TSX Venture Exchange (TSXV)

For Early-Stage, Growth-Oriented Companies

1. Overview of the TSXV

The TSX Venture Exchange (TSXV) is Canada’s premier marketplace for early-stage public companies. Operated by the TMX Group, the TSXV offers a flexible and accessible entry point to the public markets for growth-stage businesses in sectors such as mining, energy, technology, life sciences, and diversified industries.

2. Two-Tier Structure

The TSXV categorizes issuers into two tiers based on financial and operational maturity:

• Tier 1

  For more advanced companies with stronger financials and operational history. Offers less restrictive escrow and financing rules.

• Tier 2

  Designed for early-stage companies. Provides more flexible listing requirements but with tighter restrictions on use of proceeds and insider escrow.

3. TSXV Listing Requirements

General Criteria

• Minimum number of public shareholders: 200.
• Minimum public float: 1 million shares with a float value of $500,000 or more.
• Minimum 20% of issued and outstanding shares must be held by public shareholders.
• Directors and officers must have relevant experience and no regulatory sanctions.

Tier 1 Financial Requirements

• Net tangible assets of at least $5 million, or pre-tax earnings of $750,000 in the past fiscal year and most recent quarter.
• Adequate working capital and financial resources to carry out the business plan for 18 months, including general and administrative expenses.

Tier 2 Financial Requirements

• No minimum revenue or earnings required.
• Must have sufficient funds to carry out business objectives for 12 months, including G&A.
• Minimum $100,000 in working capital at the time of listing.

4. Listing Process

Filing Methods

• Filing Statement (Form 2B) for non-offering listings.
• Prospectus for offering-based listings.
• Qualifying Transaction (QT) under the Capital Pool Company (CPC) program.

Escrow Requirements

• Tier 1 issuers often benefit from reduced escrow terms.
• Tier 2 issuers follow standard escrow under National Policy 46-201, often 36 months for principals.

5. TSXV Listing Fees

• Initial listing fee ranges from $10,000 to $70,000 depending on financing amount and listing type.
• Annual sustaining fees typically range from $6,000 to $20,000 based on market capitalization.
• Additional fees may apply for supplemental listings, share changes, or corporate actions.

6. Special Programs

Capital Pool Company (CPC) Program

• Provides a fast-track go-public option without a traditional operating business.
• Two-stage process: raise seed funds, then acquire a qualifying business via a QT.
• Popular for startups and pre-revenue companies seeking early public access.

Graduation to TSX

• TSXV-listed companies may apply to graduate to the TSX once they meet senior listing criteria.
• Graduation process includes new application, updated financials, governance upgrades, and board approval.
• No prospectus typically required if the company is a reporting issuer in good standing.

Summary

The TSX Venture Exchange is ideal for emerging companies that need public capital but are not yet eligible for a senior board. With flexible entry points, two listing tiers, and access to the CPC program, the TSXV serves as both a launchpad and a stepping stone to the TSX.