The LIFE Exemption has become a Game-changer for Retail Investors – Here’s Why

The Listed Issuer Financing Exemption (LIFE) is a relatively new prospectus exemption ... Over the past seven months or so, it has been a game changer for retail investors who want to get in on private placement offerings. [Open in your browser]( [Stockhouse.com]( [Investor Alert] [The LIFE Exemption has become a Game-changer for Retail Investors – Here’s Why] The Private Placement Game-Changer for Retail Investors --------------------------------------------------------------- [Visit the company website]( [Facebook]( [Twitter]( Private Placement Game-Changer for Retail Investors) [LinkedIn]( [Email](mailto:?subject=The Private Placement Game-Changer for Retail Investors&body= Jocelyn Aspa | The Market Herald The Listed Issuer Financing Exemption (LIFE) is a relatively new prospectus exemption that was introduced by the Canadian Securities Administrators in November 2022. Over the past seven months or so, it has been a game changer for retail investors who want to get in on private placement offerings. LIFE exemption overview The LIFE exemption amendment to the National Instrument 45-106 [has enabled]( Canadian-listed public companies to issue 10 per cent of their market cap – roughly C$5 million and up to a maximum of $10 million – and provides alternatives to the capital markets without the same cost or time investment in preparing a short form or shelf prospectus. With that in mind, however, in order for companies to be eligible they must meet certain criteria, including: - Listing on a Canadian stock exchange recognized by a Canadian regulatory authority - Having a listing for at least 12 months in Canada - Filing all documents as required - Having active business operations or its principal asset not be cash or an equivalent to its exchange listing - Preparing a short offering document under the secondary market civil liberty regime As such, this has opened the door for retail investors looking to invest in small market cap companies. For companies, it also provides access to a wider range of investors, making it a win-win situation for everyone involved. [SEE COMPANY PROFILE]( So, how does this benefit investors? First, investors of any income bracket, holdings or assets now have access to a broader range of investment opportunities that have previously been restricted to [accredited investors.]( Additionally, once companies meet the LIFE criteria, other measures are in place that benefit investors such as: - Maintaining active business operations – for example, no capital pool companies – while being in good standing on a recognized exchange for the prior 12 months - A limit on financings of up to 50 per cent of outstanding listed shares during a 12-month period - No holding period for investors - Companies must determine they have sufficient funds to pursue business objectives for at least 12 months following a financing - Proceeds cannot be used for major acquisitions or restructuring, which would require more detailed financial statements and/or shareholder approval under prospectus regulation - The exemption also imposes primary offering liability against the issuer Companies must also disclose information to a regulatory or securities authority with information, such as: - The securities offered as well as the conditions and limitations of the offering - Confirmation that the offering document has not been reviewed by any securities regulator - Certification that the financing document and 12-month continuous disclosure record contain no misrepresentations; - A summary description of the business, recent developments, material facts and business objects; - A disclosure and breakdown of what the funds will be used for after the offering - A description of the funds from any financing in the prior 12 months and variances from the disclosure Case study Let's look at a real-time example. [Ucore Rare Metals (TSXV:UCU, OTC:UURAF)]( a rare earth and critical metals company focused on the most profitable part of the rare earths supply chain in North America, is currently raising capital using the LIFE exemption. The company currently has a private placement offering available, with terms as follows: - Ucore is raising up to $5.35 million - Units are priced at $1 each - Each unit includes one common share and one ½ common share purchase warrant exercisable at $1.25 for a 36-month period from the closing Shares are free trading (no holding period) unless investors fall under one of the following three categories according to [TSXV policy outlined by Osler]( - directors, officers and promoters; - consultants; and - anyone holding more than 10% of the voting rights attached to the issuer's securities. These investors are subject to a four-month holding period under TSXV rules. If the company announces a tranche of the private placement has closed, then the company is on the clock and has 45-days from the initial financing announcement to complete the private placement. Why should this excite retail investors? In the case of Ucore it is a brokered private placement, which is a signal to investors that institutions are willing to use their resources to benefit from the upside of compensation options, offering an extra level of assurance and confidence in the investment. To emphasize: these are the types of offerings retail investors have traditionally been locked out from while institutions and accredited investors reap the rewards. [INVESTOR UPDATES]( The units are priced at $1 and below what the company had been trading prior to the announcement of the offering. In the current marketplace it's common to see downward pressure on an overzealous fear of dilution, but the smart money is on the share price rebounding as the company implements its business plan and then takes advantage of the warrants on offer. The warrants are priced attractively at $1.25 for a company that has spent a good chunk of 2023 trading above that price. The benefit for investors is straightforward. You have 36 months from the time of closing to exercise the warrants. In the instance of Ucore, they are half-warrants, meaning you get the option of purchasing another 50% of your investment in the next 36 months at $1.25 and selling at a higher price. Conducting due diligence is imperative. Investors must examine the business proposition, including promotional material that may be found on sites such as Stockhouse, which is intended as informative. For more information on the company and the private placement, investors should [contact the company or their representatives; and this can done by filling out the form](. Below is a short checklist for investors who want to make a list and check it twice as step one of their due diligence on any offering: - Brokered private placement? - Investment terms (including warrants) - Management knowledge and expertise - Business plan - Recent news - Does the company offer something unique? - Is it timely? - Who needs their product? - How does it fit in with geopolitical issues? - When will the market turn? - State of the economy over the next few years - Is the financing heavily dilutive? - Review offering document on SEDAR Full details [of the private placement]( can be found in The Market Herald Canada's Deal Room. [GET INVESTMENT DETAILS]( This is sponsored content issued on behalf of Ucore Rare Metals, please see full disclaimer [here]( The Information in a Stockhouse Publishing Ltd. Stockhouse Alert is a paid advertisement and is for the viewers information only. The corporate information is purely and solely the responsibility of Ucore Rare Metals Inc. and it is neither commented upon, researched, or in any manner the responsibility of Stockhouse Publishing Ltd., whose only function is as a supplier of media facilities. Any information provided by the advertisers of Stockhouse Publishing Ltd., through its media services, is not to be construed as a recommendation or suggestion or offer to buy or sell securities but is provided purely as an informational media service. Stockhouse Publishing Ltd. makes no warranties or undertakings as to the accuracy or completeness of this information. All due diligence should be done by the reader or their financial advisor. Investing in securities is speculative and carries risk. 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