The TSXV Extends and Modifies Temporary Relief from Certain Private Placement Pricing Requirements

The TSX Venture Exchange (the “Exchange”) has issued a bulletin announcing the extension to August 31, 2013 of certain temporary relief measures (the “Relief Measures”), designed to help issuers raise necessary capital in the private placement market. Subject to certain conditions, the Relief Measures permit issuers to:

  1. Complete share and unit offerings with an offering price below $0.05;
  2. Complete debenture offerings with a debenture conversion price below $0.10;
  3. Complete offerings involving a warrant with an exercise price below $0.10; and
  4. Use up to $50,000 of the gross proceeds raised in a private placement that relies on the Relief Measures for general working capital purposes, with such proceeds not being subject to the condition that they be used to maintain or preserve the issuer’s existing business, or a prohibition against payments to related parties.

Updates to the Relief Measures

The Exchange bulletin also amended the Relief Measures as follows:

  1. Issuers are now permitted to raise up to an aggregate of $200,000 from related parties without any arm’s length component to the private placement being required; and
  2. There is no longer a requirement that 75% of the funds raised using the Relief Measures as to warrant exercise price be from non-arm’s length parties.

Conditions for use of the extended Relief Measures

All Exchange and NEX issuers who wish to rely on the Relief Measures must fulfill a number of requirements and conditions, which include demonstrating imminent financial hardship. Capital Pool Companies, including those listed on NEX, are not permitted to rely on any of the Relief Measures.

 

For more information, please contact any member of the Boughton Law Securities Group.

The information contained in this post is a summary only and is not considered to be legal advice.

 

Tags: Article; Securities

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