Cadence and Harmony are keen to get some more investment in MusicWithMe Ltd. They have created a prospectus for potential investors to look at. Both Cadence and Harmony have had a look at the prospectus before it was sent to be laid out by a professional designer. They were both happy with the prospectus and sent it off. Once printed, however, there were several issues with the prospectus. The prospectus was missing an entire row of liabilities in the form of loans owed by MusicWithMe Ltd. This is the fault of the professional printing company they used and was caused by a faulty printer. Cadence and Harmony were sent a sample copy that was printed by a different printer and did not have the defect. The prospectus was also missing a $50,000 payment that had been made to MusicWithMe Ltd very recently. The payment was from a client who had a long-term payment plan but unexpectedly decided to pay the entire money owing early and outright. Neither Cadence or Harmony are aware of this yet. Finally the prospectus outlines future projections of musical instrument purchases. Cadence and Harmony found statistics on a government website that outlines the plan for all school to have music programs by the end of 2022. Cadence and Harmony include this in the prospectus, however the statistic is actually out of date and all schools achieved this goal in late 2021. This means that there will not be a rise in instrument purchases as indicated in the prospectus. Neither Cadence or Harmony were aware that this information was out of date. Another statistic that Cadence and Harmony include is that children as young as five years old can buy their instruments. This is slightly misleading in terms of the instruments that MusicWithMe Ltd sell, which are all adult sized instruments. MusicWithMe Ltd does not sell instruments for children. Neither Cadence or Harmony play a musical instrument and they are not aware that instruments such as violins, banjos and guitars come in children's sizes.

These issues are pointed out to Cadence and Harmony. They come to you for advice on their obligations preparing a prospectus, any legal issues that may arise with their prospectus and any possible defence they may use.