November 2025 TORONTO STOCK EXCHANGE Guide to Part III of the TSX Company Manual: Original Listing Requirements Applicable to Corporate Issuers
Table of Contents INTRODUCTION 4 (i) About this Guide PART I – DEFINITIONS 5 (i) Appropriate Capital Structure (ii) Market Capitalization (iii) Run Rate Calculation (iv) Working Capital PART II – LISTING CATEGORIES 10 (i) Diversified Companies (ii) Mining Companies (iii) Oil and Gas Companies (iv) TSX Sandbox® (v) Other Considerations PART III – SPONSORSHIP 19 (i) When Sponsorship is Required (ii) What is Required PART IV – ESCROW 20 (i) National Policy Escrow (ii) TSX Escrow Policy (iii) Release Schedule PART V – OTHER REQUIREMENTS 22 (i) Listing Representations (ii) Reserving a Stock Symbol (iii) Obtaining a CUSIP Number and Depository Eligibility at CDS (iv) Selecting a Transfer Agent and Registrar (v) Selecting a Newswire Provider (vi) Creating a TMX LINX Profile (vii) TSX Market Maker Program
PART VI – DOCUMENTS TO BE FILED 25 (i) Application Letter and Application Fee (ii) Personal Information Forms (iii) Principal Listing Document (iv) Listing Agreement (v) Listing Application (vi) Constating Documents (vii) Take-over Bid Protective Provisions (viii) Security Based Compensation (ix) Escrow Agreements (x) Material Documents (xi) Legal Opinion (xii) Security Certificates PART VII – RESOURCES ON TSX WEBSITE 29 TORONTO STOCK EXCHANGE 3
Introduction (i) About this Guide This guide is intended to provide guidance regarding the application of Part III Original Listing Requirements of the TSX Company Manual (the “Manual”) to corporate issuers, and is not an exhaustive list of the applicable requirements. Therefore, this guide should be read in conjunction with Part III of the Manual. Non-corporate issuers should refer to the “Guide to Part XI of the TSX Company Manual: Requirements Applicable to Non-Corporate Issuers.” This guide refers exclusively to Toronto Stock Exchange (“TSX” or “Exchange”) requirements. Applicants may also be subject to other requirements such as other exchange rules or corporate or securities legislation, as applicable. All capitalized terms used, but not defined in this guide, have the meanings as set out in the Manual. This guide is organized into seven sections, as follows: Part I – Definitions Explanations of principal terms used in connection with original listing requirements (“OLR”), including appropriate capital structure, market capitalization, run rate calculations and working capital. Part II – Listing Categories Review of listing requirements applicable to (i) Diversified Companies; (ii) Mining Companies; and (iii) Oil & Gas Companies, as well as an overview of TSX Sandbox® and considerations regarding public distribution, management and IFRS reporting. Part III – Sponsorship Guidance on sponsorship reports, including when they are required. Part IV – Escrow Examination of the TSX Escrow Policy and its application. Part V – Other Requirements Guidance on (i) making listing representations; (ii) reserving a stock symbol; (iii) obtaining a CUSIP® confirmation; (iv) selecting a transfer agent and registrar; (v) selecting a newswire provider; (vi) creating a TMX LINX® profile; and (vii) the TSX Market Maker Program. Part VI – Documents to be Filed Overview of documentation required in connection with a listing application. Part VII – Resources on TSX Website Links to additional resources, including the Manual and TSX Staff Notices, and information on issuer fees, security based compensation arrangements, timely disclosure and market making. TORONTO STOCK EXCHANGE 4
TORONTO STOCK EXCHANGE 5 Part I – Definitions Overview of OLR-specific concepts including appropriate capital structure, market capitalization, run rate calculation and working capital. (i) Appropriate Capital Structure “Appropriate capital structure”, as referred to in Sections 309 and 314, may be satisfied by demonstrating either: • positive working capital (calculated as excess of current assets over current liabilities in the most recent unaudited interim and audited annual periods); or • alternate evidence of liquidity, which may include (i) undrawn capacity on existing credit facilities sufficient to cover current deficit and/or (ii) other firm funding commitments. Evidence of liquidity will be assessed holistically. Considerations will include both evidence of incoming revenue and expected cash outflows (e.g., debt maturities subsequent to the balance sheet date, other cash payment obligations, unsustainable debt levels, etc.). (ii) Market Capitalization While “market capitalization” and “market price” are both defined at Part I of the Manual, in the context of original listing applications, market capitalization is calculated specifically as follows (as per footnote 5 to Section 309(a)(iii)): • For initial public offerings (“IPOs”): the offering price multiplied by the total number of outstanding equity securities being listed (including those issued pursuant to the IPO); • For direct listings from other stock exchanges, including graduations from TSX Venture Exchange: the 20-day average closing price of the equity securities on such stock exchange on which such securities are listed and posted for trading and on which the greatest volume of trading occurs, multiplied by the total number of equity securities outstanding, calculated as at the date on which TSX conditional listing approval is granted; • For spin-offs of a publicly listed issuer: the appropriate proportion of the pre spin-off market capitalization of the parent issuer; and • For other instances: the aggregate value of the listed equity securities as set out in a formal valuation prepared in accordance with Multilateral Instrument 61‐101 Protection of Minority Security Holders in Special Transactions.
