Realizing Your Vision - 2018 Guide To Listing - TSX Venture Exchange
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" TSX Venture Exchange and " T MX is proud to be a part Toronto Stock Exchange are of the world’s premier committed to providing a capital formation ecosystem; sophisticated, diversified an engine of opportunity marketplace that connects and innovation at the heart issuers of all size and sectors of the Canadian economy. to the growth capital they need. Canada’s leading markets, Together, our equities exchanges TSX Venture Exchange and help entrepreneurs to achieve Toronto Stock Exchange, their business goals and reach are proven, globally their true potential. From small recognized platforms for to early-stage companies looking companies at all stages of to gain access to public venture development to achieve capital and a strong foothold their growth objectives. in the public market, to larger, We are firmly committed established companies looking to working together with to take their business to the next entrepreneurs, listed level through a listing on TSX, issuers and all of our valued our two-tiered capital formation stakeholders from across ecosystem offers traditional the industry to deliver agile and non-traditional financing solutions to existing and and liquidity solutions that can emerging challenges and be as unique as the businesses to serve our markets with it serves. " excellence. " _ _ Loui Anastasopoulos Lou Eccleston President, Capital Formation CEO & TSX Trust TMX Group
Table Of Contents 6 Realizing Your Vision 7 Are You Ready To Go Public? 9 Canada's Global Capital Markets 13 Opportunities For International & U.S. Companies 14 Steps To Listing 18 Graduation To Toronto Stock Exchange 19 Supporting Your Growth: TSX Company Services SECTORS 21 Diversified Industries 22 Technology & Innovation 26 Mining 28 Energy 32 Directory of Contacts
The sky was the limit. " I realized that as an entrepreneur, going public is like winning the Oscars. " _ Eric Boyko CEO of Stingray Digital Group Inc. (TSX: RAY.A)
6 Going Public Realizing Your Vision Access To Capital And Future Financing Opportunities Going public can provide your company with financing opportunities to grow your business via expansion of operations, hiring or acquisitions. The issuance of public shares can also expand and diversify your investor base by giving you access to pools of capital in Canada, the U.S. and globally. Facilitate Growth As a public company, your shares can be used as a currency substitute to acquire target companies, instead of a direct cash offering. Using shares for an acquisition can be a tax-efficient and cost-effective vehicle to finance such a transaction. This can also improve your ability to complete mergers and acquisitions in a more timely and cost-effective manner. Increase Visibility And Prestige Going public enhances your company’s visibility. Greater public awareness gained through media coverage, publicly filed documents and coverage of your shares by sector investment analysts can provide your company with a higher profile and greater credibility. Ultimately, this can result in a more diversified group of investors following your company, which may increase demand for your company’s shares and potentially increase your company’s value. Provide Liquidity For Shareholders Becoming a public company establishes a market for your company’s shares, providing your investors with an efficient and regulated vehicle in which to trade their shares. Greater liquidity in the public market can often lead to better valuation than would be achieved as a private company. Create Employee Incentive Mechanisms Your employees can participate in the ownership of your company and benefit from being shareholders. Stock options and employee share purchase programs are good mechanisms for compensating your employees without depleting cash reserves. This can serve to ensure stronger employee commitment to your company’s performance and success. Share ownership can have an immediate and tangible value to employees, and can be used as a recruitment incentive.
Going Public 7 Are You Ready To Go Public? Going public is a major milestone for any company and is a decision requiring careful consideration and expert advice. Our team will work closely with your company’s management and expert advisors to guide you through every stage of the listing process. To start, ask yourself the following questions to determine whether you are ready to list: Does your company have an attractive track record or a product or service that has a readily identifiable market and significant growth potential? Does your management team have expertise in your industry sector, and experience in running a publicly traded company? Have your management team and board of directors invested their own capital in the company to support its growth? Will your corporate governance controls withstand the scrutiny of the public markets? If not, is your management team committed to the implementation of effective corporate governance measures? Has your company developed appropriate financial reporting and controls required for a public company?
When opportunity shocks. " Our listing on the TSX is a significant milestone in our story and we believe it marks the start of a new chapter for Shopify as we continue to grow our business and make commerce better for everyone in Canada and around the world. " _ Tobi Lütke CEO of Shopify Inc. (TSX: SHOP)
Canada's Global Capital Markets 3,154 $54.5B 142 issuers call TSX in equity capital new corporate* Venture Exchange raised by listed listings on TSX and Toronto Stock issuers in 2017 Venture Exchange Exchange home and Toronto Stock Exchange in 2017 * "Corporate" excludes ETFs, Closed-End Funds, CPCs and SPACs. As at December 31, 2017. Source: TSX/TSXV Market Intelligence Group.
10 Going Public Canada's Global Capital Markets TSX Venture Exchange (TSXV) and Toronto Stock Exchange (TSX) provide companies with access to equity capital and the benefits of being listed on a leading global exchange with integrity, liquidity and opportunity. Gateway To North American Capital Companies listed on TSXV and TSX have access to North American capital markets, one of the world’s largest capital pools. With a wide investor base providing liquidity, our Exchanges serve as access points to the Canadian and U.S. markets for companies seeking growth and expansion capital. Top-Rated Banking System Equity Financing On TSXV And TSX ($ Billions) Canada’s banking system has been ranked as one of the soundest in the world for nine years in a row by the World Economic Forum. IPOs Canada’s banks are also well managed, well regulated and well Private Placements capitalized. A strong and stable banking system is at the heart Public Offerings of the country’s economic stability. Canada ranks first in the G7 for foreign direct investment to GDP ratio*, and has an established $62 AAA credit rating from Standard and Poor’s. $58 $58 $44 $55 Leveraging Canada's Economic Strength TSXV and TSX's significance as world-class equities markets is reflected in the broader strength of the Canadian economy. According to the Economist Intelligence Unit, Canada is the best country among the G7 to do business in from 2016-2020.** Canada’s economy is broadly diversified with key strengths in manufacturing, financial services and technology. This, coupled with 2013 2014 2015 2016 2017 Canada’s diverse natural resources base including oil and gas, coal, nickel, copper, zinc, uranium and diamonds, makes Canada a viable * Source: Invest in Canada: Think Canada, December 2017. destination to raise capital and leverage Canadian financial expertise. ** The Economist Intelligence Unit, January 2016. A Diverse Issuer Base 3,154 Total Number Of Listed Issuers By Sector On TSXV and TSX 1,211 569 527 415 309 138 Mining Diversified Industries Exchange Traded Technology Energy Closed-End Funds & Innovation Funds BREAKDOWN BREAKDOWN BREAKDOWN 51 68 Energy 37 Communications & Media 91 Clean Services 113 Consumer Products & Services Technology Capital Pool 215 Oil & Gas 139 Financial Services 144 Life Sciences Company 26 Utilities & 189 Industrial Products & Services 180 Technology Pipelines 91 Real Estate 2 SPAC All information as at December 31, 2017.
