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In 2020, the pandemic disrupted the Quebec economy and the trend continued in 2021. After a difficult year for local businesses, there is an opportunity for business owners to rethink their business model as they develop their recovery plan. In this context, an initial public offering and equity financing might be a good idea. While the process is relatively costly and time-consuming for senior management, not to mention that it results in a series of obligations for the company and its executives and major shareholders, the benefits far outweigh the disadvantages. Here are five good reasons to take your company public and use equity financing to ensure a successful future. 1. Equity financing: financing your company’s growth differently The moment your company goes public, you significantly expand and diversify your equity financing sources. You are no longer dependent on traditional bank loans. Your company can now raise capital much more easily and at a much lower cost, for example through the issuance of convertible securities, share capital, rights or warrants. In addition, your pool of funders expands considerably, going far beyond founding shareholders, your banker and your very close friends and relatives. All these equity financing tools make it possible to more aggressively manage the growth of your business and take advantage of new business opportunities. 2. Equity financing: facilitating mergers and acquisitions Having a company listed on the stock exchange means having a key advantage when it comes to your expansion plan. Once listed, you can acquire another business using your company’s shares as leverage. This added flexibility increases your chances of success in negotiations. You can thus be more bold in your growth management, as you will no longer be limited to conventional financing methods. 3. Equity financing: gaining notoriety By making the decision to take your business public and opting for equity ?nancing, you will give your business greater visibility. First, the initial public offering will be an opportunity to make your company known to investors through promotional events organized by the brokers participating in the issuance, among others. Second, public companies are often followed by ?nancial analysts, and such attention can be an asset when it comes to marketing products and services. In short, by having your company in the spotlight, it will inevitably gain notoriety, both with investors and economic partners. Finally, for many customers and suppliers, doing business with a publicly traded company is reassuring. They see it as a sign of a well-established business, and this perception can facilitate the conclusion of a sale or supply contract. 4. Equity financing: increasing the market value of your business Better ?nancing costs, greater liquidity for your company’s shares, improved growth potential and increased visibility will all make the market value of your company signi?cantly higher than it was before going public. Once listed, book value will no longer be the main indicator used to determine your company’s worth. It will be worth what investors recognize its value to be, based on its potential for growth and pro?tability and its performance relative to competitors. 5. Company succession made easier When the time comes, it will be much easier for you to retire from your business and bene?t from the fruits of your years-long effort. You will have a number of options, including disposing of your shares through a secondary offering. It will also be easier to attract talented people to take over your business because of the multiple bene?ts that come with the status of public company. The advantages of listing your company on the stock exchange and opting for equity ?nancing are many. In addition to the ?ve points presented here, we could add increased credibility with clients and suppliers, better compensation for key employees, less dilution during fundraising, and others. More companies entering the stock market will rebuild our economy. If you are thinking of transforming your company into a public one, opting for equity ?nancing and taking the plunge into the stock market, do not hesitate to call on one of our lawyers practicing in business law to guide and advise you in the process.

Quebec mining, oil and gas companies are henceforth subject to the imposing disclosure regime under the Act respecting transparency measures in the mining, oil and gas industries (the “Act”), which came into force last October 21. This statute echoes the Extractive Sector Transparency Measures Act (Canada),1 which took effect on June 1, 2015, and follows a global trend to increase the transparency of mining, oil and gas exploration and development. The measures provided for in the Act are aimed at discouraging and detecting corruption, as well as fostering the social acceptability of these activities. Under the Act, the companies subject to the Act are required to declare in a statement, as of the next fiscal year following their current fiscal year on October 21, 2015, the payments covered by the Act made to payees for each project and country in which they have operations. Furthermore, this obligation extends to the subsidiaries controlled by a company subject to the Act. The statements will be made public for five years. Companies subject to the Act Is subject to the Act any company which engages in exploration for or development of mineral substances or hydrocarbons and which meets any of the following requirements: its securities are listed on a stock exchange in Canada and its head office is in Quebec; or it has an establishment in Quebec, exercises activities or has assets in Quebec and, based on its consolidated financial statements, meets at least two of the following three conditions for at least one of its two most recent fiscal years: $20 million or more in assets, $40 million or more in revenue, an average of 250 employees or more. Payments covered The payments covered are monetary payments or payments in kind made to the same payee during a fiscal year, where the total value of those payments is equal to or greater than $100,000. The following payments are subject to disclosure: taxes and income tax, other than consumption taxes and personal income taxes royalties fees, including rental fees, entry fees, regulatory charges and any other consideration for licences, permits or concessions production entitlements dividends other than those paid as an ordinary shareholder of a person subject to the Act bonuses, including signature, discovery and production bonuses contributions for infrastructure construction or improvement Payees The Act defines a payee as a government, a body established by two or more governments, a municipality or an aboriginal community,2 as well as an agent exercising powers or duties for such payees. Application and administration of the Act The administration of the Act is assigned to the Autorité des marchés financiers ("AMF"). To avoid duplication, the Act provides that a statement filed in accordance with the requirements of another state may be substituted for the statement required under Quebec law if the government has determined by regulation that the requirements of that state are an acceptable substitute. The statement must be accompanied by a certificate made by an officer or director of the company subject to the Act, or by an independent auditor, attesting that the information contained in the statement is true, accurate and complete. In addition to the investigative powers generally available to the AMF under the Act respecting the Autorité des marchés financiers (chapter A-33.2), the Act gives it the power to require the communication of any document or information considered useful for purposes of the Act. This includes a list of the mining, oil or gas exploration or development projects in which the company subject to the Act has an interest, an explanation of how the disclosed payments were calculated, and a statement of any policies implemented for purposes of meeting the obligations under the Act. The AMF may also require an audit by an outside independent auditor of the statement or the documents pertaining to the disclosed payments. Penalties Lastly, significant penalties are provided for a failure to comply by a company subject to the Act. In particular, the Act provides for administrative monetary penalties for which the directors and officers are jointly and severally liable, unless they demonstrate that they exercised due care and diligence to prevent the failure which led to the penalty. In addition, the penal provisions provide for a fine of up to $250,000 for a failure to comply with certain significant provisions of the Act. Quebec mining, oil and gas companies will be well-advised to stay informed of the regulations that will be passed by the provincial government and which could provide for exceptions or extensions to the requirements of the Act regarding the companies subject to the Act, the payments covered and the payees concerned. 1 Need to Know newsletter, june 2015. 2 A transitional period is provided for regarding payments made to aboriginal communities. The Act will apply to these communities beginning on June 1, 2017.

Acceleration of filing deadline for insider reports Introduction of the concept of reporting insider; and Simplification of disclosure requirements for stock-based compensation arrangements

Avoid the use of “boilerplate” disclosure Identify the nature of any material forward-looking information as well as material factors and in the disclosure documents Avoid statements pursuant to which a reporting issuer assumes no obligation to update its statements!

New Private Placement Rules: Quebec Harmonizes its Rules with the Rest of Canada

Ten Good Reasons To Take Your Company Public

General Prospectus Requirements

Act Respecting the Legal Publicity of Sole Proprietorships, Partnerships and Legal Persons