TORONTO STOCK EXCHANGE 6 Note that the calculation is limited to listed equity securities. As a result, non-equity securities such as preferred shares or warrants will not be included in the calculation. Unlisted securities such as multiple voting shares, Class B shares (where both Class A and Class B shares are identical in attributes, but Class A is listed and Class B is not listed), or other unlisted securities that may be convertible into, and/or are the economic equivalent of, the listed equity security, will not be included in the calculation. The rationale behind this exclusion is that in the context of the original listing requirements, market capitalization serves as an indicator of market support for the applicant’s listed equity rather than enterprise valuation. Example - IPO with Dual-Class Share Structure The applicant is completing an IPO of 25,000,000 subordinate voting shares at $10 per share. The applicant will also be issuing to its founders 1,000,000 multiple voting shares, each multiple voting share carries 10 votes and is convertible into a subordinate voting share. Only the subordinate voting shares will be listed on TSX. • For IPOs, market capitalization = the offering price x total number of outstanding equity securities being listed. • Market capitalization = $10 x 25,000,000 = $250,000,000. • Multiple voting shares are not included in the calculation because they are not being listed. Example - Direct Listing with Dual-Class Share Structure The applicant is currently listed on another stock exchange and has outstanding, as at the date of TSX conditional listing approval, 35,000,000 subordinate voting shares with a 20-day average closing price of $11.50 per share and 17,500,000 multiple voting shares with a 20-day average closing price of $12.00 per share. The multiple voting shares are participating. Both classes of shares will be listed on TSX. • For direct listings from other stock exchanges, market capitalization = the 20-day average closing price of the equity securities on such exchange x total number of equity securities outstanding on the date of TSX conditional listing approval. • Market capitalization = ($11.50 x 35,000,000) + ($12.00 x 17,500,000) = $612,500,000. • Multiple voting shares are included because they are listed equity securities. Example - Direct Listing with Listed Preferred Shares The applicant is currently listed on another stock exchange and has outstanding, as at the date of TSX conditional listing approval, 50,000,000 common shares with a 20-day average closing price of $10.00 and 5,000,000 preferred shares with a 20-day average closing price of $35.00 per share. The applicant has applied to list both the common shares and the preferred shares on TSX. Following TSX conditional listing approval, the common share price increases to a 20-day average closing price of $11.00 and options are exercised for 1,500,000 common shares. • For direct listings from other stock exchanges, market capitalization = the 20-day average closing price of the equity securities on such exchange x total number of equity securities outstanding on the date of TSX conditional listing approval. • Market capitalization = $10.00 x 50,000,000 = $500,000,000. • Although they are being listed on TSX, the market value of the preferred shares is not included. • Although 1,500,000 options are exercised, and therefore the number of equity shares outstanding has increased to 51,500,000, TSX still uses the number of equity shares outstanding as at the date of TSX conditional listing approval. Similarly, even though the 20-day average closing price has increased to $11.00, TSX still uses the 20-day average closing price as at the date of TSX conditional listing approval.
TORONTO STOCK EXCHANGE 7 Example - Spin-Off For a spin-off of a publicly listed issuer, market capitalization for the purpose of OLR will be based on the appropriate proportion of the pre spin-off market capitalization of the parent issuer. The method of calculating this proportion will be specific to the case at hand and includes consideration of whether the transaction is taking place via distribution or re-organization, and whether a formal valuation has been prepared, among other factors. (iii) Run Rate Calculation Several listing categories require completion of a run rate calculation. The run rate calculation provides a forward-looking view of an applicant’s cash usage, supplementing the historical information in the applicant’s statement of cash flows. The intent of the run rate calculation is to track how quickly an issuer is spending its cash in relation to its cash reserves. The run rate calculation must be based on a conservative set of assumptions and be consistent with plans and programs established in technical reports, board approved budgets, signed sales contracts and established product/service delivery schedules and known financial commitments and obligations expected for the periods presented. A run rate calculation is particularly appropriate for entities at an early stage of development, because such entities will most likely report negative working capital, have no revenues and have negative cash flow from operations. Accordingly, an evaluation of run rate including other available funding sources (i.e., alternative evidence of liquidity) is a better tool to assess whether the applicant can fund its stated business objectives. Case-Specific The determination of run rate is wholly dependent on the nature of the applicant’s business as well as management’s plans and programs; accordingly, there is no “one size fits all” approach. Principally, the analysis should clearly show the net amount of cash the applicant is projected to use at the end of each quarter as well as the available cash runway to demonstrate that the applicant has sufficient funding at the end of the applicable 12, 18 or 24-month period specified in the applicable original listing test. As a result, TSX does not prescribe a standardized template approach for the run rate calculation. Instead, a principles-based approach is used, taking into account historical financial results and subsequent events. The guidance below is intended to highlight some of the principles behind the run rate calculation in the context of OLR but is not intended to be an exhaustive list. Sources of funds may include only those assumptions with a high degree of certainty Financing proceeds Sources of funds should not include expected fundraising proceeds for “yet to be defined” initiatives or plans that are at a preliminary stage or are speculative in nature. Sources of funds may include an offering that is expected to be completed with a high degree of certainty, such as where an engagement letter has been executed, a term sheet has been issued, work is underway to fill the order book and there is a high degree of confidence regarding expected proceeds and closing date. Sources of funds should not include proceeds from future exercises of warrants (even if deeply in the money at the time of application) or other convertible securities, unless the holder of the convertible security has provided a notice of exercise/conversion.