Going Public 11 Opportunities For Companies At Every Stage Of Growth TSXV and TSX are world-class markets that provide access to financing for companies at various stages of growth. Financing Growth Companies Public Equity CAPITAL REQUIRED Toronto Stock Exchange TSX Venture Exchange Private Capital Founders Angel Investors Venture Capitalists Private Equity Stable Project / Idea R&D Or Prototype Commercial Stage Production Stage Operating History STAGES OF COMPANY GROWTH Our Markets At A Glance TSXV TSX TSXV & TSX Listed Issuers 1,653 1,501 3,154 Quoted Market Value ($ Billions) 51 2,969 3,020 Median Quoted Market Value ($ Millions) 8 153 26 Average Quoted Market Value ($ Millions) 31 1,978 958 Total Equity Capital Raised ($ Billions) 6 48 55 Average Equity Capital Raised ($ Millions) 4 74 25 Going Public Activity* 143 153 296 * Includes Initial Public Offerings, Capital Pool Company IPOs, Reverse Takeovers, Qualifying Transactions, Qualifying Acquisitions and others. All information as at December 31, 2017.
Leave hindsight behind. " The TSX listing means a lot to Spin Master. It is a huge milestone in the evolution of our company's journey over the last 21 years and it's an incredible platform for continuing to grow our company. " _ Ronnen Harary Co-CEO of Spin Master Corp. (TSX: TOY)
Opportunities For International And U.S. Companies 13 Opportunities For International And U.S. Companies Gateway To North America Benefits international • Canadian capital markets operate within a stable, world-class financial services environment which 228 and U.S. includes a vibrant institutional and retail investor base. companies • Innovative capital market infrastructure, are listed on listing standards and vehicles, and proportionate governance tailored to public companies. TSXV and TSX • Extensive analyst community covering companies. • Access to North American and global capital. • Alternate going public options using the Capital With limited options in the international market for mid-market Pool Company® program (CPC), Special Purpose companies seeking growth capital, as well as the increasing Acquisition Corporations (SPACs) and an active costs of regulatory compliance, more and more international Reverse Merger Market. companies are using a listing on TSXV or TSX as a platform in order to reach Canadian and U.S. investors who can trade • Opportunity to interlist on a global market can directly in Canada. TSXV or TSX are uniquely positioned be an effective strategy for managed growth, while in North America and a significant part of the daily flow leveraging the liquidity of both the Canadian and of trading comes from U.S.-based investors. international marketplaces. International Listings By Country/Region U.S. Companies Listed Across All Sectors U.S. Africa Mining Closed-End Utilities & Communication 50% 3% 31% Funds Pipelines & Media 1% 2% 3% Other Real Estate 6% Life Sciences 3% 16% Financial Services Latin America 8% 3% Technology Consumer Products Australia /NZ/PNG 8% 14% & Services 3% Industrial Products & Asia UK/Europe Clean Technology Oil & Gas Services 13% 11% 10% 10% 4% 2017 Snapshot TSXV TSX TSXV & TSX Number of Listed Companies 127 101 228 Quoted Market Value ($ Billions) 5 99 104 New Listings in 2017 12 5 17 Equity Capital Raised ($ Millions) 412 5,244 5,656 Number of Financings 121 59 180 As at December 31, 2017.
14 Going Public Steps To Listing Step 1 Determine The Market For Your Business Listing On TSXV Listing On TSX Listing on TSX Venture Exchange is the right choice for Listing on Toronto Stock Exchange is the right choice small and early-stage companies looking to access public for growth-oriented companies with strong performance venture capital to facilitate their growth. Companies listed track records. TSX is globally recognized as a leading on TSXV are provided with the opportunity to gain a solid international stock exchange, known for its standards of foothold in the public market, with the potential to work fairness and innovative approach to trading. TSX provides towards graduation to TSX and access to larger pools of companies with a dynamic market in which to raise capital. TSXV has listing requirements that are tailored capital, while offering a range of benefits that include to a company’s industry sector, stage of development, enhanced liquidity, specialized indices, visibility and financial performance and operational resources. analyst coverage. Why List On TSXV? Why List On TSX? ccess to capital for early-stage companies and smaller A arket for established businesses and management M financings (typical financing range: $500,000 to $20 million). teams with experience in public markets. Extensive mentorship program for newly public companies. Access to international institutional investors. Streamlined graduation to TSX. Globally visible indices utilized by investors. ailored listing and corporate governance requirements T Corporate governance appropriate for established issuers. for small-cap companies. 160+ year history. ultiple financing rounds mean more ground-floor M investing opportunities. Respected, leading global exchange.
Going Public 15 Step 2 Determine The Method Of Listing A Flexible Approach TSX Venture Exchange and Toronto Stock Exchange have created a flexible approach to raising public capital. Recognizing that the financial requirements of companies are unique to their size and stage of growth, the process of going public on either of our Exchanges is efficient and cost-effective. Working with your advisors will help determine which listing method is right for your company in current market conditions. Structures For Going Public Initial Public Offering (IPO) TSXV Reverse Takeover/Reverse Merger (RTO/RM) Qualifying Transaction/Acquisition (QT/QA) TSX Direct Listing Initial Public Offering Qualifying Transaction/Qualifying Acquisition An IPO requires the completion of an application A CPC or a SPAC are companies listed with cash on their for listing and the filing of a prospectus with the balance sheets. They are designed as a pathway to take applicable Canadian securities commission(s). companies public in an efficient way. Reverse Takeover/Reverse Merger Direct Listing We have a long history of listing companies through If your company is currently listed on another exchange reverse merger transactions. A reverse merger or market, you may qualify for a direct listing on TSXV or TSX. allows a private company to vend into a TSXV- or It is an efficient mechanism to access a broader pool of TSX-listed company or shell. investors and to leverage your listing in another market.
