We are pleased to announce the launch of the new Cleantech Venture Capital Budget of $5 million in tax credits for the 2008 taxation year which will facilitate equity capital investment up to $16.67 million in B.C. companies substantially engaged in a qualifying activity related to the commercial exploitation of clean technology.

In accordance with Regulation 11(3) of the Small Business Venture Capital Act, substantially engaged is defined as 50% or more of the company's assets and expenses are directed towards a qualifying activity, the company has a permanent establishment in B.C., and, not more than 20% of the company's assets are located outside of B.C.

The qualifying activities making a company eligible for this new budget are listed below pursuant to Regulation 11(1)(f) of the Small Business Venture Capital Act:

11 (1) (f) the manufacture and processing and research and development within British Columbia for commercial exploitation of technologies that

(i) increase energy efficiency and conservation,

(ii) reduce greenhouse gas emissions, or

(iii) reduce the environmental impact of energy production, generation, storage, transmission, delivery, provision or conversion

'Greenhouse gas' is defined by the Greenhouse Gas Reduction Targets Act as meaning any or all of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and any other substance prescribed by regulation.

If you believe your company qualifies under this budget please submit a registration application and business plan demonstrating eligibility including the estimated amount of greenhouse gas reduction for the current fiscal year. 

In each subsequent annual report, to be submitted by program registrants, the actual amount of greenhouse gas reduction for the fiscal year and an estimate for the subsequent fiscal year will be required. These amounts will be reported to other B.C. Government agencies and these agencies may request additional information in order to validate the amounts reported.

If you have any questions regarding this new budget please contact our office at

1-800-665-6597.

Sincerely,

Alan Thomson

Administrator

Small Business Venture Capital Act

The British Columbia Securities Commission (“BCSC”) has requested our assistance in conveying the latest news on the proposed National Instrument 31-103 Registration Requirements that could potentially have an impact on your future operations, specifically, BCSC registration requirements.

Please review the following message to ensure that you are fully aware of the implications and what, if any effect, that they will have on your operations. Should you have any questions or wish to submit comments on the proposal please contact the BCSC directly.

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Subject: Publication for comment of NI 31-103

On February 29, 2008, the Canadian Securities Administrators (CSA) published for a second comment period proposed National Instrument 31-103 Registration Requirements. This rule is designed to streamline, harmonize and modernize registration requirements across the country. You can find the rule and all related documents here: http://www.bcsc.bc.ca/policy.aspx?id=6236&cat=BC%20Notices.

British Columbia Securities Commission recommends that you read the CSA notice first, as it provides important background and highlights the significant changes we have made to the rule since the first publication in February 2007. It also provides details on where and how to submit comments. The BC notice describes, among other things, how the BCSC proposes to approach the registration exemptions and exempt market dealer category.

Registration, when NI 31-103 comes into effect (likely Spring 2009), of investment fund managers, managers of investment funds - both public AND private - will be required. Proposed registration requirements (including minimum capital and insurance, financial reporting, compliance and supervision, and conflicts management) are set out in NI 31-103. The rule also contains a very limited exemption from registration for managers "private investment clubs" (see section 8.7 of NI 31-103). You can find additional discussion of the registration of fund managers on page 9 of the notice which accompanied the first publication: http://www.bcsc.bc.ca/uploadedFiles/CSA_Notice_Request_for_Comment.pdf.

Registration of Exempt Market Dealers

Today, every jurisdiction, except Ontario and Newfoundland and Labrador, has registration exemptions for capital-raising (e.g. the offering memorandum exemption; the accredited investor exemption). These exemptions are set out in NI 45-106. As a result of these exemptions, a person who sells prospectus-exempt securities outside of Ontario and Newfoundland and Labrador does not have to be registered.

However, when NI 31-103 comes into effect, every jurisdiction except for BC and Manitoba will repeal the registration exemptions for capital-raising. Without these exemptions, a person who is in the business of trading in prospectus-exempt securities will need to register as an exempt market dealer (EMD). NI 31-103 sets out the registration requirements for EMDs. The companion policy sets out guidance on what it means to be "in the business".