TORONTO STOCK EXCHANGE 8 Sales Aggressive or overly optimistic sales growth assumptions will not be accepted. Sales targets should be reconciled to past performance (e.g., if historical sales growth is 5%, TSX will accept a continued growth rate of up to 5% for the purposes of the run rate calculation). Sales assumptions during the run rate period should be realistic and consistent with available data concerning the pipeline of executed sales contracts, sales backlog and expected product delivery schedules. Sales assumptions should include realistic expectations for the achievement of project milestones for contracts where revenue is earned in stages. Assumptions should be supported by committed revenue sources such as existing subscription revenue or signed contracts as opposed to non-recurring projects or verbal commitments. Note that where there are several advanced sales negotiations underway, it may be unrealistic to assume that all of the negotiations will result in executed contracts for the pipeline. Borrowing proceeds Borrowing proceeds may be included only if there is a committed loan facility in place or negotiations with the lender are sufficiently advanced such that the risk of non-completion is very low. In these cases, listing conditions will likely include evidence of execution of the loan. Uses of funds should be conservative Aggressive assumptions for cost savings should be avoided. Calculations should assume that expenses will be as high as, or higher than, historical expenses (taking into account current events such as inflation, global macroeconomic factors, availability of supply, etc.). Applicants should include a contingency buffer to address unexpected costs, particularly for project expenditures. If the sources of cash include draws against existing borrowing facilities, applicants should include financing fees and interest expenses calculated in accordance with the terms of the loan agreement. The run rate calculation must be current to the time of listing As the business environment is dynamic, it is expected that the run rate calculation will evolve and change over time. Therefore, if the application review period takes longer than expected, TSX Staff may request an updated run rate calculation to ensure that by the time of listing, the calculation is not considered to be stale. Applicants reporting revenue Management teams often prepare internal analyses similar in concept to the run rate calculation, commonly modelling for optimistic, base case and worst case scenarios. For TSX listing application purposes, the objectives of the base case scenario are often aligned with the objectives of the run rate calculation. The optimistic scenario may be illustrative of the upside potential of the business, however, the goal of the run rate calculation is to understand how the business is expected to be run once listed on TSX. At the other end of the spectrum, while a worst case scenario is useful for understanding absolute risk and resulting survival plans, it may not reflect a realistic expectation of how the business is expected to be run once listed on TSX.
TORONTO STOCK EXCHANGE 9 Applicants at the pre-revenue stage For businesses not yet generating revenue, the objective of the run rate calculation is to illustrate how quickly the business is “burning” available cash reserves (often referred to as burn rate for this type of applicant). Unlike a business reporting revenue, the objective of the run rate calculation for a business with no revenue is to demonstrate whether the cash on hand is sufficient for the entity to survive for a specified length of time, balancing cash conservation with necessary development activities to further advance the enterprise’s value proposition in order to attract subsequent funding from investors. As the run rate calculation is composed completely of cash outflows, it is critical to take a conservative approach: • If hiring personnel is required to advance the project, expenses should reflect the required headcount, timing of new hires and realistic salary costs based on prevailing market rates for applicable professionals and skilled contractors. • Project advancement expenditures and expected timing should be consistent with the information set out in the technical report or feasibility report. • The calculation should include a contingency buffer for the unexpected events such as unforeseen delays and project overruns. As part of running the business, management monitors their material projects for delays (regulatory and operational), cost overruns and other unforeseen developments, so it is also expected that the ensuing run rate calculation accounts for such factors. (iv) Working Capital For the purposes of the OLR, and as per footnote 2 to Section 309(a)(ii), working capital is calculated as the current assets less current liabilities, consistent with the concept in public enterprise accounting standards such as IFRS or US GAAP.
TORONTO STOCK EXCHANGE 10 Part II – Listing Categories The following is an overview of the categories available for listing on TSX. Please refer to Part III of the Manual for further details. (i) Diversified Companies There are three categories available to applicants in the diversified sector: (i) Income & Revenue-Producing Companies, (ii) Pre Income-Producing Companies and (iii) New Enterprise Companies. Note that applicants required to produce a technical report pursuant to either National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) or National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), must apply pursuant to Sections 314 or 319 of the Manual, respectively, as per footnote 1 to Section 309. Income & Revenue-Producing Companies This category is designed for applicants with mature businesses that produce income or have significant revenues. There are two streams available pursuant to this category: (i) Income Test and (ii) Revenue Test. Income Test Revenue Test Operations Annual audited pre-tax net income from continuing operations in the fiscal year immediately preceding the TSX listing application: $750,000 Annual audited revenue in the fiscal year immediately preceding the TSX listing application: $10,000,000 Funding Appropriate capital structure as evidenced by: Positive working capital in the most recent interim and audited annual periods OR Alternate evidence of liquidity Positive pre-tax cash flow from operations in the most recently completed audited annual and interim financial statements OR 12-month run rate calculation demonstrating sufficient funding for the period Market Support $100,000,000 market capitalization $100,000,000 market capitalization Cash flow from operations: As per footnote 3 to Subsection 309(a), this is calculated as cash flow from operating activities before changes in working capital. If the applicant is unable to demonstrate positive cash flow on both an interim and annual basis due to seasonality or other material developments, TSX Staff may look to alternate evidence of liquidity, such as undrawn capacity on available credit facilities, or other firm funding commitments.
