Decision No. 2025-PDG-0028: Coordinated General Decision 45-930 Regarding the Prospectus Exemption for New Reporting Issuers

DECISION NO. 2025-PDG-0028 Coordinated General Decision 45-930 Regarding the Prospectus Exemption for New Reporting Issuers

Definitions

1. The expressions defined in the Securities Act, RLRQ, c. V-1.1 (the "Act"), National Instrument 14-101 Definitions, c. V-1.1, r. 3, National Instrument 33-105 Underwriting Conflicts, V-1.1, r. 11 (the "NI 33-105"), National Instrument 41-101 General Prospectus Requirements, c. V-1.1, r. 14, National Instrument 44-101 Short Form Prospectus Distributions, c. V-1.1, r. 16, National Instrument 45-106 Prospectus and Registration Exemptions, c. V-1.1, r. 21, and National Instrument 51-102 Continuous Disclosure Obligations, c. V-1.1, r. 24 (the "NI 51-102") have the same meaning in this decision.

2. In this decision, we mean: "ineligible OTC issuer": an issuer whose securities are listed and traded on the OTCQX Best Market or the OTCQB Venture Market, or listed on its equivalent, or on any other over-the-counter market that requires it to file an application to that effect; "prior 45-930 offering": any prior offering made under the exemption provided by this decision or a similar substantive decision issued by another regulatory authority or securities commission; "listed equity security": any security of a class of equity securities of an issuer listed on the TSX Inc., the TSX Venture Exchange Inc., CNSX Markets Inc. or Cboe Canada Inc.; "aggregate market capitalization of listed equity securities": the total number of listed equity securities outstanding, multiplied by their price.

Context

This decision aims to provide a new prospectus exemption facilitating capital raising for new reporting issuers.

Decision

3. Pursuant to section 263 of the Act and considering that this does not prejudice the protection of investors, the Autorité des marchés financiers exempts any issuer from the prospectus requirement regarding the offering of securities issued by it to a subscriber when the following conditions are met:

a) a regulatory authority or securities commission in a territory of Canada has stamped the final ordinary prospectus or its amendment relating to the issuer's first public offering in the 12 months immediately preceding the date of filing of the press release referred to in paragraph j;

b) the prospectus referred to in paragraph a included the signed dealer attestation referred to in section 5.9 of NI 41-101;

c) the issuer is a reporting issuer in at least one territory of Canada immediately before the date of filing of the press release referred to in paragraph j;

d) the issuer has filed all periodic and occasional information documents it is required to file under the following:

i) applicable securities legislation; ii) a decision of the regulatory authority or securities commission; iii) a commitment to the regulatory authority or securities commission;

e) the issuer has listed equity securities;

f) the issuer is not an ineligible OTC issuer;

g) the issuer is not an investment fund;

h) the securities to be offered are of the same class as those offered using the prospectus referred to in paragraph a;

i) the offering price per security to be offered under the exemption provided by this decision is not lower than the price per security offered using the prospectus referred to in paragraph a;

j) before soliciting a subscription offer, the issuer publishes and files a press release that meets the following conditions:

i) it announces the offering;

ii) it contains the following statement: "The offering document relating to the offering can be accessed on the issuer's profile at www.sedarplus.ca and at [provide link to the issuer's website, if it has one]. Potential investors are advised to read this document before making an investment decision.";

k) before soliciting a subscription offer, the issuer files an offering document that includes the following information:

i) details of the offering, including the following specifics:

A) the type and number of securities to be offered, and a description of all their significant characteristics;

B) the offering price;

C) the minimum and maximum number of securities that may be offered;

D) whether there may be multiple closings and the expected closing date (if known);

E) the exchange and quotation system, if any, on which the securities are listed, traded or quoted;

F) the closing price of the securities on the trading day preceding the date of the offering document;

ii) any material fact regarding the securities to be offered that is not included elsewhere in a document filed by the issuer;

iii) a detailed description of the issuer's business objectives, recent events affecting it and the use of proceeds;

iv) the use of funds from the first public offering and prior financings since the date of stamping of the prospectus referred to in paragraph a;

v) the amount and source of all significant funds to be used in conjunction with the proceeds of the offering;

vi) in the case where the proceeds of the offering are to be used to finance an acquisition, the information that would be required pursuant to section 10 of Appendix 44-101A1, Short Form Prospectus, if the offering document were a short form prospectus, the date of the short form prospectus then being deemed to be the date of the offering document;

vii) information on the participation of dealers, brokers, intermediaries or others in the offering, including remuneration, commissions or fees received and any information required under NI 33-105;

viii) the following statement on the cover page, in bold type:

