QUEBEC

Securities Regulation and FrontFundr

FrontFundr supports investments by Quebec residents under various prospectus exemptions available to companies raising capital, including*:

1. National Instrument 45-110 Start-up Crowdfunding Registration and Prospectus Exemptions – any resident of Quebec may purchase securities from any private company with its head office in Canada provided that the following conditions are satisfied:
   
   • An individual invests no more than $2,500 unless deemed suitable by a registered dealer (FrontFundr), in which case the investment limit is increased to $10,000
   • A Crowdfunding Offering Document must be made available in French for retail investors when an issuer is using this exemption
     
     
2. National Instrument 45-106 2.9 Offering Memorandum Exemption – under this exemption, any resident of Quebec may purchase securities from any issuer provided, before the purchaser signs the agreement to purchase the securities, the issuer:
   
   • A resident of Quebec can only invest an aggregate of $10,000 in a 12 month period under the Offering Memorandum Exemption if;
     • earned a net income before taxes under $75,000 (or $125,000 combined income with spouse)
     • holds alone or with spouse less than $400,000 in net assets.
   • A resident of Quebec can invest an aggregate of $30,000 in a 12 month period under the Offering Memorandum Exemption if;
     • earned a net income before taxes exceeding $75,000 (or $125,000 combined income with spouse) in each of the two most recent years and who reasonably expects to exceed that net income in the current year; and/or
     • holds alone or with spouse at least $400,000 in net assets.
   • A resident of Quebec can invest an aggregate of $100,000 in a 12 month period under the Offering Memorandum Exemption if;
     • the investor qualifies as an eligible investor under the description as above, and the investment is deemed suitable by a exempt market dealer (FrontFundr)
   • Obtains a signed risk acknowledgement form from the purchaser; and
   • Delivers an offering memorandum, prepared in the required form and available in French, to the purchaser.
     
     
3. National Instrument 45-106 2.3 Accredited Investor Exemption –any resident of Quebec may purchase securities from any issuer, provided the purchaser satisfies any of the following criteria:
   • earned a net income before taxes exceeding $200,000 (or $300,000 combined income with spouse) in each of the two most recent years and who reasonably expects to exceed that net income in the current year;
   • has alone or with spouse at least $1 million in financial assets (cash and securities) before taxes. (In calculating an individual's financial assets, any outstanding loans incurred to acquire those assets must be deducted.);
   • holds alone or with spouse at least $5 million in net assets; or
   • is a corporation, limited partnership, trust or estate having net assets of at least $5 million.
     
     
4. National Instrument 45-106 2.5 Friends, Family & Business Associates Exemption –any resident of Quebec may purchase securities from any issuer, provided the purchaser satisfies any one of the following criteria:
   • Is a spouse, parent, grandparent, brother, sister, child or grandchild of a director, executive officer, founder or control person of the issuer;
   • Is a parent, grandparent, brother, sister, child or grandchild of the spouse of a director, executive officer, founder or control person of the issuer;
   • Is a close personal friend of a director, executive officer, founder or control person of the issuer; or
   • Is a close business associate of of a director, executive officer, founder or control person of the issuer.

*Please note that above list is a summary of most used exemptions and criteria, and may not be up to date. For latest information and a complete overview visit the Quebec Securities Commission website.