TORONTO STOCK EXCHANGE 11 Pre Income-Producing Companies This category is designed for applicants with operating businesses that do not yet produce significant revenue and for certain real estate investment trusts. There are two streams available pursuant to this category: (i) Expenses Test and (ii) Lease Test. Expenses Test Lease Test Operations Audited income statement demonstrating at least one year of operating expenses to advance the business Audited balance sheet reporting assets under construction AND Signed imminent leases Funding 24-month run rate calculation demonstrating sufficient funding for the period Evidence that the primary business is to generate rental revenue from constructed assets AND 12-month run rate calculation demonstrating sufficient funding for the period Market Support $50,000,000 market capitalization $50,000,000 market capitalization Newly acquired business: Note that as per footnote 6 to Subsection 309(c), if the applicant has operated its primary business for less than one year, TSX Staff may accept audited historical financial statements of the predecessor business, provided there are no material changes to the business at the time of listing. Signed imminent leases: These are executed lease agreements for the assets under construction with a term set to begin within the next 12 months. The assumptions in the 12-month run rate calculation should include funding assumptions for the periods prior to the commencement of the lease term to ensure there is sufficient liquidity until the leases generate cash flows for the business. New Enterprise Companies This category is designed for applicants that do not have an existing business, but have an experienced management team, proof of business concept and adequate funding. There are two streams available pursuant to this category: (i) 12-Month Test and (ii) 24-Month Test. 12-Month Test 24-Month Test Operations Management expertise satisfactory to TSX AND Proof of business concept Management expertise satisfactory to TSX AND Proof of business concept Funding Equity raise of $100,000,000 in the six months preceding the filing of the TSX listing application AND 12-month run rate calculation demonstrating sufficient funding to advance the project per stated targets identified in a feasibility report 24-month run rate calculation demonstrating sufficient funding to advance the project per stated targets identified in a feasibility report Market Support $100,000,000 market capitalization $200,000,000 market capitalization
TORONTO STOCK EXCHANGE 12 Management Expertise: This will be viewed holistically. Consideration will be given to a range of factors, including an individual’s past conduct, education, training and experience in the relevant business sector and public markets, as well as the overall composition of the applicant’s management team and board of directors. Corporate governance matters will also be relevant. TSX will generally expect at least one member of the applicant’s board of directors to have recent Canadian public markets experience. Proof of Business Concept: This will be assessed on an individual basis. Typically, TSX Staff will expect to see regulatory approval to proceed with the proposed project or a bankable feasibility report in hand, and evidence that the board of directors has developed a committed pathway to commence construction. This listing category aims to identify enterprises with projects that have a reasonable expectation of advancement in the near future and is not meant for preliminary stage projects. A project involving new technology or innovation is considered to have reached the “proof of business concept” stage when the core technology has been demonstrated as both feasible and effective, with evidence to support its viability at scale. There is an expectation for a working model or a prototype that has shown it can achieve its intended purpose and there is a clear and viable path forward to scale the project from its current state to a fully developed and operational status. Equity Raise: The equity raise must be for an aggregate of $100 million in the six months immediately preceding the applicant’s TSX listing application. The raise may aggregate various tranches within the six month period, and may include proceeds to be raised in an IPO concurrent with listing. The raise may take place on a public or private basis, as long as the applicant is able to meet TSX public distribution requirements. The raise may include issuances at various issue prices, however because TSX regards the raise as evidence of market support for the issuer at the time of TSX listing, the applicant must demonstrate arm’s length support for the issuer at the most recent issue price. Arm’s length support is generally demonstrable by evidence of at least 50 arm’s length purchasers each purchasing a board lot or more. Prior to applying under the 12-Month Test, applicants should discuss financing parameters with TSX Staff to ensure acceptability for the purposes of meeting OLR. Funding to Advance the Project: Given that applicants under this category do not yet have an operating history, the run rate calculation is particularly critical to TSX Staff’s review. The 12 or 24 month run rate calculation, as applicable, must meaningfully support development of the applicant’s proof of business concept. It must incorporate project advancement expenditures set out in the feasibility report. Timing, project milestones and gating items must also be consistent with the feasibility report.
