Venture Law Corporation

Use this checklist when preparing your offering memorandum, before accepting subscriptions, and when preparing amendments. This checklist consolidates requirements from Form 45-106F2 and common deficiencies identified by regulators.

Preliminary Steps

Confirmed which form is required (Form 45-106F2 for most issuers; Form 45-106F3 if listed on the CSE or TSX/TSX-V).
Downloaded current version of form from securities regulator website.
Discussed timeline and requirements with auditor.
Identified individual responsible for compliance monitoring.
Budgeted for legal and accounting review.

Form and Structure

Using correct form (Form 45-106F2 or F3).
All required items included in prescribed order.
No sections marked “not applicable” without proper justification.
Cover page includes all required legends and information.
Date on cover page is accurate.
Document written in plain, clear language.

Item 1: Funds

Available Funds Table

Minimum and maximum offering amounts disclosed.
Amounts previously raised under offering memorandum disclosed (if applicable).
Commissions and offering costs accurately disclosed in table (not stated as zero if costs exist).
“Additional sources of funding” includes only currently arranged funding (not speculative future financings).
Working capital deficiency properly included (if applicable).
Available funds calculation is mathematically accurate.

Use of Available Funds Table

Detailed breakdown provided (not generic descriptions).
Interest payments and distributions included if no other cash flow sources available.
All payments to related parties specifically identified.
Capital costs, general and administrative costs, and working capital adequately detailed.
Use of funds consistent with business description and development plan.

Item 2: Business of the Issuer

Business description is detailed and specific (not generic).
Development of business described with milestones.
Current competition specifically described.
Prospective competition discussed.
Alternative or competing technologies addressed.
Resources needed for R&D disclosed (if applicable).
Organizational chart included if structure is complex.
Subsidiary-level disclosure included when subsidiaries will conduct main business.
Material agreements summarized with key terms (not just attached or referenced).

Item 3: Management and Compensation

Compensation table completed with actual amounts disclosed in table (not just footnotes).
Compensation to professional corporations and holding companies included.
All forms of compensation disclosed (salary, fees, equity, benefits, deferred).
Management experience descriptions are specific with actual job titles and companies.
Experience descriptions explain relevance to current role.

Items 4-11: Structure, Securities, and Rights

Capital structure clearly described (Item 4).
Terms of securities offered clearly disclosed (Item 5).
Purchaser withdrawal rights and statutory rights disclosed (Item 6).
All other material facts disclosed (Item 7).
All material risk factors identified and disclosed (Item 8).
Reporting obligations accurately disclosed (Item 9).
Resale restrictions clearly disclosed (Item 10).

Item 12: Financial Statements

All financial statements prepared in accordance with IFRS (Canadian GAAP for publicly accountable enterprises).
NOT using private enterprise GAAP for company financial statements.
All required statements included: financial position, comprehensive income, changes in equity, cash flows.
Comparative periods and complete notes included.
Annual statements are audited with unmodified opinion.
Audit report complies with Canadian auditing standards.
No inappropriate “may not be appropriate” language in any Notice to Reader.
Interim financial statements included when required (OM dated more than 120 days after year-end).

Other Critical Requirements

No material forward-looking information shared with prospects unless included in offering memorandum.
Forward-looking information complies with NI 51-102 requirements (if included).
All marketing materials consistent with offering memorandum disclosure.
Risk factors comprehensive and specific (not generic).

Filing and Distribution Procedures

System in place to file offering memorandum within 10 days of first distribution.
Calendar reminders set for filing deadline.
Process established to identify material changes requiring amendment.
Calendar reminders set for financial statement amendment deadlines.
All distribution participants instructed not to use outdated offering memoranda.
Clear procedure to halt distributions when material change occurs.

Final Review

Securities lawyer reviewed complete offering memorandum.
Accountant reviewed financial statements and use of funds disclosure.
Someone unfamiliar with business read offering memorandum for clarity.
All cross-references verified for accuracy.
Proofread for typographical and formatting errors.
Overall impression is professional, balanced, and credible.
If in Saskatchewan or New Brunswick, considered pre-filing review program.

Item 13: Certificate

Certificate in prescribed form with all required signatures.
Certificate properly dated (same date as signing and cover page).
Certificate dated on or after audit report date.
Certificate not back-dated.
Certificate placed at end of offering memorandum (after all other content).
All signatories reviewed complete offering memorandum before signing.

Additional Requirements for Specialized Issuers

Certain issuers face additional disclosure requirements beyond the standard Form 45-106F2 or F3 requirements. If your business falls into one of these categories, consult with qualified advisors to ensure compliance with all applicable requirements.

Mining Issuers

Mining development and exploration companies must comply with National Instrument 43-101 Standards of Disclosure for Mineral Projects:

Form 43-101 technical report filed as required by subsection 4.2(1)(d) of NI 43-101 to support scientific or technical information describing mineral projects.
Technical report prepared by qualified person as defined in NI 43-101.
All disclosure about mineral properties complies with NI 43-101 requirements.
Technical report filed with first Form 45-106F1 exempt distribution report.

Oil and Gas Issuers

Oil and gas companies must ensure all disclosure about oil and gas activities conforms to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities:

All oil and gas disclosure prepared in accordance with NI 51-101.
Reserve and resource estimates comply with prescribed standards.
Qualified reserves evaluator or auditor involved as required.

Real Estate Activities (Schedule 1 of Form 45-106F2)

If the issuer is engaged in real estate activities, Schedule 1 of Form 45-106F2 requires additional disclosure:

Business objectives completed in accordance with Schedule 1
Property details disclosed: location, size, current and proposed use
Purchase price and date of acquisition disclosed
Tax and assessment information provided
Aggregate acquisition cost disclosed
Mortgage and lien details provided
Title details and registered owners disclosed
Appraisals disclosed if property acquired within 2 years or if issuer intends to acquire property with proceeds
Development plans and permits disclosed
Environmental matters disclosed

For more guidance on what to look for when preparing an offering memorandum read our latest article Preparing a Compliant Offering Memorandum: A Practical Guide for Issuers and Their Advisors.What every CEO, CFO, director, and professional advisor needs to know about offering memorandum compliance.