"[Issuer Name] is conducting an offering pursuant to Coordinated General Decision 45-930, Prospectus Exemption for New Reporting Issuers, in which it declares that it can offer securities under the exemption provided therein. No securities commission or regulatory authority has passed on the quality of these securities or examined this document. Anyone who states otherwise commits an offence. This offering may not be suitable for you and you should only invest if you are willing to risk the loss of the entire amount invested. It is recommended to consult a registered broker to make this investment decision.";

ix) an attestation including the following statement, in bold type:

"This offering document, as well as all documents filed pursuant to Canadian securities legislation, disclose all material facts regarding the offered securities and contain no false or misleading information.";

x) the signature, date of signature, name and position of the chief executive officer and chief financial officer of the issuer;

l) the issuer does not use the proceeds indicated in the offering document referred to in paragraph k for the following operations:

i) a restructuring transaction;

ii) any other transaction for which it requests holder approval;

m) if the issuer is an emerging issuer, it does not use the proceeds indicated in the offering document referred to in paragraph k for a significant acquisition under Part 8 of NI 51-102;

n) if the securities legislation of the subscriber's place of residence does not provide an equivalent right, the offering document referred to in paragraph k grants the subscriber a contractual right to rescind the subscription contract by transmitting notice to the issuer no later than midnight on the second business day following the signing of this contract by the subscriber;

o) the offering document referred to in paragraph k and any subscription contract grant the subscriber a contractual right of action for nullity against the issuer or for damages, which may be exercised as follows:

i) it is open to the subscriber if the offering document, a document or a document essential within the meaning of section 225.3 of the Act contains false or misleading information, regardless of whether the subscriber relied on this information;

ii) the subscriber may exercise it by transmitting notice to the issuer:

A) in the case of the action for nullity, within a period of 180 days from the signing of the subscription contract for the securities by the subscriber;

B) in the case of the action for damages, within the shortest of the following periods:

1. 180 days from the time the subscriber became aware of the facts giving rise to the action;

2. three years from the signing of the subscription contract for the securities by the subscriber;

C) it is possible to invoke as a defense that the subscriber knew the false or misleading nature of the information;

D) in the case of the action for damages, the recoverable amount:

1. does not exceed the price at which the securities were offered;

2. does not include any or all of the damages that the issuer proves do not correspond to the decrease in value of the securities resulting from the false or misleading information;

E) it is added to the other rights of the subscriber without diminishing them;

p) the issuer displays the offering document referred to in paragraph k on its website, if it has one;

q) in Quebec, the offering document referred to in paragraph k is prepared in French or in French and English;

r) at the time of the offering of securities under the exemption provided by this decision, the issuer reasonably expects to have available funds to achieve its business objectives and meet its cash flow needs for the 12 months following;

s) on the date of publication of the press release referred to in paragraph j, the total amount of the offering, combined with the amount of all other prior 45-930 offerings made during the 12 months immediately preceding the date of filing of this press release, does not exceed $100,000,000;

t) if the issuer has not closed a prior 45-930 offering during the 12-month period immediately preceding the date of filing of the press release referred to in paragraph j, the aggregate market capitalization of the securities included in the offering does not exceed 20% of that of its listed equity securities outstanding on the date of the press release;

u) if the issuer has closed a prior 45-930 offering during the 12-month period immediately preceding the date of filing of the press release referred to in paragraph j, the aggregate market capitalization of the securities included in the offering, combined with that of all other prior 45-930 offerings made during this period, will not exceed 20% of the aggregate market capitalization of its listed equity securities outstanding on the date of the press release announcing the first of the prior 45-930 offerings;

v) the offering does not result in adding a new person participating in control;

w) the offering does not result in a person acquiring beneficial ownership of a number of securities of the issuer sufficient to elect the majority of the issuer's directors, nor to exercise control over such securities;

x) the offering is not made to a person who is an employee or consultant of the issuer or an insider thereof;

y) the issuer closes the offering no later than the 45th day after the date on which it publishes and files the press release referred to in paragraph j.

4. If a material change occurs regarding the issuer after the filing of the press release referred to in paragraph j of section 4 and before the closing of the offering, the issuer terminates the offering until it meets the following conditions:

a) it complies with the obligations provided by securities legislation, including NI 51-102, regarding the material change;

b) it files a modified version of the offering document filed pursuant to paragraph k of section 4;

c) it publishes and files a press release indicating that a modification to the offering document referred to in paragraph k of section 4 dealing with the material change has been filed.

5. The issuer offering securities under the exemption provided by this decision files the declaration prepared pursuant to Appendix 45-106A1, Exemption Trade Report, duly completed, no later than the 10th day after the closing of the offering.

Effective Date

6. This decision takes effect on April 17, 2025.

Made on April 16, 2025

Yves Ouellet President and Chief Executive Officer