TORONTO STOCK EXCHANGE 13 (ii) Mining Companies There are three categories available to applicants in the mining sector: (i) Producing Mining Company, (ii) Mineral Exploration & Development Company and (iii) Senior Mining Company. Industrial mineral companies (those with properties containing minerals which are not readily marketable) not currently generating revenues from production will normally be required to submit commercial contracts and meet the requirements of the Producing Mining Company category. Producing Mining Company Mineral Exploration & Development Company Senior Mining Company Qualifying Property as detailed in a report conformed to NI 43-101 Proven and probable reserves to provide a 3 year mine life on a Qualifying Property detailed in a report by an independent qualified person AND Evidence satisfactory to the Exchange indicating a reasonable likelihood of future profitability supported by a feasibility study or documented historical production and financial performance Advanced property detailed in a report prepared by an independent qualified person: a property with a current mineral resource estimate and/ or a current mineral reserve estimate, as defined in NI 43-101 Proven and probable reserves to provide a 3 year mine life detailed in a report prepared by an independent qualified person Production OR Work Program In production OR Have made a production decision on the relevant Qualifying Property Planned work program of exploration and / or development of at least $5 million that is satisfactory to the Exchange, will sufficiently advance the property and is recommended by a qualified person - Funding 18 month run rate calculation demonstrating sufficient funding to bring the Qualifying Property into commercial production and adequate working capital to fund all budgeted capital expenditures, signed by the Chief Financial Officer and a qualified person 18 month run rate calculation demonstrating sufficient funding to complete the planned program of exploration and/or development and meet estimated general and administrative costs, anticipated property payments and capital expenditures for the period, signed by the Chief Financial Officer and a qualified person Adequate working capital to carry on the business Capital Structure Positive working capital in the most recent interim and audited periods OR Alternate evidence of liquidity Positive working capital in the most recent interim and audited periods OR Alternate evidence of liquidity Positive working capital in the most recent interim and audited periods OR Alternate evidence of liquidity Income - - Annual audited pre-tax net income from continuing operations in the fiscal year immediately preceding the TSX listing application
TORONTO STOCK EXCHANGE 14 Producing Mining Company Mineral Exploration & Development Company Senior Mining Company Pre-tax Cash Flow from Operations - - $1,250,000 in the fiscal year immediately preceding the TSX listing application AND Average of $900,000 for the two fiscal years immediately preceding the TSX listing application Market Support $50,000,000 market capitalization $50,000,000 market capitalization $100,000,000 market capitalization Adequate working capital to carry on the business: This is required for senior mining companies in lieu of a run rate calculation and is assessed on the basis of the applicant’s most recent financial statements (interim or annual) subject to subsequent material events. In some cases, pro forma statements may also be useful. Appropriate capital structure: As per footnote 2 to Section 309, appropriate capital structure is evidenced either by (a) positive working capital (calculated as excess of current assets over current liabilities in the most recent interim and audited annual periods) or (b) alternate evidence of liquidity, which for a Senior Mining Company, may be satisfied by its pre-tax cash flow. This capital structure requirement is historical and is separate from the run rate calculation, which is forward-looking. Accordingly, servicing of debt should be accounted for in an applicant’s run rate calculation, and, if classified as a current liability, the principal amount of the debt should be accounted for in the working capital calculation. Generally, TSX Staff expects that applicants under Subsection 314(b) will not have long term debt on their balance sheets at the time of listing. Applicants that cannot meet the positive working capital test may present alternate evidence of liquidity in order to demonstrate appropriate capital structure. This may include firm financing commitments but may not include a pattern of successful historical financings or a proposed future raise. Note that a raise concurrent with TSX listing which is designed to provide sufficient program funding for the applicant’s run rate calculation may not satisfy the test for alternate evidence of liquidity if it is insufficient to cover debt servicing and/or retirement as well as the program funding in question. Qualified person: As defined by NI 43-101. Note that reports prepared by independent qualified persons, and the acceptability of the authors, must conform to NI 43-101 and be acceptable to the Exchange. Qualifying Property: This is any property upon which an applicant applying under Section 314 is relying on in order to meet the OLR. Run rate calculation: Please note that pursuant to Subsections 314(a) & (b), specifically, the run rate calculation for applicants in either category must be signed by a qualified person in addition to the applicant’s CFO. Work program: TSX Staff will consider applicants undertaking an exploration or development program of at least $3,500,000 on a Qualifying Property if planned program expenditures on all properties aggregate at least $5,000,000. The additional properties will be considered with the submission of appropriate technical documentation, conforming to NI 43-101. Work program costs must be accounted for in the applicant’s run rate calculation. Note regarding lithium: When extracted by conventional hard rock and brine extraction processes, lithium will generally be considered to not be an industrial mineral, given that it is readily marketable.
TORONTO STOCK EXCHANGE 15 (iii) Oil and Gas Companies There are two categories available to applicants in the oil and gas sector: (i) Oil and Gas Companies and (ii) Senior Oil and Gas Companies. Within the Oil and Gas Company category, there are two streams available, based on either positive pre-tax cash flow or a 12-month run rate calculation. All Senior Oil and Gas Companies must demonstrate positive pre-tax cash flow, among other requirements. Oil and Gas Company Senior Oil and Gas Company Operations Proved and probable reserves of $100,000,000, the majority of which is proved Proved reserves of $100,000,000 Funding Positive pre-tax cash flow from operations in the most recently completed audited annual and interim financial statements OR 12-month run rate calculation demonstrating sufficient funding for the period Positive pre-tax cash flow from operations in the most recently completed audited annual and interim financial statements AND Average production rate of 10,000 boepd for the most recently completed quarter Market Support $50,000,000 market capitalization $100,000,000 market capitalization Reserves: Both “proved” and “probable” reserves are as defined in NI 51-101 and the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter), as amended from time to time. The value of reserves should be calculated as the net present value of future cash flows before income taxes, prepared on a forecast basis, and discounted at a rate of 10%. The Exchange may, at its discretion, also require the provision of a price sensitivity analysis. Technical reports must be prepared by an independent technical consultant and conform to NI 51-101, and be acceptable to the Exchange. Reports prepared in conformity with other reporting systems deemed acceptable by the Canadian Securities Administrators (“CSA”) as evidenced by a CSA exemption will also be acceptable. Note regarding other alternative sources of energy (green hydrocarbons, geothermal, biofuels, hydrogen, helium, etc.): Such applicants should contact TSX Staff on a pre-filing basis to discuss possible reserves requirements. TSX will also consider the applicant’s applicable pre-filing discussions with the CSA in such circumstances.
