Daniel rothberg listing methods legal requirements and learning

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1. Listing Methods, Legal Requirements and Learning from Experience Daniel A. Rothberg 416.595.8632 drothberg@millerthomson.com 2. Introduction / Background ã…
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  • 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
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