INN Campaigns as Promotion and Payment Terms

The British Columbia Securities Act was updated in March of 2020. The Act now includes very broad definitions “promotional activity'' and “investor relations activity”. These definitions include:

any activity, including, for greater certainty, any oral or written communication, that by itself or together with one or more other activities encourages or reasonably could be expected to encourage a person

1. 1.to purchase, not purchase, trade or not trade a security, or
2. 2.to trade or not trade a derivative,
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This was a response to the BCSC seeing what they termed Problematic promotional activities by issuers. INN’s understanding is that the BC Securities Commission is in the process of determining what the disclosure requirements will be for issuers who contract with anyone to perform promotional activities. Until those disclosure requirements are determined, the BCSC has strongly encouraged INN to require issuers to disclose their contract with INN according to the policies of their exchange as if the contract were to provide investor relations services.
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This document is not legal advice. All companies should discuss disclosure requirements with their securities and legal counsel in order to determine how to proceed.

TSXV Issuers

INN’s understanding is that the TSXV is requiring all issuers who contract with INN treat that contract as being covered by TSXV Policy 3.4.
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TSXV Policy 3.4 requires service providers (INN) to file a PIF or Form 2C1 when contracting with an issuer. INN will make this submission, within 5 business days of receiving a request from a contracting issuer. Policy 3.4 also requires issuers to file a Form 3C. INN requests that after filing a Form 3C, the issuer advise INN when that form has been approved by the TSXV.
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Policy 3.4 says that promotional services should be paid for on a “fee for service basis”. In some cases, the TSXV has decided that this means fees cannot be paid in advance at the beginning of a contract. INN understands that the TSXV is trying to ensure that promotional services are being paid for on a cash basis only and not in the form of shares for services.
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INN has also experienced issuers being required to provide an “Officer’s Certificate and Understanding” stating that INN has not directly or indirectly participated in any financing of the issuer in the last 6 months and that the issuer will not pay for any future promotional services through the issuance of securities. INN does not know what conditions result in this certificate being required.
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With regards to disclosure of a contract with INN, the following should be included in a press release:

• Issuer has entered into an advertising and investor awareness campaign with Dig Media Inc. dba Investing News Network (INN)
• INN is a private company headquartered in Vancouver, Canada, dedicated to providing independent news and education to investors since 2007.
• For the 12 month term of the agreement, INN will provide advertising to increase awareness of the issuer. INN does not provide Market Making services.
• The cost of the campaign is $X,XXX payable [Payment Terms].
• INN currently holds ## shares in Issuer

TSXV Sample Language

[Company] has entered into an advertising and investor awareness campaign with Dig Media Inc. dba Investing News Network (INN). INN is a private company headquartered in Vancouver, Canada, dedicated to providing independent news and education to investors since 2007 at www.investingnews.com. For the 12 month term of the agreement, INN will provide advertising to increase awareness of the issuer.The cost of the campaign is [Contract Value] payable in [Payment Terms]. INN currently holds no securities in [Company].

CSE Issuers

The CSE issued Notice 2021-003 - Guidance on Investor Relations and Promotional Activity on July 13, 2021.
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This notice explains that the CSE is in the process of updating their Policy 7 to reflect the new legislation. The disclosure requirements required will be a Form 10 and a press release disclosing the following:

• Issuer has arranged for Dig Media Inc. dba Investing News Network (INN) to perform an advertising and investor awareness campaign on the INN website: investingnews.com
• There is no other relationship between Issuer and INN. INN is based in Vancouver, BC and can be reached at 604-688-8231 or info@investingnews.com
• The campaign is contracted to start and end on these dates:
• The cost of the campaign is [Contract Value]

CSE Sample Language

[Company] has entered into an advertising and investor awareness campaign with Dig Media Inc. dba Investing News Network (INN). INN is a private company headquartered in Vancouver, Canada, dedicated to providing independent news and education to investors since 2007 at www.investingnews.com. For the 12 month term of the agreement starting [DATE], INN will provide advertising on its website to increase awareness of the issuer. INN does not provide Market Making services. The cost of the campaign is [Contract Value]. INN can be reached at 604-688-8231 or info@investingnews.com.

Exchange Approval

INN’s understanding is that submitting the Form 3C will result in the TSXV approving or not approving the contract between INN and the issuer. INN is not aware of approval being required from the CSE.

***Confidentiality***

Please note: Issuing a press release including the information above requires permission from INN in advance of dissemination as per your contract with INN.
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