1. Listing Methods, Legal
Requirements and Learning from
Experience
Daniel A. Rothberg
416.595.8632
drothberg@millerthomson.com

2. Introduction / Background
• Background / Israel experience
• Why focus on the TSX Venture
Exchange?

3. Four Listing Methods for the
TSX Venture Exchange
1. IPO
2. Direct Listing
3. Reverse Take-over
4. Capital Pool Company (CPC)

4. TSX Venture Exchange Listing
Requirements
Three Main Categories:
• Financial Requirements
• Distribution Requirements
• Management Requirements

5. Financial Requirements
• Must have raised enough capital to
satisfy the applicable “financial tests”
• Generally, enough capital to completely
run the business for a year or more
• Specific requirements differ based on
category / industry of company

6. Distribution Requirements
• At least 200 “public shareholders”
holding at least one “board lot” of free
trading shares
• At least 500,000 free trading shares,
representing at least 20% of the
company’s total issued shares, held by
“public shareholders”

7. Management Requirements
• At least 3 directors - 2 of which are
“independent”
• Chief Executive Officer
• Chief Financial Officer
• Corporate Secretary

8. Management Requirements (cont’d)
• Collectively possess adequate
experience and technical expertise
relevant to the company’s business and
industry
• Collectively possess adequate public
company experience in Canada or a
similar jurisdiction

9. Advantages of CPC Program vs.
Traditional IPO
• takes the Distribution Requirements out of
the equation
• assists with meeting Management
Requirements
• assists with meeting Financial
Requirements
• quicker and cheaper for the target business

10. CPC – Two stages
1. Formation of CPC
2. The Qualifying Transaction

11. The Qualifying Transaction –
Typically Two Parts:
1. CPC company acquires a target
business (2 typical structures)
2. Concurrent financing – large enough so
the company will be able to satisfy the
“Financial Requirements”

12. Unique Issues for Israeli
Companies
• Taxation of Qualifying Transaction on
Israeli shareholders
• Taxation of stock options held by Israelis
• Office of the Chief Scientist
• Consortium Participation

13. Ongoing Corporate Governance
Requirements
• Audit committees (qualitative requirements)
• Nominating committees
• Compensation committees
• Disclosure controls and procedures
• Internal controls over financial reporting
Need to develop written
policies for each

14. Ongoing Disclosure Obligations
• Disclosure requirements of certain
policies
• Financial statements / MD&A
• Proxies and information circulars /
disclosure of executive compensation
• Timely disclosure / material change
reports

15. Some Take-Away Tips:
• Start to “act” like a public company now
• Get your financial statements in order
• Have a well written business plan
complete with budgeted expenditures
• Get your “house” in order (organization,
structure, employment agreements, etc.)

16. Thank You