TSE Listing Requirements: I think the company has no trouble meeting them, especially if they continue with their aggressive aquisition strategy...
MINIMUM LISTING REQUIREMENTS FOR INDUSTRIAL COMPANIES
Sec. 309 Requirements for Eligibility for Listing subject to Section 19.09¹ of the Exchange's General By-law
309(a) Profitable Companies
net tangible assets² of $2,000,000 ³;
earnings from on-going operations of at least $200,000 before taxes and extraordinary items in the fiscal year immediately preceding the filing of the listing application;
pre-tax cash flow of $500,000 in the fiscal year immediately preceding the filing of the listing application; and
adequate working capital and an appropriate capital structure.
OR
309(b) Companies Forecasting Profitability
net tangible assets of $7,500,000²;
evidence, satisfactory to the Exchange, of earnings from operations for the current or next fiscal year of at least $200,000 before taxes and extraordinary items4;
evidence, satisfactory to the Exchange, of pre-tax cash flow for the current or next fiscal year of at least $500,000 4; and
adequate working capital and an appropriate capital structure.
OR
309(c) Research and Development Companies
a minimum of $12,000,000 in the treasury, the majority of which has been raised by the issuance of securities qualified for distribution by a prospectus;
adequate funds to cover all planned research and development expenditures, general and administrative expenses, and capital expenditures for a period of at least 2 years. A projection of sources and uses of funds covering the period (by quarter) must be submitted5;
a minimum two year operating history that includes research and development activities; and
evidence, satisfactory to the Exchange, that the company has the technical expertise and resources to advance the company's research and development programme(s)6.
Sec. 309.1 Requirements for Eligibility for Listing exempt from Section 19.09¹ of the Exchange's General By-law.
net tangible assets of $7,500,000²;
earnings from on-going operations of at least $300,000 before taxes and extraordinary items, in the fiscal year immediately preceding the filing of the listing application;
pre-tax cash flow of $700,000 in the fiscal year immediately preceding the filing of the listing application and an average pre-tax cash flow of $500,000 for the two fiscal years immediately preceding the filing of the listing application; and
adequate working capital and an appropriate capital structure to carry on the business.
Exceptional circumstances may justify the granting of an exemption from section 19.09, in which case the application will be considered on its own merits. "Exceptional circumstances" for this purpose will normally be confined to an affiliation with a substantial established enterprise and/or an exceptionally strong financial position
Sec. 310. Public Distribution
At least 1,000,000 freely-tradeable shares having an aggregate market value of $4,000,000 must be held by at least 300 public holders, each holding one board lot or more. In circumstances where public distribution is achieved other than by way of a public offering, e.g., by way of a reverse take-over, share exchange offer, or other distribution, the Exchange may require evidence that a satisfactory market in the company's securities will develop. Prior trading on another market or sponsorship by an Exchange member, which will assist in maintaining an orderly market, may satisfy this condition.
Sec. 311. Management
The management of an applicant company shall be an important factor in the consideration of a listing application. In addition to the factors set out in Section 325, the Exchange will consider the background and expertise of management in the context of the business of the company. Management (including the company's board of directors) should have adequate experience and technical expertise relevant to the company's business and industry and adequate public company experience. Companies will be required to have at least two Canadian directors unless they are foreign applicants that comply with all of the Minimum Listing Requirements For Foreign Companies as detailed in Section 324.
Sec. 312. Sponsorship or Affiliation
Sponsorship of an applicant company by a member firm of the Exchange is required for companies applying to list under the subsections 309(a), 309(b), and 309(c). Sponsorship or affiliation with an established enterprise can be a significant factor in the determination of the suitability of the company for listing, particularly where the company only narrowly meets the prescribed minimum listing requirements. Consideration will be given to the nature of the sponsorship or affiliation. In addition to the requirements detailed in Section 326 for Sponsorship Of Companies Seeking Listing on the Exchange, sponsors for industrial applicants should also be responsible for reviewing and commenting on:
all visits to and/or inspections of the applicant's principal facilities and/or offices;
any future oriented financial information that has been provided with the application;
management's experience and technical expertise relevant to the company's business; and
all other relevant factors including those listed in footnotes 5 and 6 applicable for research and development companies.
Sec. 313. Other Factors
The Exchange may, in its discretion, take into account any factors it considers relevant in assessing the merits of a listing application and may refuse to grant an application notwithstanding that the prescribed minimum listing requirements are met.
Footnotes
Section 19.09 requires listed companies to obtain prior Exchange acceptance for filing of all proposed material changes, including changes which do not entail an issuance of securities as detailed in Part V of the Company Manual.
Consideration will be given to permitting the inclusion of deferred development charges or other intangible assets in the calculation of net tangible assets if, in the opinion of the Exchange, the circumstances so warrant.
Companies with less than $2,000,000 in net tangible assets may qualify for listing if they meet the earnings and cash flow requirements detailed in Section 309.1(ii) and (iii).
As a general rule, applicants should file a complete set of forecast financial statements covering the current and/or the next fiscal year (on a quarterly basis), accompanied by an independent auditor's opinion that complies with the CICA Auditing Standards for future oriented financial information. The applicant should have at least six months of operating history, including gross revenues at commercial levels for the last six months.
As a general rule, the projection should exclude cash flows from future revenues, uncommitted payments from third parties or other contingent cash receipts.
The Exchange will consider all relevant factors including:
the stage of development of the company's products or services and prospects for commercialization;
commercial or technical endorsements of the company's products or services from recognized academic institutions or industry participants;
the existing or potential markets for the company's products or services and the marketing infrastructure and sales support necessary to service these markets;
the background and expertise of management including its record of raising funds to finance research and development projects and on-going operations;
the existence and composition of any scientific advisory board; and
affiliations with major industry enterprises or strategic partners.
Further Information
If you are interested in learning more about TSE listing requirements, please e-mail listings@tse.com. |