16 Going Public Capital Pool Company® (CPC) Program A Two-Step Alternative To The Traditional IPO raised by The CPC program is a unique listing vehicle for small-cap companies. The program connects experienced investors with private companies by dividing the traditional IPO $7.2B former CPCs in the last five years on TSXV process in two: the creation of the CPC public vehicle shell and the Qualifying Transaction (QT). CPC Success Story Over 2,400 CPCs listed since program inception (1986). raised by 86% of CPCs have completed their QT, with 38 QTs in 2017. $18.4B former CPCs in the last five years on TSX 80 former CPCs currently trade on TSX. Outlining The CPC Process Seed financing of the Prospectus offering company (the greater to create a corporate CPC of $100,000 or 5% + vehicle with public of the total funds raised) distribution (maximum $4,750,000) New Public Qualifying Transaction CoincidingPrivate Placement (PIPE) An operating Company Private Company company is identified, disclosed, additionally financed (if appropriate) and acquired Special Purpose Acquisition Corporation (SPAC) Program The SPAC program offers an alternative vehicle for listing on TSX. Unlike a traditional IPO, the SPAC program enables seasoned directors and officers to form a corporation that contains no commercial operations or assets other than cash. The SPAC is then listed on TSX via an IPO, raising a minimum of $30 million. 90% of the funds raised are placed in escrow, and must then be used toward the acquisition of an operating company or assets within 36 months of listing, defined as a Qualifying Acquisition. As at December 31, 2017.
Going Public 17 Step 3 Select Your Team Of Advisors As a company looking to go public, you will need to build a team of expert advisors and seek the counsel of an investment dealer, a securities law firm, an auditor, an investor relations professional, and a transfer agent. Look for professionals experienced in your industry and size of company, with the ability to offer sound financial market advice that is relevant to you and your business. Make sure you have a thorough knowledge of the policies for the appropriate exchange and the securities law requirements. A quality investor relations program is critical to your company’s ability to access capital and liquidity, enhancing your company’s visibility, reputation and investor communications program. The Business Development team at TSX Venture Exchange and Toronto Stock Exchange can provide introductions to advisors who can help companies go public. Your Team Of Advisors International companies will need to seek advisors with experience in the Canadian marketplace. In Canada, regulatory and legal obligations are applicable at both the federal and provincial levels. Investment Dealer Securities Law Firm Your Company Auditor Investor Relations Professional Transfer Agent TSX Trust TSX Trust is a leading provider of transfer agency and corporate trust services, dedicated to serving clients with proven expertise, efficiency and professionalism. We’ve been a trusted advisor to more than 900 companies, both public and private. We work closely with our clients and their advisors to help navigate the most complex transactions, including the unique needs of SPACs, ETFs, Public and Private Partnerships, and Corporate Trust mandates. As part of the larger TMX Group of companies, TSX Trust is able to leverage leading technology and information security. We are a national business with four offices across Canada, allowing us to provide personalized, highly responsive service.
18 Going Public Graduation To Toronto Stock Exchange 645 20% graduates from TSXV to TSX* of the S&P/TSX in market Composite Index† $192B capitalization of TSXV graduates constituents are graduates of TSXV A Path To Greater Opportunity Benefits Graduating to TSX is a strategic opportunity for a company to increase its profile, liquidity Increased Access to Capital and access to capital. Graduation Made Easy Greater Visibility Streamlined Process our company’s TSXV files can be provided directly Y to TSX with your consent. Access to Institutional Capital Reduced Listing Fees he TSX application fee is waived for potential T graduates and credit will be given for any Enhanced Liquidity TSXV transaction fees paid in the 90 days prior to listing on TSX. Waiver Of Sponsorship ponsorship requirements can be waived S in most cases. Exchange Support pre-file meeting with TSX staff to review A process and timing can help to compress the timeline for a graduation. * From January 2000 to December 2017, 645 companies graduated from TSXV to TSX. † “S&P” is a trademark owned by Standard & Poor's Financial Services LLC, and "TSX" is a trademark owned by TSX Inc.
Going Public 19 Supporting Your Growth: TSX Company Services Your Designated Contact Celebrate And Promote Your Regional Head will connect with you leading up to Your Listing your listing. As your main point of contact, your Regional Around the time of your IPO or new listing, a Market Head is available to answer questions, provide support Open will be arranged for you to celebrate this exciting over the course of your corporate journey and will stay milestone. After opening the Canadian markets, your abreast of industry developments. CEO is offered the option to film a short video — The View from the C-Suite — to speak about your company. Communicate Your Corporate Messages Secure Communication We are proud to endorse Cision for your newswire Conducting business in a secure environment is and financial webcast services. With Cision, you can critical. Our TSX SecureFile and V-File online platforms achieve simultaneous distribution of news releases and can fully protect and encrypt your submissions and multimedia to media and financial markets, website communication with our Listings team. For your board feeds, as well as social media accounts and blogs. communication, we recommend Diligent's board platform with proven security and 24/7 customer support. Understand Your Shareholder Base And Trading Activity Reward Your Employees Many companies look to share their success with their Achieve both your investor relations and corporate goals employees through the implementation of an Employee with the help of TSX InfoSuite®. This comprehensive tool Share Plan or Stock Option Plan. Solium can provide provides a wide variety of data to track your company, you with a detailed overview of the many types of plans your peers, a wide variety of domestic and foreign available to suit your company’s needs and goals. investment vehicles, and shareholders. Build Effective Investor Relations Be Considered For Index Inclusion Being included in the S&P/TSX Composite Index, Ipreo is a leading global provider of financial services or another S&P/TSX index, can give your company technology, data and analytics, and can be an extension heightened exposure to domestic and global investors. of your Investor Relations team. Ipreo can provide you A variety of factors, including but not limited to company with cross-asset class surveillance, investor targeting, size and liquidity requirements, are prerequisites buy-side perception studies, transaction analysis and for eligibility. predictive analytics. Showcasing To Investors Learn More About Being A Public Company TMX runs the annual Venture 50™ program which ranks the top performers on TSX Venture Exchange over the Through the Learning Academy, our team of experts last year. The ranking is comprised of 10 companies host education sessions, online courses, and interactive from each of five industry sectors. We also host 10+ live workshops to help guide you through your journey sector-specific investor days showcasing a cross-section as a public company. of companies in domestic and foreign markets.