TORONTO STOCK EXCHANGE 16 (iv) TSX Sandbox® TSX Sandbox is a program designed to bring exceptional and/or novel applicants to the public market, even though such applicants may not meet OLR. Eligibility for the program is evaluated considering a range of factors including, but not limited to: • Highly experienced management team, board of directors and other supporters with demonstrated track record in public markets. • Significant public raise resulting in wide distribution of the applicant’s securities (generally considered to be a raise of $100,000,000 or more). • Size of market capitalization. • Significant pre-tax cash flow from operations. • Incorporation in Canada or in a jurisdiction with corporate governance practices comparable to Canadian standards. • A long-form prospectus recently receipted by a CSA member or a U.S. registration statement recently made effective through a Securities and Exchange Commission filing. • Sponsorship by a Participating Organization or commentary and support from another entity with recognizable sector-specific expertise. • Evidence of widespread public support and investor interest. • Established corporate governance practices. The following factors will preclude eligibility for inclusion in TSX Sandbox: • Ongoing or historical regulatory sanctions and/ or investigations involving the applicant or its management, board members, other insiders and/or affiliated persons. • Emerging market issuers. • Derogatory regulatory or media information regarding the applicant or its management or board members. • Applicants and listed issuers that have previously applied through TSX’s standard procedures, unless specifically invited to apply to TSX Sandbox by TSX Staff. A pre-filing meeting with TSX Staff is required for any TSX Sandbox application. An application to TSX should consist of the same documents as a regular application, but should also include a submission requesting that the application be reviewed via TSX Sandbox. The submission should include a discussion of the unique factors contributing to the applicant’s exceptional status, and address relevant eligibility criteria. Given that applicants applying via TSX Sandbox would not generally satisfy OLR, TSX may apply additional conditions in order to facilitate the listing on an exceptional, discretionary basis. Such conditions may include, but are not limited to: • Enhanced disclosure requirements. • Minimum public raise. • Minimum market capitalization. • Enhanced sponsorship or alternatively expertised support in the form of a report to TSX. • Enhanced escrow requirements. • Time limitation for listing or applicable waiver. • Enhanced reporting requirements to TSX and/ or the public. For further information, please refer to TSX Staff Notice 2019-0002.
TORONTO STOCK EXCHANGE 17 (v) Other Considerations IFRS Certain of the financial tests included in the OLR refer to select financial statement measures. The requirements in IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”) are effective for annual reporting periods commencing on or after January 1, 2027, with earlier adoption permitted, and will replace IAS 1 Presentation of Financial Statements. Notable changes imposed by IFRS 18 include: (i) requirements to present two new defined subtotals; (ii) disclosure of management performance measures (may include some non-GAAP measures); and (iii) new principles for aggregation and disaggregation of revenue and expense line items. While the new standards imposed by IFRS 18 may change the overall appearance and presentation of the financial statements, no substantive changes to the application of the OLR are expected. For example, for assessing whether an applicant meets the Income Test pre-tax net income from continuing operations test pursuant to Section 309(a)(i), the starting point would be the financial statement line item: profit or loss before income tax total (before discontinued operations). Consistent with past practices, TSX Staff would make further adjustments by removing non-recurring items or items not considered to be part of ordinary course business operations (e.g., one- time settlement gains and losses on litigation, gains and losses on a one- time sale of assets no longer used by the business, revenues from subleasing downsized warehouse space that are considered to be ancillary to the primary business operations, consideration for subsequent adverse material changes to the business, etc.). In reviewing an applicant’s suitability for listing, a review of the financial statement measures is the starting point. However, in order to make a complete assessment of the applicant, an evaluation of the business’ past performance and future prospects, including recent historical unaudited financial performance, are required, and this may require the review of other information sources (including proprietary discussions with management) beyond the historical financial statements. Public Distribution All applicants are required to demonstrate public distribution of at least 1,000,000 freely tradeable securities held by at least 300 public holders, each holding one board lot or more, as per Sections 310, 315 and 320 of the Manual. Note that: • for securities with a market value of $1.00 per security or greater, a board lot constitutes 100 securities; • for securities with a market value of less than $1.00 to $0.10 per security, a board lot constitutes 500 securities; and • for securities with a market value of less than $0.10 per security, a board constitutes 1,000 securities. Management For all listing categories, the management of the applicant is an important factor in the consideration of a listing application. As per Section 325 of the Manual, TSX reserves the right to exercise discretion in considering all factors related to the management of an applicant in order to determine the acceptability of the applicant for listing on TSX. The background and expertise of management in the context of the applicant’s business, whether a diversified industry, mining or oil and gas, will be considered in order to ensure adequate experience and technical expertise relevant to the applicant’s business. Management background will also be reviewed to ensure the applicant’s ability to comply with public company disclosure obligations, such as the TSX Timely Disclosure Requirements (see the TSX Guide to Timely Disclosure Requirements).
