Navigating Regulatory Scrutiny: How Microbix's EBITDA Disclosure Update Reflects Corporate Governance Maturity

In the intricate dance between corporate transparency and regulatory oversight, Microbix Biosystems Inc.'s recent update to its EBITDA disclosures offers a compelling case study. The Ontario Securities Commission (OSC) flagged the company's prior non-compliance with subsection 6.1(e) of National Instrument 52-112 (NI 52-112), which mandates detailed explanations of non-GAAP measures like EBITDA and their reconciliation to IFRS standards. This incident underscores a broader trend: regulatory compliance is no longer merely a checkbox exercise but a litmus test for corporate governance maturity and investor trust.

Regulatory Compliance as a Governance Benchmark

NI 52-112, effective since August 2021, was designed to address the ambiguity and potential misuse of non-GAAP metrics such as EBITDA. The instrument requires companies to disclose the composition of these measures, their relevance to investors, and a quantitative reconciliation to the most comparable IFRS metric. Microbix's initial failure to meet these requirements-a shortcoming highlighted by the OSC-reveals a gap in its governance framework. However, its subsequent revision of investor materials demonstrates a commitment to aligning with regulatory expectations.

This alignment is critical. Academic studies emphasize that robust financial disclosure practices are foundational to corporate governance maturity. For instance, research on Canadian capital markets notes that adherence to NI 52-112 fosters transparency, which in turn strengthens investor confidence and reduces information asymmetry. By revising its disclosures, Microbix not only addressed a regulatory infraction but also signaled to stakeholders that it prioritizes accountability-a hallmark of mature governance.

The Investor Trust Imperative

The OSC's intervention highlights a broader regulatory shift: transparency in non-GAAP measures is increasingly tied to investor trust. Under NI 52-112, companies must avoid "misleading" investors by ensuring non-GAAP metrics are clearly defined and consistently reported. For Microbix, this meant adding detailed explanations of how EBITDA is calculated and its utility in assessing operational performance.
Such steps are not trivial. A 2025 study by the Canadian Securities Administrators found that companies with transparent EBITDA disclosures experience lower capital costs and higher investor retention. This aligns with broader investor behavior trends: research shows that increased private firm disclosure can reduce demand for public equity, as investors gravitate toward entities that provide clarity. By proactively updating its disclosures, Microbix mitigates the risk of eroding investor trust-a critical asset in competitive biotech markets.

Regulatory Evolution and Corporate Adaptability

The regulatory landscape itself is evolving. In November 2025, the CSA proposed amendments to NI 52-112 to align with IFRS 18, which introduces "management-defined performance measures" (MPMs) into financial statements. These changes aim to close gaps in oversight, ensuring that metrics like EBITDA remain subject to regulatory scrutiny even when included in management reports. For companies like Microbix, this means continuous adaptation to maintain compliance-a process that inherently strengthens governance structures.

Notably, the proposed amendments also permit the incorporation of disclosures by reference from financial statement notes, reducing duplicative reporting while maintaining clarity. This flexibility underscores a regulatory philosophy that balances rigor with practicality, enabling companies to streamline compliance without sacrificing transparency. Microbix's updated disclosures, which now include detailed reconciliations and cautionary language, exemplify this balance.

Conclusion: Compliance as a Strategic Advantage

Microbix's EBITDA disclosure update is more than a response to regulatory pressure-it is a strategic move to reinforce its governance framework and investor credibility. In an era where ESG and sustainability disclosures are increasingly intertwined with financial reporting, the ability to navigate regulatory scrutiny is a competitive advantage. As the CSA and other regulators continue to refine disclosure requirements, companies that treat compliance as a dynamic, governance-enhancing process will outperform those that view it as a static obligation.

For investors, the lesson is clear: regulatory compliance, particularly in the realm of non-GAAP metrics, is a proxy for corporate governance maturity. Microbix's journey illustrates that transparency is not just about avoiding penalties-it is about building long-term trust in an increasingly complex capital market.