Let's get down to business. " This IPO is an important milestone for Aritzia and is a testament to the continued dedication and passion of our people. " _ Brian Hill Founder, Chairman & CEO of Aritzia Inc. (TSX: ATZ)
Sectors 21 Diversified Industries TSXV and TSX provide access to equity capital that is essential for growth-oriented companies from all around the world. Benefits companies Access To Capital 569 with a total In 2017, Diversified Industries companies raised market $23.1 billion of equity capital on TSXV and TSX. capitalization Liquidity & Trading of $1.8 trillion Diversified Industries companies in Canada continue to attract domestic and international investors. In 2017, 26.6 billion shares of Diversified Industries companies traded on our Exchanges. Growth Support Sector Breakdown TSXV-listed companies have the potential to graduate Industrial Products & Services Communications & Media to TSX as they grow and mature. 33% 7% Tailored Listing Criteria Listing requirements are tailored to companies Real Estate at varying stages of growth. 16% Global Visibility Diversified Industries companies listed on TSXV and Consumer Products TSX are covered by an average of two analysts and it is Financial Services & Services estimated that approximately 40% of all trading on TSXV 24% 20% and TSX originates outside of Canada. Listed Companies Total Market Capitalization ($ Millions) 2017 Sector Snapshot TSXV TSX TOTAL TSXV TSX TOTAL Communications & Media 11 26 37 894 191,408 192,302 Consumer Products & Services 42 71 113 877 236,005 236,882 Financial Services 56 83 139 5,635 890,165 895,800 Industrial Products & Services 57 132 189 1,726 352,091 353,818 Real Estate 29 62 91 2,354 100,046 102,400 As at December 31, 2017.
22 Sectors Technology & Innovation TSX Venture Exchange and Toronto Stock Exchange provide companies with dynamic markets to access North American and global capital. Proven Growth Markets Quoted Market Value ($ Billions) Over companies from startups 400 Clean Technology and Renewable Energy to global leaders Life Sciences Technology 187 188 188 IPOs and new Over 144 listings since 2015, from 100 Canadian, U.S. and global companies 2014 2015 2016 2017 Over raised since Equity Capital Raised 2015 to fund growth and $20B ($ Billions) provide liquidity 11.2 to investors 6.2 5.9 Over 5.6 of IPOs & new listings since 25% 2015 are from outside Canada 2014 2015 2016 2017 As at December 31, 2017.
Sectors 23 2017 Snapshot TSXV TSX TSXV & TSX Clean Technology and Renewable Energy Number of Listed Companies 56 35 91 Quoted Market Value ($ Billions) 1 42 43 New Listings in 2017 2 1 3 Equity Capital Raised ($ Millions) 60 1,756 1,816 Number of Financings 53 12 65 Life Sciences Number of Listed Companies 100 44 144 Quoted Market Value ($ Billions) 7 32 39 New Listings in 2017 21 6 27 Equity Capital Raised ($ Millions) 623 1,553 2,176 Number of Financings 99 58 157 Technology Number of Listed Companies 127 53 180 Quoted Market Value ($ Billions) 5 101 106 New Listings in 2017 8 2 10 Equity Capital Raised ($ Millions) 361 1,191 1,552 Number of Financings 104 20 124 Benefits Access To Capital Tailored Listing Criteria • $1.6 billion equity capital raised by Technology Listing requirements are tailored to companies companies in 2017 at varying stages of growth. • Over $1 billion equity capital raised by Clean Technology and Renewable Energy Growth Support companies for nine consecutive years TSXV-listed companies have the potential • $2.2 billion equity capital raised by Life Sciences to graduate to TSX as they grow and mature. companies in 2017 • 34% of Technology companies currently listed are graduates Global Visibility • 20% of Clean Technology and Renewable Energy Technology & Innovation companies listed on TSXV and companies currently listed are graduates TSX are covered by over 100 equity research analysts, • 50% of Life Sciences companies currently with an average of two analysts per company. It is listed are graduates estimated that approximately 40% of all trading on our Exchanges originates outside Canada. As at December 31, 2017.