TORONTO STOCK EXCHANGE 18 TSX will also assess the suitability of officers, directors, promoters, major security holders, or any combination thereof, or any other person or entity deemed by the TSX to hold enough of the listed issuer’s securities to materially affect control. TSX Staff will use discretion to determine suitability by taking into account all relevant factors concerning such individuals, including their past conduct. Applicants must have at least two independent directors, a chief executive officer, a chief financial officer (who is not also the chief executive officer) and a corporate secretary. Special Purpose Acquisition Corporations Special Purpose Acquisition Corporations (“SPACs”) must apply pursuant to Part X of the Manual, specifically. SPACs should refer to the TSX Guide to Special Purpose Acquisition Corporations for more information.
TORONTO STOCK EXCHANGE 19 Part III – Sponsorship (i) When Sponsorship is Required A sponsorship report prepared by a TSX Participating Organization is required in the following circumstances: • Where the applicant has not filed a prospectus for an offering of securities underwritten by a Participating Organization within six months prior to the date of listing, unless graduating from TSX Venture Exchange (the “TSXV Exemption”); • Where the application involves an emerging market jurisdiction; • Where there are governance issues for which TSX requires additional commentary; • Where, based on TSX’s review of management personal information forms and/or experience, additional commentary is required; or • Where, based on TSX’s review of title and ownership of a resource property, additional commentary is required. A complete list of TSX Participating Organizations is available here. TSX maintains discretion to require sponsorship for other reasons not specifically described. This may be relevant where, for instance, the applicant conducts business in an industry where Canadian legislation is still developing, there are questions around legality of operations, or the applicant’s service or product is awaiting requisite approvals under applicable law (such as health approvals for consumer products). Applicants currently listed on TSX Venture Exchange (“Graduates”) may benefit from the TSXV Exemption; however, Graduates are subject to the remaining requirements and a sponsorship letter will be required if there are matters involving emerging market jurisdictions, governance, management, or title and ownership of a resource property. For applicants with significant ties to emerging market jurisdictions, the sponsorship provisions of TSX Staff Notice 2015-0001 apply. There may be case-by-case instances where a discretionary waiver is merited, such as where a Graduate has recently prepared a sponsorship report acceptable to TSX Venture Exchange. (ii) What is Required Please see Section 326 of the Manual for a list of items to be addressed in the sponsorship report. Not all items listed in Section 326 of the Manual may be relevant to an application and it may be possible for a sponsor to instead prepare a targeted report addressing only particular items of interest. Applicants are encouraged to discuss the required contents of a sponsorship report with TSX Staff prior to engaging a Participating Organization for this purpose.
TORONTO STOCK EXCHANGE 20 Part IV – Escrow Escrow for new entrants to Canada’s capital markets is required by both securities law, in the case of an IPO, and TSX-specific policy, in the case of listings taking place other than by way of IPO. (i) National Policy Escrow National Policy 46-201 Escrow for Initial Public Offerings (“NP 46201”) requires escrow for IPOs, and includes a standard form of escrow agreement, Form 46-201F1 Escrow Agreement (“Escrow Form”). Pursuant to NP 46-201, escrow is not required for: • an applicant classified by TSX as an exempt issuer at the time of IPO; or • an applicant with a market capitalization of at least $100 million at the time of IPO. TSX defines “exempt issuer” as an issuer with a market capitalization of at least $100 million at time of original listing on TSX. Note that “market capitalization” in this context is as defined at footnote 5 to Subsection 309(a) of the Manual. Therefore, applicants listing on TSX pursuant to an IPO with a market capitalization of $100 million will be exempt from escrow. All other applicants completing IPOs and listing on TSX, will be subject to securities law escrow under NP 46-201. Principals of such applicants will be required to place their securities in escrow under an escrow agreement in accordance with the terms of NP 46-201, to be administered by the relevant CSA jurisdiction and not by TSX. (ii) TSX Escrow Policy The TSX Escrow Policy applies to applicants not otherwise subject to NP 46-201 that have: • listed on TSX by completing reverse takeovers of TSX listed issuers (“Backdoor Listing”); • listed on TSX by completing a qualifying acquisition with a SPAC (“QA”) as under Part X of the Manual; or • conducted their IPOs in markets outside of a CSA jurisdiction within the 12 months preceding the date of the TSX listing application (“Non-CSA IPO”). Pursuant to the TSX Escrow Policy, TSX applies the principles of NP 46-201 in determining when escrow applies in these instances. As a result, escrow is not required for: • an exempt issuer; or • an issuer with a market capitalization of at least $100 million.