BC and Manitoba are proposing to maintain the registration exemptions for capital-raising and safe securities, subject to certain conditions:

• the exemptions will not be available to a person operating outside of BC or Manitoba who also wishes to operate in BC, and
• the exemptions will not be available to a person who is registered in any category (e.g. a mutual fund dealer or adviser) in any jurisdiction (including BC and Manitoba.

Also:

• a person relying on the exemptions must provide the investor with a risk acknowledgement form similar to that currently required under our offering memorandum exemption, and
• a person relying on the exemptions must file an annual report with the Commission (details to be worked out) outlining their use of the exemptions.

So, if an issuer only trades shares (solicits investments) in BC (i.e. from a BC office to BC investors) or Manitoba, it will not need to register as an exempt market dealer. A trade in any other Canadian jurisdiction will trigger the registration requirement.

Request for Comments

We encourage affected parties to submit written comments. All comments are due by May 29, 2008. Please consult the CSA notice for how and where to submit your comments: http://www.bcsc.bc.ca/uploadedFiles/securitieslaw/policyBCN/CSA_Notice_to_BCN2008-11(31-103).pdf

If you have any questions, please feel free to contact Ms. Laura Bliss of the BCSC. Typically she is in the office Wednesday. - Friday. Ms. Bliss’s contact information is:

Laura Bliss

Senior Legal Counsel

Policy Branch, Capital Markets Regulation Division

British Columbia Securities Commission

604-899-6666 (direct)

800-373-6393 (toll free in BC and Alberta)

In her absence, you can contact Mark Wang, Manager, Policy & Exemptions, at mwang@bcsc.bc.ca or 604-899-6658.

The Venture Capital Programs continue to experience high demand, resulting in the 2008 New Media Venture Capital Budget being fully utilized.  All unused equity authorizations under the Equity Capital Budget are rescinded effective  April 11, 2008.

The Venture Capital Programs continue to experience high demand, resulting in the 2008 Equity Capital Budget being fully utilized.  All unused equity authorizations under the Equity Capital Budget are rescinded effective  March 5, 2008.

This is to advise you that the Investment Capital Branch has obtained approval to proceed with a project to automate the tax credit application process for the following types of program clients:

1. eligible business corporation (EBC)

2. employee share ownership plan (ESOP)

3. employee venture capital corporation (EVCC)

4. venture capital corporation (VCC)

The goals of this project include the following:

1. Provide our clients with a web access to the Tax Credit Application process. The single access will allow clients to use the appropriate features.

2. Create a process that minimizes or eliminates manual intervention by Ministry staff. This means that the process will be accessible, consistent and timely to all clients.

3. Provide clients with the ability to submit data with respect to their investors and the relevant investment detail directly to the system and obtain confirmation that data has been accepted or error messages in a timely manner.

4. Generate an electronic tax credit certificate record that can be accessed and printed by the individual investors. If this goal is not possible the system will allow clients to access and print the tax credit certificates for distribution to the investors.

5. Create reports, accessible to each client that would provide information about investor investments processed, tax credit certificates generated, the status of each company’s equity capital authorization (amount used, amount remaining, etc.) and the tax credit budget that your equity authorization is using (ECP, CVCP, ESOP, EVCC, etc.).

We will be finalizing the system design over the next two or three weeks and we will provide updates on the ‘What’s New’ section of our web site.

Our plan is to have the system in place by March 31, 2008 so that we can process investor investments eligible for the 2008 tax credit through the system.

As part of the development process we hope to obtain the cooperation of clients from the various programs to provide input in to the development and possibly test the application before it goes in to production.

If we contact you for assistance, we hope that you can make yourselves available. Your commitment could be as much as the equivalent of a week’s work but it would be spread over the period of the project and would likely include only one or two sessions of one to four hours each. The rest of the time would be time that could be broken in to short periods of less than one hour.

