Legal & Tax Guide for U.S. Issuers

2 Introduction Through a well-charted growth strategy, U.S. companies can list on TSX Venture Exchange, or Toronto Stock Exchange, and then go on to interlist with NYSE or NASDAQ. This can be an effective strategy for managed growth, while leveraging the liquidity of both the Canadian and U.S. marketplaces. As a U.S. Company, you may be asking… QUESTION Answer Does my company need to be incorporated in Canada or have Canadian operations? No. Many corporations incorporated in the United States, Europe, Asia, and Australia are listed on Toronto Stock Exchange and TSX Venture Exchange. A company is not required to have Canadian operations to list on Toronto Stock Exchange or TSX Venture Exchange. Will my company incur Canadian corporate taxes for the capital raised on Toronto Stock Exchange or TSX Venture Exchange? No. There are no Canadian corporate taxes applicable to capital raised in Canada. Will listing on Toronto Stock Exchange or TSX Venture Exchange prevent me from raising capital in the United States? No. Companies listed in Canada can legally raise capital in the United States through either public registered offerings under the United States Securities Act of 1933, as amended (U.S. Securities Act) and in accordance with applicable state securities laws or pursuant to several exemptions from the general registration requirements of the U.S. Securities Act and state securities laws, which may be available in connection with private capital raising transactions. Will my company automatically be subject to reporting requirements in the United States and Sarbanes-Oxley if my company goes public in Canada? No. There are exemptions available from the registration and reporting requirements of the United States Securities Exchange Act of 1934, as amended (U.S. Exchange Act) and, therefore, the reporting requirements of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley). Your company may qualify for these exemptions through careful structuring of your company’s listing and continued monitoring of the company’s status in the future. There is not a “one size fits all” solution for going public and listing on Toronto Stock Exchange or TSX Venture Exchange. Companies may take a number of routes to complete a successful listing in Canada depending on legal, tax and business considerations. This guide was prepared, in part, with assistance from Dorsey & Whitney LLP and is intended to provide you with general information related to planning your listing in Canada. The information includes a variety of complex legal and tax matters and is not intended to provide legal or tax advice. No legal, tax or business decisions should be based solely on this content. You should consult legal and tax professionals for more information.