On December 20, 2012, securities regulatory authorities in Yukon, Alberta, Saskatchewan, Northwest Territories, Nunavut, Manitoba, Québec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador, (the “participating jurisdictions” or “we”) are each publishing a harmonized interim local order (OM-form exemption order) that provides exemptions from certain requirements of Form 45-106F2 Offering memorandum for non-qualifying issuers. The objective in issuing the OM-form exemption orders is to facilitate capital raising for early stage businesses and other small and medium sized enterprises (SMEs) while maintaining appropriate investor protection.
Notably missing from the list of participating regulators were Ontario and BC.
In discussions with Don Rodgers of the Alberta Securities Commission (“ASC”) on January 23rd of 2013, he indicated that “the ASC passed a new Blanket Order 45-512 (the link is below as is the link to the press release) which allows for an exemption from certain financial statement requirements of Form 45-106F2, the Offering Memorandum for Non-Qualifying Issuers. In short 45-512 limits the capital raising to $500,000.00 CDN and only allows for each Alberta resident to invest $2,000.00 in any calendar year in each individual investment by an issuer. As well the issuer is exempt from some of the financial statement requirements. The links below will provide more information.”
http://albertasecurities.com/Search/Results.aspx?k=45-512 (link to the Exemption itself)
http://albertasecurities.com/news/Lists/ASC%20News/DispForm.aspx?ID=1129 (link to the press release).
While 45-512 restricts the amount of capital raised to $500K, companies may still raise capital concurrently from angel investors using the ‘accredited investor’ exemption. In essence the exemption means that issuers won’t require audited financial statements when using an offering memorandum to raise capital from friends, family and business associates.