24 Sectors Toronto Stock Exchange Listing Requirements for Industrial, Technology and Research & Development Companies TSX NON-EXEMPT RESEARCH AND TSX NON-EXEMPT TSX EXEMPT MINIMUM LISTING TSX NON-EXEMPT DEVELOPMENT FORECASTING TSX NON-EXEMPT INDUSTRIAL REQUIREMENTS TECHNOLOGY ISSUERS1, 7 (R&D) ISSUERS7 PROFITABILITY7 PROFITABLE ISSUERS7 COMPANIES8 Earnings or Evidence of pre-tax Pre-tax earnings from Pre-tax earnings from earnings from on-going on-going operations on-going operations Revenue operations for the current of at least $200,000 in of at least $300,000 in or next fiscal year of at the last fiscal year. the last fiscal year. least $200,000.2 Cash Flow Evidence of pre-tax Pre-tax cash flow Pre-tax cash flow of cash flow from on-going of $500,000 in the last $700,000 in the last fiscal operations for the current fiscal year. year, and an average or next fiscal year of at pre-tax cash flow least $500,000.2 of $500,000 for the past two fiscal years. Net Tangible $7,500,0003 $2,000,0003, 4 $7,500,0003 Assets Adequate Funds to cover all Funds to cover all planned Working capital to carry on the business, and an appropriate capital structure. planned development R&D expenditures, capital Working Capital expenditures, capital expenditures and G&A5 expenditures, and G&A5 expenses for two years.6 and Capital expenses for one year.6 Structure Cash in Treasury Minimum $10,000,000 in Minimum $12,000,000 in the treasury, the majority the treasury, the majority of which has been raised of which has been raised by the issuance of by the issuance of securities qualified securities qualified for distribution for distribution by a prospectus. by a prospectus. Products Evidence that products or Minimum two year services at an advanced operating history that and Services stage of development or includes R&D activities. commercialization and Evidence of technical that management has the expertise and resources expertise and resources to to advance its research develop the business.9 and development programme(s).10 Management Management, including the board of directors, should have adequate experience and technical expertise relevant to the company’s business and industry as well as adequate public company experience. Companies are required to have at least two independent directors. and Board of Directors Public Minimum 1,000,000 free Minimum 1,000,000 free trading public shares. trading public shares. Distribution Minimum $4,000,000 held by public shareholders. Minimum $10,000,000 held and Market by public shareholders. 300 public shareholders each holding a board lot or more. Capitalization 300 public shareholders each holding a board lot. Minimum $50,000,000 market capitalization. Sponsorship Generally required. Not required. The listing requirements above must be met at the time of listing. Any funds raised or transactions closing concurrent with listing contribute to the company meeting the listing requirements. (1) Generally includes companies engaged in hardware, software, telecommunications, data communications, information technology and new technologies that are not currently profitable or able to forecast profitability. (2) Applicants should file a complete set of forecast financial statements covering the current and/or next fiscal year (on a quarterly basis). Forecasts must be accompanied by an independent auditor’s opinion that the forecast complies with the CICA Auditing Standards for future-oriented financial information. Applicants should have at least six months of operating history. (3) Under certain circumstances, deferred development charges or other intangible assets can be included in net tangible asset calculations. (4) Companies with less than $2 million in net tangible assets may qualify for listing if the earnings and cash flow requirements for senior companies are met. (5) “G&A” means general and administration expenses. (6) A quarterly projection of sources and uses of funds, for the relevant period, including related assumptions signed by the CFO must be submitted. Projection should exclude uncommitted payments from third parties or other contingent cash receipts. R&D issuers should exclude cash flows from future revenues. (7) Exceptional circumstances may justify granting of a listing, notwithstanding minimum requirements – generally an affiliation with established business and/or exceptionally strong financial position is required. (8) (7), as well as for granting Exempt status. Special purpose issuers are generally considered on an exceptional basis. (9) “Advanced stage of development or commercialization,” generally restricted to historical revenues from the issuer’s current business or contracts for future sales. Other factors may also be considered. (10) Other relevant factors may also be considered. The foregoing is a summary of the applicable listing requirements only. For detailed listing requirements, refer to the TSX Company Manual which is available at www.tsx.com.
Sectors 25 TSX Venture Exchange Listing Requirements for Industrial, Technology, Life Sciences and Real Estate Companies TSXV TIER 1 TSXV TIER 2 TSXV TIER 1 TSXV TIER 2 INITIAL LISTING INDUSTRIAL TECHNOLOGY INDUSTRIAL TECHNOLOGY REAL ESTATE OR REAL ESTATE OR REQUIREMENTS LIFE SCIENCES LIFE SCIENCES INVESTMENT INVESTMENT Net Tangible Assets, $5,000,000 net tangible assets $750,000 net tangible assets Real Estate: $2,000,000 net tangible assets or $5,000,000 revenue. or $500,000 in revenue or $5,000,000 net tangible assets. or $3,000,000 Arm’s Length Revenue or Arm’s $2,000,000 Arm’s Length Financing. If no revenue, two-year Financing. Investment: Length Financing management plan $10,000,000 net tangible assets. (as applicable) demonstrating reasonable likelihood of revenue within If no revenue, two-year management plan 24 months. demonstrating reasonable likelihood of revenue within 24 months. Adequate Working Adequate working capital and Adequate working capital and Adequate working capital and Adequate working capital and financial resources to carry out financial resources to carry out financial resources to carry out financial resources to carry out Capital and Capital stated work program or execute stated work program or execute stated work program or execute stated work program or execute business plan for 18 months business plan for 12 months business plan for 18 months business plan for 12 months Structure following listing; $200,000 following listing; $100,000 following listing; $200,000 following listing; $100,000 unallocated funds. unallocated funds. unallocated funds. unallocated funds. Property Issuer has significant interest in business or primary asset used to Real Estate: carry on business. Issuer has significant interest in real property. Investment: No requirement. Prior Expenditures History of operations or validation of business. Real Estate: Real Estate: No requirement. No requirement. and Work Program Investment: Investment: Disclosed investment policy. (i) disclosed investment policy and (ii) 50% of available funds must be allocated to at least two specific investments. Management and Management, including board of directors, should have adequate experience and technical expertise relevant to the company’s business and industry as well as adequate public company experience in Canada or a similar jurisdiction. Companies are required to have at least Board of Directors two independent directors. Distribution, Market Public float of 1,000,000 shares; Public float of 500,000 shares; Public float of 1,000,000 shares; Public float of 500,000 shares; 250 Public Shareholders each 200 Public Shareholders each 250 Public Shareholders each 200 Public Shareholders each Capitalization and holding a Board Lot and having holding a Board Lot and having holding a Board Lot and having holding a Board Lot and having no Resale Restrictions on their no Resale Restrictions on their no Resale Restrictions on their no Resale Restrictions on their Public Float shares; 20% of issued and shares; 20% of issued and shares; 20% of issued and shares; 20% of issued and outstanding shares in the hands outstanding shares in the hands outstanding shares in the hands outstanding shares in the hands of Public Shareholders. of Public Shareholders. of Public Shareholders. of Public Shareholders. Sponsorship Sponsor Report may be required. The foregoing is a summary of the applicable listing requirements only. For detailed listing requirements, refer to the TSX Venture Exchange Corporate Finance Manual which is available at www.tsx.com.
