These statements can appear in various forms, including:
- Financial projections: Forecasts of future revenues, earnings, or other financial metrics.
- Business plans: Descriptions of future strategies, initiatives, or product developments.
- Management’s discussion and analysis (MD&A): Commentary on future trends, risks, and uncertainties.
Purpose of Forward-Looking Statements
Specific forward-looking statements in news releases are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments.
Companies provide forward-looking statements for several reasons:
- To provide investors with insights into management’s expectations for the future. This helps investors make informed investment decisions.
- To communicate the company’s strategic direction and growth prospects. This can attract investors and build confidence in the company’s future.
- To comply with securities regulations. In many jurisdictions, public companies are required to disclose certain forward-looking information.
Risks and Limitations
Companies tend to caution that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. There can be no assurance that any of the intended benefits and aims of the company’s assumptions will be realized.
Actual results may differ materially from those projected due to various factors, including:
- Economic conditions: Changes in economic growth, interest rates, or inflation.
- Industry trends: Shifts in consumer demand, competition, or technology.
- Company-specific factors: Changes in management, operations, or financial performance.
Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. Forward-looking statements are inherently uncertain and involve risks and assumptions that may not materialize.
Legal Considerations
Because forward-looking statements are not guarantees of future performance, companies typically include disclaimers to limit their liability. These disclaimers often state that:
- The statements are based on current expectations and assumptions, which are subject to change.
- Actual results may differ materially from those projected.
- The company undertakes no obligation to update or revise the statements.
Material risk factors and assumptions include those set out in Annual Information Form and Annual Management Discussion and Analysis for the year, which is available on SEDAR+ and EDGAR. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates.
Importance for Investors
Investors should carefully consider forward-looking statements but not rely on them exclusively. It’s essential to:
- Understand the risks and assumptions underlying the statements.
- Consider other sources of information, such as historical data and industry analysis.
- Recognize that actual results may differ from projections.
IMPORTANT: Other than as specifically required by law, companies undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.
In general, forward-looking statements are provided for the purposes of assisting in understanding the company and its business, operations, risks, financial performance, financial position and cash flows as at and for the periods indicated and to present information about management’s current expectations and plans relating to the future and such information may not be appropriate for other purposes.
By understanding the nature and limitations of forward-looking statements, investors can make more informed investment decisions.
