Legal & Tax Guide for U.S. Issuers

10 At a glance U.S. Considerations CONSIDERATIONS U.S. Domestic Issuer Foreign Private Issuer (FPI) Canadian prospectus A Canadian prospectus or Information Statement (in a qualifying transaction with a CPC) is required regardless of jurisdiction of incorporation. Canadian reporting All Canadian public companies are subject to reporting requirements in Canada U.S. registration or qualification of offering A U.S. Domestic Issuer that does not file a registration statement with the SEC or comply with Regulation A in connection with its IPO must qualify for an exemption under the U.S. Securities Act. In cases where neither registration nor qualification will occur the securities issued will be “restricted securities” for U.S. securities law purposes and are traded with a special “.s” designation. A FPI will not generally file a registration statement with the SEC or comply with Regulation A in connection with its IPO. Instead, a FPI normally relies on exclusions available under Regulation S to issue unrestricted shares outside the United States. A FPI may issue shares, which are “restricted securities”, to qualified investors in the United States in private placements. Holders of restricted securities may resell the shares on TSX or TSX Venture Exchange, subject to the requirements of Regulation S. U.S. reporting A U.S. Domestic Issuer that does not file a registration statement with the SEC to register securities offered in the IPO and has its equity securities held of record by fewer than 2,000 persons, or 500 persons who are not accredited investors, would qualify for an exemption from the reporting obligations under the U.S. Exchange Act. A FPI that does not file a registration statement with the SEC to register securities offered in the IPO and has its equity securities held of record by fewer than 2,000 persons, or 500 persons who are not accredited investors, would qualify for an exemption from the reporting obligation under the U.S. Exchange Act. Alternatively, a FPI may qualify for an exemption from registration available under Rule 12g3-2(b). A U.S. Domestic Issuer that files a registration statement on Form S-1 to register securities offered in the IPO will become a reporting issuer and be required to file periodic reports with the SEC on Form 10-K, Form 10-Q and Form 8-K. If the company elects to register the class of securities under Section 12 of the Exchange Act and become a reporting issuer, the company will become subject to the SEC 14A proxy rules, tender offer rules, and certain of its shareholders are required to file beneficial ownership reports on Schedule 13D/G and Section 16 reports. An Issuer that qualifies securities on Form 1-A under Regulation A, is required to file at least one annual report on Form 1-K and is required during such period to provide semi-annual reports on Form 1-SA and current reports on Form 1-U. A FPI that files a registration statement on Form S-1 or Form F-1 to register securities offered in the IPO will become a reporting issuer and be required to file periodic reports with the SEC reports on Form 20-F (or 40-F, if eligible) and Form 6-K. Shareholders are subject to beneficial ownership reporting on Schedule 13G/13D if the company elects to register a class of securities under Section 12 of the Exchange Act.