Technical Guide to Listing

60 Appendix C Toronto Stock Exchange Listing Requirements for Industrial, Technology and Research & Development Companies MINIMUM LISTING REQUIREMENTS TSX NON-EXEMPT TECHNOLOGY ISSUERS1, 7 TSX NON-EXEMPT RESEARCH AND DEVELOPMENT (R&D) ISSUERS7 TSX NON-EXEMPT FORECASTING PROFITABILITY7 TSX NON-EXEMPT PROFITABLE ISSUERS7 TSX EXEMPT INDUSTRIAL COMPANIES8 Earnings or Revenue Evidence of pre-tax earnings from on-going operations for the current or next fiscal year of at least $200,000.2 Pre-tax earnings from on-going operations of at least $200,000 in the last fiscal year. Pre-tax earnings from on-going operations of at least $300,000 in the last fiscal year. Cash Flow Evidence of pre-tax cash flow from on-going operations for the current or next fiscal year of at least $500,000.2 Pre-tax cash flow of $500,000 in the last fiscal year. Pre-tax cash flow of $700,000 in the last fiscal year, and an average pre-tax cash flow of $500,000 for the past two fiscal years. Net Tangible Assets $7,500,0003 $2,000,0003, 4 $7,500,0003 Adequate Working Capital and Capital Structure Funds to cover all planned development expenditures, capital expenditures, and G&A5 expenses for one year.6 Funds to cover all planned R&D expenditures, capital expenditures and G&A5 expenses for two years.6 Working capital to carry on the business, and an appropriate capital structure. Cash in Treasury Minimum $10,000,000 in the treasury, the majority of which has been raised by the issuance of securities qualified for distribution by a prospectus. Minimum $12,000,000 in the treasury, the majority of which has been raised by the issuance of securities qualified for distribution by a prospectus. Products and Services Evidence that products or services at an advanced stage of development or commercialization and that management has the expertise and resources to develop the business.9 Minimum two year operating history that includes R&D activities. Evidence of technical expertise and resources to advance its research and development programme(s).10 Management and Board of Directors Management, including the board of directors, should have adequate experience and technical expertise relevant to the company’s business and industry as well as adequate public company experience. Companies are required to have at least two independent directors. Public Distribution and Market Capitalization Minimum 1,000,000 free trading public shares. Minimum $10,000,000 held by public shareholders. 300 public shareholders each holding a board lot. Minimum $50,000,000 market capitalization. Minimum 1,000,000 free trading public shares. Minimum $4,000,000 held by public shareholders. 300 public shareholders each holding a board lot or more. Sponsorship Generally required. Not required. The listing requirements above must be met at the time of listing. Any funds raised or transactions closing concurrent with listing contribute to the company meeting the listing requirements. (1) G enerally includes companies engaged in hardware, software, telecommunications, data communications, information technology and new technologies that are not currently profitable or able to forecast profitability. (2) A pplicants should file a complete set of forecast financial statements covering the current and/or next fiscal year (on a quarterly basis). Forecasts must be accompanied by an independent auditor’s opinion that the forecast complies with the CICA Auditing Standards for future-oriented financial information. Applicants should have at least six months of operating history. (3) U nder certain circumstances, deferred development charges or other intangible assets can be included in net tangible asset calculations. (4) C ompanies with less than $2 million in net tangible assets may qualify for listing if the earnings and cash flow requirements for senior companies are met. (5) “ G&A” means general and administration expenses. (6) A quarterly projection of sources and uses of funds, for the relevant period, including related assumptions signed by the CFO must be submitted. Projection should exclude uncommitted payments from third parties or other contingent cash receipts. R&D issuers should exclude cash flows from future revenues. (7) E xceptional circumstances may justify granting of a listing, notwithstanding minimum requirements – generally an affiliation with established business and/or exceptionally strong financial position is required. (8) ( 7), as well as for granting Exempt status. Special purpose issuers are generally considered on an exceptional basis. (9) “ Advanced stage of development or commercialization,” generally restricted to historical revenues from the issuer’s current business or contracts for future sales. Other factors may also be considered. (10) O ther relevant factors may also be considered. The foregoing is a summary of the applicable listing requirements only. For detailed listing requirements, refer to the TSX Company Manual which is available at www.tsx.com.

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