U.S. Companies - 2023 Guide to Listing

2023 GUIDE TO LISTING 2023 GUIDE TO LISTING 18 19 LISTING CHECKLIST FOR U.S. COMPANIES REASON Does your company have a reason to be public and take advantage of the benefits of being a public company? Reasons to go public as a high growth company: Access to permanent capital with the ability to go back to the market for subsequent rounds Ability to facilitate growth by using public shares as acquisition currency versus direct cash offerings Diversify shareholder base and flatten cap table (public shareholders typically hold common versus preferred shares) Provide a path to liquidity for early investors and employees Create an incentive mechanism for employees Take advantage of an alternative to private venture capital with the potential to maintain greater control Increase visibility and prestige by being listed on a recognized stock exchange REQUIREMENTS Does your company meet the listing requirements of the Exchange (TSXV or TSX)? See the full listing requirements by sector in Section 7. FOR TSXV Company stage: if pre-revenue, have 12-24 months of working capital (can come from the capital raise) Audited financials: 2 years (IFRS compatible) Company history: adequate experience relevant to the business Public distribution: 200 public shareholders FOR TSX Company stage: $7.5M in net tangible assets OR minimum $10M in treasury OR two years of R&D expenditure capital Audited financials: 3 years (IFRS compatible) Company history: adequate experience relevant to the business as well as history of operations Public distribution: 300 public shareholders Reasons for a U.S. company to go public in Canada: An alternative path to a U.S. exchange, taking advantage of the Multi-Jurisdiction Disclosure System (MJDS) for streamlined dual listing Potential to delay SEC registration and reduce the cost of U.S. compliance while complying with Canadian securities regulations Access to pools of capital in Canada, the U.S. and globally Potential investor interest for new companies similar in size and/or sector to those already listed Directors & Officers (D&O) insurance can potentially be less expensive than for public companies in the U.S. Efficient access to the Canadian short form and base shelf prospectus system which could make it easier to access subsequent capital READY Is your company ready to go and be public? Do you have the required team and infrastructure in place? Management team is interested and ready to go public, including a CFO with public company experience A formal board of directors that understands its legal and fiduciary responsibilities as public company directors Audited financial statements are required Internal and financial controls, as well as a reporting infrastructure that complies with regulatory requirements An understanding of the time that senior management will need to spend on communicating with current and potential investors Comfortable with transparency, as the company’s financial information will become public to everyone, including competitors Understanding of share structure and evidence of value requirements for listing (discuss with legal counsel and/or Exchange staff) Going public team: Canadian securities lawyer with cross-border transaction experience U.S. securities lawyer Auditing firm with IFRS capabilities Lead Canadian investment banker Capital Pool Company or shell (if applicable) Canadian investor relations expertise REALITY Is there investor interest for your type and size of company in current market conditions? Is going public in Canada realistic for your company? Investor interest: Can Canadian investment bankers get investor support for your type and size of company in current market conditions? Structure: Does becoming a public company regulated as a Canadian reporting issuer and subject to continuous disclosure requirements of Canadian securities law allow for cost savings compared to pursuing full registration with the SEC in the U.S.? Tax: What are the potential tax consequences for shareholders and the company? Valuation: Is it possible to get a reasonable and attractive valuation in current market conditions compared to private markets or U.S. public markets? Growth strategy: Does going public in Canada fit with your long-term growth strategy including, if applicable, to eventually list on a U.S. exchange?