Once this web access is operating we will examine the value of expanding it to other parts of our programs. This could include the Additional Equity Applications, Reporting Business Investments, Annual Returns, the IPA Releases and Registration Applications.

Please be informed that the 2007 program budget for VCC/EBC single year allocations under the New Media Venture Capital Budget is now effectively sold out.

Therefore, under Section 29.1 of the Small Business Venture Capital Act, all unused equity authorizations under this program budget are hereby rescinded effective immediately. Any funds raised that have not been reported in accordance with our notice dated August 17, 2007 will not be eligible for tax credits.

We are now accepting "Additional Equity Applications" for the 2008 program year.

Due to the success of the Investment Capital Programs, we are rapidly achieving budget capacity for 2007 allocations under the New Media Venture Capital Budget. Please see the graph below. In anticipation of reaching budget capacity, our office has established the following procedures:

1. If you have a completed Share Purchase report (SPR) please fax it to our office (250-952-0371) before 4:30 PM today. These will be allocated 2007 tax credits.

2. Any SPRs received after 4:00 PM will be allocated 2007 tax credits on a first come, first served basis. We will confirm receipt of the SPR within two days.

3. Effective Monday morning (August 20th), before accepting monies from investors, you must call our office toll free at 1-800-665-6597 and speak with the Portfolio Manager of the Day (POD).

4. The POD will confirm whether the budget capacity is sufficient to accommodate your request and add your request to the waiting list.

5. If there are budget funds available, you will have 48 hours to submit the Share Purchase Report (SPR) to our office by fax (250-952-0371). If the SPR is not received within 48 hours, the confirmation will be null and the tax credits will be returned to the budget pool.

6. The website will be updated daily with the latest budget figures. It is important that you follow these instructions.

They have been designed to give all clients an equal opportunity to access the maximum amount of 2007 tax credits available.

Please ensure that the e-mail address being used is accurate and is being monitored on a regular basis.

If you have any questions regarding these procedures, please send your questions by e-mail or phone the POD at 1-800-665-6597.

As further evidence of our British Columbia’s strong business environment I wish to advise that the 2007 program budget for VCC/EBC single year allocations under the Equity Capital Budget and Community Venture Capital Budget are effectively sold out.

Therefore, under Section 29.1 of the Small Business Venture Capital Act, all unused equity authorizations under these two program budgets are hereby rescinded effective immediately 12:30pm, June 26, 2007.

Any funds raised after this time will not be eligible for tax credits.

This does not apply to those Program Registrants who are authorized to raise funds under the New Media Venture Capital Budget.

The final deadline to submit outstanding signed Share Purchase Reports to the Investment Capital Branch is 9:00am Wednesday, June 27, 2007. Documents can be submitted via fax (250 9520371) or emailed to your Portfolio Manager, who will confirm receipt.

We are now accepting "Additional Equity Applications" for the 2008 program year.

Due to the success of our office's programs again this year, as can be seen by the graph below, we are rapidly achieving budget capacity for single year allocations granted for 2007 in the Community Venture Capital and Equity Capital Budgets. In anticipation of achieving budget capacity, our office has established the following procedures:

1. The website will be updated daily with the latest budget figures.

2. When budget capacity has been reached an email broadcast will be sent to advise all program registrants.

3. The email broadcast will also indicate that all program registrants have a period of time to send in share purchase reports not previously submitted.  This period may be less than 24 hours and will probably be no more than 36 hours.

4. During this time period share purchase reports will be accepted by either fax or email based on the time of receipt on a first-come-first-serve basis.

5. It is the company's (not the individual investor's) responsibility to send in share purchase reports.

6. Receipt of share purchase reports will be confirmed by your portfolio manager.

7. Any share purchase reports received during this period of time but after budget capacity has been fully allocated will be put on a waitlist for further review.

8. Applications for additional equity authorizations to commence on January 1, 2008 will be accepted upon budget closeout for 2007.

Please ensure that the e-mail address being used is accurate and is being monitored on a regular basis.  If you have any questions regarding these procedures please send your questions by e-mail.