On April 12, 2013, the TSX Venture Exchange (“TSXV”) extended its policies permitting listed issuers to price private placement financings below previously mandated pricing floors. Since August 2012, the TSXV has permitted companies whose share price is below $0.05 to price share or unit offerings at market, to price debenture conversions at below $0.10, and to issue offerings with warrant exercise prices below $0.10 (the “Relief Measures”). Now, in recognition of the difficulties in financing venture issuers in current market conditions, the TSXV will also permit these types of financing to be conducted by insiders for up to $200,000 in proceeds. Arm’s length investors are not required, however CPCs are not permitted to rely on the Relief Measures.
The changes are recognition by the TSXV that, in the current market conditions, financings are very hard to come by and insiders may be the only ones prepared to finance an issuer. Whether these measures will be enough to increase financing activity for TSXV issuers remains to be seen.
The TSXV Bulletin of April 12, 2013 can be accessed here.
Contact any member of Clark Wilson LLP’s Corporate Finance & Securities Group for assistance with private placement rules and documents.