Private Placements – Lapsing of Temporary Relief
On August 17, 2012, the TSX V implemented, on a temporary basis, relief from certain existing pricing requirements related to Private Placement financings. The three temporary measures (“Relief Measures”) are as follows:
- Allowing a share/unit offering with an offering price below $0.05.
- Allowing a debenture offering with a debenture conversion price below $0.10
- Allowing offerings involving a warrant with an exercise price below $0.10.
The Relief Measures are set to expire on August 31, 2013. The TSX V will not be extending the Relief Measures and they will therefore lapse on August 31, 2013.
Proposed Pricing and Share Consolidation Amendments
The TSX V has received regulatory approval for the following amendments which are expected to come into effect sometime in the near future:
Minimum Price for Warrants and Options: The minimum allowable exercise price for share purchase warrants and incentive stock options will be reduced from $0.10 to $0.05 per share. This will apply to the full term of the warrant or option.
Minimum Price for Convertible Debentures: The minimum allowable conversion price for debentures will be reduced from $0.10 to $0.05 per share for the first year of the term of the debenture. It will remain at $0.10 per share for the balance of the term of the debenture.
Minimum Price for Initial Public Offerings: The minimum allowable offering price for a non-Capital Pool Company initial public offering will be reduced from $0.15 to $0.10 per security.
Shareholder Approval for Share Consolidations:
The TSX V will only require shareholder approval for a share consolidation which, when combined with any other share consolidation conducted by the Issuer within the previous 24 months that was not approved by the Issuer’s shareholders, would result in a cumulative consolidation of greater than 10 to 1 over such 24 month period. It should be noted that an Issuer may still be subject to shareholder approval requirements under applicable corporate laws.
Although these amendments are not currently in force and will not be until such time as the specific policy amendments are formally implemented, the TSX V has indicated that they will, in the interim, consider allowing Issuers to rely upon the intended changes to the existing policy requirements.
Rescission of Deal Structure and Founder Shares Guidelines
Effective immediately, the TSX V rescinded its Bulletins/Notices to Issuers dated December 11, 2007 and October 20, 2008 related to Deal Structure and Founder Shares Guidelines (collectively, the “Capital Structure Guidelines”). Rescinding the Capital Structure Guidelines will have the principal effect of removing the existing 15% limit on “Founder Shares” prescribed by the Capital Structure Guidelines in respect of any New Listing.