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(b) the issuer is a foreign private issuer;
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(c) the issuer has been subject to the continuous disclosure requirements of any securities commission or
equivalent regulatory authority in Canada for a period of at least 12 calendar months immediately
preceding the filing of Form F-10 and is currently in compliance with such obligations; and
(d) the issuer has outstanding equity shares held by non-affiliates
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with an aggregate market value of at least
US$75 million.
MJDS registration forms, such as Form F-10, permit eligible Canadian issuers to register and publicly offer
securities in the United States, often without SEC review, by using Canadian disclosure documents that are
subject to review by Canadian securities authorities.
A decline in market value of an issuer’s outstanding equity shares below the US$75 million threshold after the
effectiveness of a registration statement filed on Form F-10 does not affect the continued validity of such
registration statement. Any post-effective amendment to the Form F-10 will require the issuer to re-satisfy the
eligibility criteria of Form F-10. However, a Canadian prospectus supplement to the underlying Canadian base
shelf registration statement filed pursuant to Canadian requirements may be filed as a supplement to the Form
F-10 and will not be considered a post-effective amendment for the purpose of having to re-satisfy the eligibility
criteria of Form F-10.
Issuers that are not MJDS eligible may use Form S-3 or F-3 to register securities offered in ATM programs.
Generally, a non-MJDS issuer must be eligible to use Form S-3 or F-3 for primary offerings to take advantage of
ATM offerings, whether pursuant to General Instruction I.B.1 (issuers with at least US$75 million aggregate
market value of common equity held by non-affiliates (the “Non-Affiliate Equity Value”)), or the “baby shelf”
rules (for an issuer that is listed on a U.S. National Exchange, but does not satisfy the market capitalization
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A “foreign private issuer” is defined by Rule 405 of the Securities Act. Generally, a corporation incorporated in Canada will qualify as a foreign
issuer unless, on the last business day of its most recently completed second fiscal quarter (or, in the case of an issuer filing its initial registration statement
with the SEC, 30 days prior to such filing):
(a) more than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the
United States; and
(b) any of the following:
(i) the majority of the executive officers or directors are United States citizens or residents,
(ii) more than 50 percent of the assets of the issuer are located in the United States, or
(iii) the business of the issuer is administered principally in the United States.
A “holder of record” is defined by Rule 12g5-1 under the United States Securities Exchange Act of 1934 (“Exchange Act”). The issuer must look through the
record ownership of institutional custodians, such as Cede & Co, CDS and other commercial depositories, by obtaining the list of accounts for which the
securities are held by the depository and treating each of the accounts as a separate record holder. In addition, when an issuer is determining whether it is
a foreign private issuer, the issuer must look through the record ownership of brokers, dealers, banks or nominees located in (i) the United States, (ii) the
issuer’s jurisdiction of incorporation, and (iii) the issuer’s primary trading market who hold securities for the accounts of their customers, by obtaining the
list of accounts for which the securities are held by the broker and treating each of the accounts as a separate record holder.
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Any person who beneficially owns directly or indirectly, or exercises control or direction over, more than 10% of the outstanding equity shares of an issuer
at the end of the previous fiscal year is deemed to be an “affiliate” for the purposes of Form F-10. “Equity shares” include common shares, non-voting equity
shares and subordinate or restricted voting equity shares, but not preferred shares. The market value of shares held by non-affiliates is determined as of a
date (chosen by the issuer) within 60 days prior to filing the Form F-10. Note that “affiliate” status is determined for this purpose at the end of the last fiscal
year – a holder that climbs above the 10% threshold after year end is not an affiliate for the purpose of the market value calculation, and its shares are
included when calculating shares held by non-affiliates, and a 10% holder that drops below the percent threshold after year end remains an “affiliate,” and
its shares are excluded from the calculation.