26 Sectors Mining TSXV and TSX are home to more Mining companies than any other market in the world, and have a diversified roster of public Mining companies by commodity and stage of development. These companies benefit by having greater access to capital, visibility of transactions, analyst coverage, specialized indices and tailored listing requirements for all sizes of companies. Benefits of the world’s Access To Capital ~50% public mining Mining companies on TSXV and TSX raised $8.5 billion companies are in 2017 through 1,413 transactions. This represents 59% of the number of public mining financings completed listed on TSXV and 30% of the mining equity capital raised, globally. and TSX Liquidity & Trading Almost 56 billion Mining company shares were traded on our Exchanges in 2017. #1 In Global Mining Equity Financings In 2017 Global Visibility ($ Billions) More than 200 global analysts cover TSXV and TSX listed $8.5 Mining companies and it is estimated that approximately 40% of all trading originates outside of Canada. Growth Support $5.4 TSXV-listed companies have the potential to graduate $4.4 to TSX as they grow and mature. From 2000 to 2017, 282 Mining companies graduated from TSXV to TSX. $3.1 Tailored Listing Criteria $0.9 $1.2 Listing requirements are tailored to companies at $0.7 varying levels and accommodate a range of companies from exploration stage to production. SZSE LSE/AIM SHSE NYSE/NYSE HKEx ASX TSXV/TSX Experienced Exchange Staff American Relevant mining business experience Source: TSX and TSXV Market Intelligence Group and S&P Capital IQ, December 31, 2017. and in-house geologists. Global Mining Companies — Global Reach Nearly 50% of the 5,700+ mineral exploration projects held by TSXV and TSX companies are outside of Canada Canada UK/Europe TSX: 83 Companies TSX: 39 Companies TSXV: 462 Companies TSXV: 63 Companies U.S. Russia & CIS TSX: 62 Companies TSX: 7 Companies TSXV: 165 Companies TSXV: 5 Companies Mexico Asia TSX: 34 Companies TSX: 35 Companies TSXV: 74 Companies TSXV: 42 Companies Central America Middle & Caribbean South America Africa East Australia/NZ/PNG TSX: 11 Companies TSX: 83 Companies TSX: 63 Companies TSX: 2 Companies TSX: 21 Companies TSXV: 15 Companies TSXV: 117 Companies TSXV: 74 Companies TSXV: 3 Companies TSXV: 17 Companies Note: A single company may have projects in multiple countries. Source: S&P Market Intelligence, January 2018. As at December 31, 2017, unless otherwise noted.
Sectors 27 Toronto Stock Exchange TSX Venture Exchange Listing Requirements for Mining Companies TSX NON-EXEMPT EXPLORATION AND TSX NON-EXEMPT TSX EXEMPT TSXV TIER 1 TSXV TIER 2 DEVELOPMENT STAGE PRODUCER Property Advanced Property At least three years At least three years Material interest in Significant interest5 in detailed in report proven and probable proven and probable a Tier 1 property.4 a qualifying property or, Requirements prepared by an reserves as calculated reserves as estimated at discretion of TSXV, a independent qualified by an independent by an independent right to earn a significant person. Minimum qualified person qualified person. interest5 in a qualifying 50% ownership (if not in production, property. Sufficient of property.3 a production decision evidence of no less than made). $100,000 of exploration expenditures on the qualifying property in the past three years. Recommended $750,000 on advanced Bringing the mine into Commercial level mining $500,000 on the $100,000 of Approved exploration property2 commercial production. operations. Tier 1 property4 as Expenditures on the Work Program as recommended in a recommended by qualifying property technical report6 prepared geological report.6 within 36 months period by an independent preceding application qualified person. of listing; $200,000 on the qualifying property as recommended in a geological report. Working Capital Minimum $2,000,000 Sufficient funds to Adequate working capital Adequate working Adequate working working capital and bring the mine into to carry on the business. capital and financial capital and financial and Financial appropriate capital commercial production; Appropriate capital resources to carry out resources to carry out structure. Sufficient funds plus adequate working structure. stated work program stated work program Resources to complete planned capital for all budgeted or execute business plan or execute business plan programme meeting G&A1 capital expenditures and for 18 months following for 12 months following costs, property payments to carry on the business. listing; $200,000 in listing; $100,000 in and capital expenditures Appropriate capital unallocated funds. unallocated funds. for 18 months. structure. Net Tangible $3,000,000 net tangible $4,000,000 net tangible $7,500,000 net tangible $2,000,000 net tangible No requirement. assets. assets; evidence indicating assets; pre-tax profitability assets. Assets, Earnings a reasonable likelihood from ongoing operations of future profitability in last fiscal year; pre-tax or Revenue supported by a feasibility cash flow of $700,000 study or documented in last fiscal year and historical production and average pre-tax cash flow financial performance. of $500,000 for past two fiscal years. Other Criteria Management-prepared 18 month projection (by quarter Up-to-date, Geological report6 recommending completion of sources and uses of funds detailing all expenditures comprehensive technical of work program. and signed by CFO. report6 prepared by independent qualified person. Management Management, including board of directors, should have adequate experience and technical expertise relevant to the company’s mining projects as well as adequate public company experience. Companies are required to have at least two independent directors. and Board of Directors Distribution, Minimum 1,000,000 freely tradeable shares with market value of $4,000,000 Public float of 1,000,000 Public float of 500,000 held by at least 300 public holders, each with one board lot or more. shares; 250 public shares; 200 public Market shareholders each shareholders each holding holding a board lot a board lot and having no Capitalization and having no resale resale restrictions on their and Public Float restrictions on their shares; 20% of issued shares; 20% of issued and outstanding shares and outstanding shares in the hands of public in the hands of public shareholders. shareholders. Sponsorship Required (may be waived if sufficient previous third Not required. Sponsor report may be required. party due diligence). (1) “G&A” means general and administrative expenses. (5) “significant interest” means at least 50% interest. (2) TSX will consider a property to be sufficiently advanced if continuity of mineralization (6) “geological report” or “technical report”, in the case of a mining property, is a report is demonstrated in three dimensions at economically interesting grades. prepared in accordance with National Instrument 43-101* – Standards of Disclosure (3) A company must hold or have the right to earn and maintain at least a 50% interest in for Mineral Projects or any successor instrument. the property. Companies holding less than a 50% interest will be considered on a case-by-case basis looking at program size stage of advancement of the property and strategic alliances. *Mining Disclosure Standards (4) “Tier 1 property” means a property that has substantial geological merit and is: National Instrument 43-101 is the Canadian Securities Administrators’ policy that governs (a) a property in which the Issuer holds a material interest; the scientific and technical disclosure for mineral projects made by mineral exploration and (b) a property on which previous exploration, including detailed surface geological, geophysical mining companies, including the preparation of technical reports. The instrument covers oral and/or geochemical surveying and at least an initial phase of drilling or other detailed statements as well as written documents and websites. NI 43-101 requires that all technical sampling (such as trench or underground opening sampling), has been completed; disclosure be prepared by or under the supervision of a “qualified person.” Issuers are required to make disclosure of reserves and resources using definitions approved by the Canadian (c) a property that has, at a minimum, a current inferred mineral resource; and Institute of Mining, Metallurgy and Petroleum. National Instrument 43-101 is available at: (d) an independent geological report recommends a minimum $500,000 Phase 1 drilling www.osc.gov.on.ca/en/15019.htm (or other form of detailed sampling) program based on the merits of previous exploration results; or an independent, positive feasibility study demonstrates that the property is capable of generating positive cash flow from ongoing operations. The foregoing is a summary of the applicable listing requirements only. For detailed listing requirements, refer to the TSX Venture Exchange Corporate Finance Manual and the TSX Company Manual, both of which are available at www.tsx.com
28 Sectors Energy TSXV and TSX are a global leader in the Energy sector, comprised of Oil & Gas, Energy Services and Utilities & Pipelines. Benefits listed Energy Access to Capital 308 companies with $18.1 billion was raised in 2017 by Energy companies a total market listed on TSXV and TSX. capitalization Liquidity & Trading of $602 billion 23 billion Energy company shares were traded on our Exchanges in 2017. Global Visibility An average of four analysts cover TSXV and TSX Oil & Gas World’s Largest Oil & Gas Public Market and Energy Services companies and an average of nine Number of listed Oil & Gas companies cover Utilities & Pipelines companies. 215 Growth Support TSXV-listed companies have the opportunity to graduate to TSX as they grow and mature. 127 120 121 Tailored Listing Criteria Listing requirements are tailored to companies at varying levels and better accommodate junior companies including exploration-stage companies. 21 31 Experienced Exchange Staff Relevant oil and gas business experience, including in-house geologists. HKEx NASDAQ LSE/AIM ASX NYSE/NYSE TSXV/TSX American Source: S&P Capital IQ, as at December 31, 2017. TSXV and TSX Oil & Gas Issuers with Global Operations Number of companies with Oil and Gas assets located around the world Canada UK/Europe TSX: 62 Companies TSX: 9 Companies TSXV: 72 Companies TSXV: 11 Companies U.S. Russia & CIS TSX: 13 Companies TSX: 2 Companies TSXV: 29 Companies TSXV: 3 Companies Asia TSX: 5 Companies TSXV: 7 Companies Middle Latin America Africa East Australia/NZ/PNG TSX: 7 Companies TSX: 7 Companies TSX: 2 Companies TSX: 3 Companies TSXV: 11 Companies TSXV: 13 Companies TSXV: 2 Companies TSXV: 7 Companies Note: A single company may have operations or assets in multiple countries. Source: TSX and TSXV Market Intelligence Group. As at December 31, 2017.
Sectors 29 Toronto Stock Exchange Listing Requirements for Oil and Gas (Exploration or Producing) Companies TSX NON-EXEMPT OIL AND GAS TSX NON-EXEMPT OIL AND GAS TSX EXEMPT OIL AND GAS DEVELOPMENT STAGE ISSUERS9 PRODUCING ISSUERS ISSUERS4 Net Tangible Assets, No requirements. Pre-tax profitability from ongoing operations in last fiscal year. Pre-tax Earnings or Revenue cash flow from ongoing operations of $700,000 in last fiscal year and average pre-tax cash flow from ongoing operations of $500,000 for the past two fiscal years. Working Capital and Adequate funds to either: Adequate funds to execute the program Adequate working capital to carry on the and cover all other capital expenditures business. Appropriate capital structure. Financial Resources (a) execute the development plan and cover and G&A1 and debt service expenses for all other capital expenditures & G&A1 and 18 months with a contingency allowance; debt service expenses, for 18 months with 18 month projection of sources and uses a contingency allowance; of funds signed by CFO; appropriate capital structure. OR (b) bring the property into commercial production, and adequate working capital to fund all budgeted capital expenditures and carry on the business. 18 month projection of sources and uses of funds signed by CFO;6 appropriate capital structure. Distribution, Market At least 1,000,000 freely tradable shares At least 1,000,000 freely tradable shares with an aggregate market value of $4,000,000; with an aggregate market value of minimum 300 public holders, each with one board lot or more. Capitalization and $4,000,000; minimum 300 public holders, each with one board lot or more. Public Float Minimum market value of the issued securities that are to be listed of at least $200,000,000. Sponsorship Sponsor report may be required (generally not required for IPOs Not required. or TSXV Graduates) Property Contingent resources7 of $500,000,000.8 $3,000,000 proved developed reserves.2, 5 $7,500,000 proved developed reserves.2, 5 Requirements Recommended Work Clearly defined development plan, Clearly defined program satisfactory to TSX, which can reasonably to increase reserves. Program be expected to advance the property. Management and Management, including the board of directors, should have adequate experience and technical expertise relevant to the company’s oil and gas projects as well as adequate public company experience. Companies are required to have at least two independent directors. Board of Directors Other Criteria Up-to-date technical report prepared by an independent technical consultant (NI 51-1013). (1) “G&A” means general and administrative expenses. (2) “Proved developed reserves” are defined as those reserves that are expected to be recovered from existing wells and installed facilities, or, if facilities have not been installed, that would involve low expenditure, when compared to the cost of drilling a well, to put the reserves on production. (3) “NI 51-101” means National Instrument 51-101 – Standards of Disclosure for Oil & Gas Activities – available at: http://www.osc.gov.on.ca/ (4) Exceptional circumstances may justify the granting of Exempt status notwithstanding the minimum requirements – generally an affiliation with an established business and/or exceptionally strong financial position is required. (5) Reserve value of pre-tax net present value of future cash flows using a 10% discount rate: forecast pricing assumptions are used. (6) This projection must also include actual financial results for the most recently completed quarter. (7) “Contingent resources” are defined in accordance with Canadian Oil and Gas Evaluation Handbook and NI 51-101; however, TSX in its discretion may exclude certain resources classified as contingent resources after taking into consideration the nature of the contingency. TSX will use the best-case estimate for contingent resources, prepared in accordance with NI 51-101. (8) The Company must submit a technical report prepared by an independent technical consultant that conforms to National Instrument 51-101 and be acceptable to TSX. Reports prepared in conformity with other reporting systems deemed by TSX to be the equivalent of NI 51-101 will normally be acceptable also. The value of the resources should be calculated as the best-case estimate of the net present value of future cash flows before income taxes, prepared on a forecast basis, and discounted at a rate of 10%. TSX may, at its discretion, also require the provision of a price sensitivity analysis. (9) TSX strongly recommends pre-consultation with TSX for any applicant applying under this listing category. Generally, this category will be limited to issuers with unconventional oil and gas assets, such as oil sands. The foregoing is a summary of the applicable listing requirements only. For detailed listing requirements, refer to the TSX Company Manual which is available at www.tsx.com
