An Offering Memorandum (OM) is a document that provides information about an entity and the securities offered under the OM exemption in New Brunswick securities laws.
An Offering Memorandum is a complex legal document that gives rise to significant legal obligations on the part of the issuer, as well as any individual agent who certifies the document on behalf of the issuer. Like other important legal documents it should be drafted with the assistance of an experienced securities lawyer who has a thorough understanding of the business of the issuer.
The OM exemption can be used by an issuer to:
- raise money for a community venture,
- raise money to finance the development of an existing business,
- raise money for operations,
- finance a new project, and
- other initiatives.
The OM and supporting financial statements must be given to each potential investor. To facilitate capital raising, we published Blanket Order 45-507 in the Matter of Exemptions of exemptions from certain financial statement requirements of Form 45-106F2 Offering Memorandum for non-qualifying issuers and Multilateral CSA Notice 45-311, Exemptions from Certain Financial Statement-Related Requirements in the Offering Memorandum Exemption to Facilitate Access to Capital by Small Businesses.
The Notice allows certain issuers relying on the OM exemption to be exempt from:
- the requirement to obtain an audit on financial statements or other financial information, and
- the requirement for financial statements to be prepared in accordance with using Canadian GAAP applicable to publicly accountable enterprises (IFRS).
New Brunswick-based issuers may voluntarily pre-file a draft OM with the Commission pursuant to Local Staff Notice 45-701 Voluntary Pre-Filing of Draft Offering Memoranda under NI 45-106. The scope of Commission staff’s participation and what an issuer can expect when pre-filing a draft OM are set out in the local staff notice. Prior to filing an OM with the Commission, issuers should ensure that they have reviewed Multilateral CSA Staff Notice 45-309 Guidance for Preparing and Filing an Offering Memorandum. The staff notice provides guidance to issuers that intend to rely on the OM exemption and also summarizes the common deficiencies staff have observed in offering memoranda prepared in accordance with Form 45-106F2 Offering Memorandum for Non-Qualifying Issuers.