The Ontario Securities Commission (OSC) granted an exemption from the prospectus requirement for the first trade of shares of Borealis Foods Inc. (New Borealis) after a business combination with Oxus Acquisition Corp. (Oxus). The exemption applies to trades made through an exchange or market outside of Canada or to a person or company outside of Canada. The exemption was necessary because, while New Borealis met most conditions of section 2.14 of National Instrument 45-102 Resale of Securities, Canadian residents owned more than 10% of the securities, exceeding the de minimis threshold.
New Borealis, resulting from the business combination, will not be a reporting issuer in Canada, will only list its shares on the Nasdaq, and will conduct its business primarily outside Canada through U.S. subsidiaries. The company will be an SEC registrant, subject to U.S. securities laws, and will provide shareholders, including Canadian owners, with the same disclosure materials as U.S. shareholders.
The exemption was granted under section 74(1) of the Securities Act (Ontario) with the condition that immediately following the business combination, Canadian owners will own no more than 25% of the total issued and outstanding New Borealis Shares and will represent no more than 25% of the total number of owners. The OSC also granted confidentiality relief, keeping the application and decision private until the earliest of the business combination’s completion, notification by the filer, or 90 days after the decision.
Relevant legislative provisions include the Securities Act, R.S.O. 1990, c. S.5, as amended, sections 53 and 74(1), and National Instrument 45-102 Resale of Securities, sections 2.14 and 2.15. The decision was made on February 5, 2024.