30 Sectors TSX Venture Exchange Listing Requirements for Oil and Gas (Exploration or Producing) Companies TSXV TIER 1 TSXV TIER 2 Net Tangible Assets, No requirements. Earnings or Revenue Working Capital and Adequate working capital and financial resources to carry out Adequate working capital and financial resources to carry out stated work program or execute business plan for 18 months. stated work program or execute business plan for 12 months. Financial Resources following listing; $200,000 unallocated funds. following listing; $100,000 unallocated funds. Distribution, Market Public float of 1,000,000 shares; 250 Public Shareholders each Public float of 500,000 shares; 200 Public Shareholders each holding a Board Lot and having no Resale Restrictions on their holding a Board Lot and having no Resale Restrictions on their Capitalization and shares; 20% of issued and outstanding shares in the hands of shares; 20% of issued and outstanding shares in the hands of Public Shareholders. Public Shareholders. Public Float Sponsorship Sponsor report may be required. Property Exploration – $3,000,000 in reserves of which a minimum Exploration – either (i) Issuer has an unproven property with of $1,000,000 must be proved developed reserves1 and prospects or (ii) Issuer has joint venture interest and $5,000,000 Requirements the balance probable reserves. raised by Prospectus offering. Producing – $2,000,000 in proved developed reserves.1 Reserves – either (i) $500,000 in proved developed producing reserves or (ii) $750,000 in proved plus probable reserves. Recommended Exploration – satisfactory work program (i) of no less than Exploration – minimum of $1,500,000 allocated by issuer to a work $500,000 and (ii) which can reasonably be expected to increase program as recommended in a Geological Report except were Work Program reserves, as recommended in a Geological Report. Issuer has a joint venture interest and has raised $5,000,000 in Prospectus offering. Producing – No requirement. Reserves – (i) satisfactory work program and (ii) in an amount no less than $300,000 if proved developed producing reserves have a value of less than $500,000 as recommended in Geological Report. Management and Management, including board of directors, should have adequate experience and technical expertise relevant to the company’s business and industry as well as adequate public company experience in Canada or a similar jurisdiction. Companies are required to have at least Board of Directors two independent directors. Other Criteria Geological Report recommending completion of work program. (1) “Proved developed reserves” are defined as those reserves that are expected to be recovered from existing wells and installed facilities, or, if facilities have not been installed, that would involve low expenditure, when compared to the cost of drilling a well, to put the reserves on production. The foregoing is a summary of the applicable listing requirements only. For detailed listing requirements, refer to the TSX Venture Exchange Corporate Finance Manual which is available at www.tsx.com
Directory Of Contacts Business Development International Inquiries To inquire about listing on TSX Venture Exchange or Asia Toronto Stock Exchange, please contact a member firstname.lastname@example.org of our Business Development team from the appropriate sector category: Europe, Middle East, Africa email@example.com Diversified Industries T: 416 947-4710 Israel firstname.lastname@example.org email@example.com Technology & Innovation United States T: 416 947-6626 firstname.lastname@example.org email@example.com Energy T: 403 218-2805 firstname.lastname@example.org Relationship Management If you are an issuer on TSX Venture Exchange Mining or Toronto Stock Exchange, please contact your T: 416 947-4477 designated Regional Head - TSX Company Services email@example.com with any questions regarding your listing or products and services available for you. Exchange Traded Funds T: 416 814-8874 firstname.lastname@example.org Other Listing Guides Technical Guide to Listing To access the wealth of information these Listing Guides Legal & Tax Guide for U.S. Companies have to offer, please visit: tsx.com/listings/listing-with-us/listing-guides Dual-Listing Guide Follow us: @tsx_tsxv @tmxgroup tmx.com ©2018 TSX Inc. All rights reserved. All monetary references in this document are in Canadian dollars. All numbers (including dollar amounts and percentages) are approximates. This document, and certain of the information contained in this document, is TSX Inc.’s proprietary information. Do not disclose, copy, distribute, sell or modify this document or any of its contents without TSX Inc.’s prior written consent. Neither TMX Group Limited nor any of its affiliates represents, warrants or guarantees the completeness or accuracy of the information contained in this document and they are not responsible for any errors or omissions in or your use of, or reliance on, the information. This information is provided with the express condition, to which by making use thereof you expressly consent, that no liability shall be incurred by TMX Group Limited and/or any of its affiliates as a result of any errors or omissions herein or any use or reliance upon this information. The information contained in this document is subject to change without notice. Neither TMX Group Limited nor any of its affiliates endorse or recommend any securities or issuer referenced in this document. This document contains historical information, and may contain information about possible future events. Historical information may not be indicative of future events, and forward-looking information is subject to risks and uncertainties. This document does not, nor should it be construed as, providing any trading, legal, accounting, tax, investment, business, financial or other advice, and you should not rely on it for such purposes. Professional advisors should be consulted. This document is not, and should not be construed as, an invitation to purchase securities listed on Toronto Stock Exchange or TSX Venture Exchange. Listing on Toronto Stock Exchange or TSX Venture Exchange does not guarantee the future performance of a security or an issuer. Capital Pool Company, CPC, Infosuite, TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, TSX Trust, TSX Venture Exchange, TSXV and Venture 50 are the trademarks of TSX Inc. Not a securities marketplace. “S&P” is a trademark owned by Standard & Poor’s Financial Services LLC, and “TSX” is a trademark owned by TSX Inc. All other trademarks herein are the property of their respective owners.
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