TORONTO STOCK EXCHANGE 21 Therefore, applicants listing on TSX pursuant to a Backdoor Listing, QA or Non-CSA IPO with a market capitalization of at least $100 million will be exempt from escrow. All other applicants listing on TSX by way of Backdoor Listing, QA or Non-CSA IPO, will be subject to escrow under the TSX Escrow Policy. Principals of such applicants will be required to place their securities in escrow under an escrow agreement in accordance with the terms of the TSX Escrow Policy, to be administered by TSX. The TSX Escrow Policy employs the same Escrow Form as NP 46-201. (iii) Release Schedule Where the TSX Escrow Policy applies to a non-SPAC applicant, the escrow release schedule is as follows (applicants completing a QA with a SPAC should refer to Part X of the Manual, specifically): Date Release On the date issuer’s securities are listed on TSX 1/4 of the escrow securities 6 months after the listing date 1/3 of the remaining escrow securities 12 months after the listing date 1/2 of the remaining escrow securities 18 months after the listing date the remaining escrow securities NP 46-201 and the Escrow Form may be found on the web sites of CSA members including, but not limited to, the Ontario Securities Commission (www.osc.gov.on.ca).
TORONTO STOCK EXCHANGE 22 Part V – Other Requirements (i) Listing Representations If an applicant would like to include a statement in its preliminary prospectus, draft prospectus or other offering document that an application has been made to list its securities on TSX, a draft of such document must be provided to TSX for review prior to being filed. Please refer to Staff Notice 2018-0001 for more details. (ii) Reserving a Stock Symbol As per Staff Notice 2018-0005, applicants may request, in writing and directed to the applicable listings manager, a specific stock symbol when applying to list. Upon confirmation from TSX of the allocated symbol, the symbol will remain reserved for an initial period of 90 days, and upon request in writing by the applicant, such period may be extended for up to two additional 90-day periods, for an aggregate maximum period of 270 days. At the end of the 270-day period, the reserved symbol will automatically be released and may not be reserved by or for the same applicant for a period of 10 days, after which the applicant may apply again to request the same symbol, subject to availability. The applicant is responsible for requesting an extension in writing before the end of any reservation period. If a reservation is not extended by the applicant by the end of any reservation period, the symbol will be released. (iii) Obtaining a CUSIP Number and Depository Eligibility at CDS A CUSIP number (Committee on Uniform Security Identification Procedures) is a standard system of securities identification and securities description that is used in electronically processing and recording securities transactions in North America. A CUSIP number uniquely identifies a Canadian or American security and its issuer. A CUSIP number is required for all securities listed on TSX. As a service bureau to the Canadian financial industry, CDS Clearing and Depository Services Inc. (“CDS”) coordinates the assignment of ISIN and CUSIP numbers with CUSIP Global Services. CUSIP numbers may be requested here, using the ISIN Issuance webbased service provided by CDS. As a condition of listing, applicants will be required to provide TSX with a CUSIP number confirmation for each of their listed securities, which can be obtained here by requesting an Unqualified Letter of Confirmation from CDS. Applicants must confirm that their listed securities are eligible for clearing and settlement with CDS. More information concerning the depository eligibility criteria of CDS, and how to request security
TORONTO STOCK EXCHANGE 23 eligibility with CDS, can be found here. Proof of CDS eligibility for all securities to be listed will be required as a condition of listing. (iv) Selecting a Transfer Agent and Registrar As per Section 347 of the Manual, all issuers listed on TSX must appoint and maintain a transfer agent and registrar with a principal office in one or more of Vancouver, Calgary, Toronto, Montreal or Halifax. Generally, only trust companies may act as transfer agent and registrar. The transfer agent function involves keeping a ledger of the security holders’ names and addresses and the number of securities registered in the name of each registered holder, with such registered securities usually evidenced by either a security certificate, a record in a Direct Registration System administered by the transfer agent and registrar, or electronically reconciled between the transfer agent and registrar and a central security depository such as CDS. The transfer agent also issues new certificates and cancels old certificates, and/or generates direct registration statements, as applicable, and may also provide additional services such as the distribution of dividends and proxy materials on behalf of an issuer. The registrar function involves receiving old cancelled certificates as well as new certificates from the transfer agent, and validating transfers by signing and recording new certificates. The registrar ensures that the number of securities issued in certificate form is consistent with the number of securities actually issued by the issuer. Listed issuers incorporated in the United States may appoint a transfer agent and registrar based in the United States, provided that they appoint a co-transfer agent in Canada (with transfer facilities in at least one of the cities mentioned above). Where a listed issuer uses a registrar in the United States, such registrar must be duly registered with the U.S. Securities and Exchange Commission. Written confirmation that a TSX acceptable transfer agent and registrar has been appointed by the applicant will be required as a condition of listing on TSX. TMX Group Limited’s suite of issuer services includes TSX Trust Company, a federal trust company regulated by the Office of the Superintendent of Financial Institutions and licensed to operate as a trust company in all provinces and territories in Canada. More information regarding TSX Trust Company is available here. (v) Selecting a Newswire Provider As per Section 417 of the Manual, once listed on TSX, issuers must employ a wire service or combination of services providing national and simultaneous coverage in order to ensure that the entire financial community is aware of an issuer’s news at the same time. TSX accepts the use of any news services that meet the following criteria: • dissemination of the full text of the release to the national financial press and to daily newspapers that provide regular coverage of financial news; • dissemination to all Participating Organizations; and • dissemination to all relevant regulatory bodies. TMX Group Limited’s suite of issuer services includes TMX Newsfile, a news dissemination and regulatory filing provider. More information regarding TMX Newsfile is available here.
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