On May 1, 2020, the Canadian Securities Administrators (CSA) issued a news release, announcing local blanket orders (Blanket Orders) for market participants in connection with meetings delayed as a result of the COVID-19 crisis. This relief is in addition to the relief announced March 23, 2020, by the CSA with
At the time of previous financial crises, the TSX Venture Exchange (TSXV) granted blanket relief to listed issuers from its $0.05 per share minimum pricing requirement for various share issuances. In response to the COVID-19 pandemic, with many TSXV issuers trading at less than $0.05, the TSXV issued a Bulletin on April 8, 2020 providing important relief (Temporary Relief) from certain requirements of the TSXV Corporate Finance Manual. In particular, the Temporary Relief removes in the specific cases set out below the TSXV’s $0.05 minimum price for share issuances by issuers whose “Market Price” is $0.05 or less, subject to a new minimum of $0.01, until September 30, 2020.
By way of background, a number of TSXV Policies, including Policy 4.1 Private Placements, incorporate the concepts of “Market Price” and “Discounted Market Price”. The terms are defined in TSXV Policy 1.1 Interpretation; “Market Price” is the last closing price of an issuer’s shares prior to the issuance of a news release or filing with the TSXV of Form 4A – Price Reservation Form for a share issuance, while “Discounted Market Price” is “Market Price” less maximum permitted discounts (for example, 25% if the closing price is up to $0.50), but subject in all cases to a minimum price per share of $0.05. This reflects a long-standing, fundamental rule of the TSXV – the TSXV does not permit shares to be issued from treasury at less than $0.05, so as to prevent excessive dilution.
Continue Reading Shades of Crises Past – The TSX Venture Exchange Provides Temporary Relief from the $0.05 Minimum Pricing Requirement
Timely Disclosure recently reported on the CSA’s previously announced and published local blanket orders (Blanket Orders) that provide a 45-day extension for periodic filings normally required to be made by market participants between March 23, 2020 and June 1, 2020. On April 3, 2020, the Canadian Securities Administrators (CSA) released CSA Staff Notice 51-360 (Staff Notice) which includes useful guidance for market participants wishing to avail themselves of the relief provided by the Blanket Orders.
The following is a summary of certain of the guidance in the Staff Notice. It is important for issuers to review the local Blanket Orders in their jurisdiction. Issuers who intend to rely on the exemptions in the Blanket Orders should consider their applicable corporate statute, stock exchange requirements and other obligations to provide disclosure materials, including financial statements under any existing contractual obligations, as well as the events of default, covenants and other terms of any contracts including debt instruments. Issuers should also review their ongoing corporate finance activities when considering reliance on the Blanket Orders.Continue Reading CSA Provides Guidance on Previously Announced Blanket Orders in Response to COVID-19