TSX Venture Exchange - PowerPoint PPT Presentation

1 / 38
About This Presentation
Title:

TSX Venture Exchange

Description:

... D&Os must disclose personal interests they have in any current or proposed transaction Management compensation must ... $0.7 M $101.1 M $3.1 M $623.2 M 201 ... – PowerPoint PPT presentation

Number of Views:202
Avg rating:3.0/5.0
Slides: 39
Provided by: jdi51
Category:

less

Transcript and Presenter's Notes

Title: TSX Venture Exchange


1
TSX Venture ExchangesSuccessful Market Model
  • Kevan Cowan
  • Senior Vice President
  • TSX Venture Exchange
  • Senior Vice President, Business Development
  • Toronto Stock Exchange
  • Presentation to COSRA SME Forum
  • May 15, 2006

2
Table of Contents
  • TSX Group Overview
  • TSX Venture Market Overview
  • TSX Venture Listing
  • TSX Venture Corporate Governance Model

Note This presentation is provided for
information purposes only. Neither TSX Group Inc.
nor any of its affiliated companies guarantees
the completeness of the information contained in
this presentation and we are not responsible for
any errors or omissions in or your use of, or
reliance on, the information.
3
TSX Group
45
  • Gas and electricity contract trading and clearing
  • 3rd largest in North America
  • Global Data Services
  • Marketplace Operator
  • Senior Listings Market
  • 1,500 listings
  • Technology Services
  • Venture Listings Market
  • 2,000 listings
  • Avg market cap lt16MM

50
18
Note As of December 31, 2005, excludes
NEX Source WFE, September 2005
4
TSX Group ranked 5th in the world by equity
capital raised
2004 Global Equity Capital Markets
Issuer
Deal Value
(US bn)
Share
Nationality
1
US
176.4
30.7
2
Japan
59.7
10.4
3
UK
37.4
6.5
4
France
32.7
5.7
5
Canada
5.4
31.1
6
Australia
4.5
25.9
7
Germany
25.3
4.4
8
Italy
21
3.7
9
China
18.3
3.2
10
Taiwan
15.4
2.7
Source Dealogic
5
TSX Group finances growth companies
6
Canadas diversified economy is reflected in the
market cap of our listed issuer base
Market Capitalization by Sector
at December 31, 2005
Toronto Stock Exchange
TSX Venture and NEX
100 1.83 Trillion
100 33.3 Billion
Structured Products sector includes 22 ETFs at
December 31, 2005.
7
TSX Group listings have been robust in a North
American context
TSX
TSX Venture
NYSE
NASDAQ
AMEX
New Cdn Listings
Total Listings
New Listings
Total Listings
New Foreign Listings
August 2005 annualized
8
TSX Groups issuer base is very strong in public
SMEs
Size Distribution of Listed Companies by Exchange
TSX Issuers 1537 US 1.6 T TSX Venture
Issuers 2020 US28.7 B Nasdaq Issuers 3164 US3.
6 T NYSE Issuers 2270 US13.3 T Amex Issuers
595 US86.3 B
As at December 31, 2005
9
TSX Venture finances early stage companies

2005 2005 2005
Listed Companies 201 2,020 1,537
Total Market Cap 623.2 M 33.34 B 1,830.7 B
Median Market Cap 0.7 M 4.8 M 143.9 M
Average Market Cap 3.1 M 16.5 M 1.2 B
Financings 101.1 M 6.06 B 46.16 B
Average Financing 0.7 M 2.6 M 58.1 M
Going Public Activity -- 259 223
Graduates 64 to TSX Venture 46 to TSX -
Includes IPOs, CPCs, RTOs, QTs, TSX comedowns
and Other
10
TSX Group supports capital formation and trading
at various stages of development
2005
2004
1,537 companies
1,421 companies
58 Grads
46 Grads
2
4
1,948 companies
2,020 companies
47 Grads
33 1 (re-list) 4 (TSX)
75 3
64 Grads
(from TSX)
261 companies
201 companies
5 to CNQ, 49 delist, 2 acquired, 2 to TSX
31 delist, 2 amalgamated 1 to CNQ
Source TSX Group analysis
11
Table of Contents
  • TSX Group Overview
  • TSX Venture Market Overview
  • TSX Venture Listing
  • TSX Venture Corporate Governance Model

Note This presentation is provided for
information purposes only. Neither TSX Group Inc.
nor any of its affiliated companies guarantees
the completeness of the information contained in
this presentation and we are not responsible for
any errors or omissions in or your use of, or
reliance on, the information.
12
Evolving a National Venture Exchange
  • Pre-Nov.99
  • Idea - Bring Together
  • 5 Junior Stock Markets
  • VSE
  • ASE
  • WSE
  • CDN
  • ME

Nov.99 Oct.01 Formation of CDNX Regional
offices Vancouver Calgary (HO) Winnipeg Toronto M
ontreal
Aug.01 Acquisition By TSX Regional
offices Vancouver Calgary (HO) Winnipeg Toronto M
ontreal
13
TSX Venture's Mission
To provide a quality, liquid and efficient
venture capital market for publicly traded
venture companies and their investors.
14
When More Capital is Required
TSX Venture Exchange provides emerging companies
with an alternative source of capital through
access to public funds
Financing Options
Private Equity - Venture Capitalists
Senior Markets - TSX - - Other -
  • Seed Money
  • Angel Investors -
  • Government -

Start-Up Company
Public Venture Capital - TSX Venture Exchange -
15
North America Stock Markets Continuum
Filling the gap
NYSE
TSX
Nasdaq
  • Senior listing standards
  • Disclosure rules
  • Junior listing standards

OTC BB
  • No listing standards

CNQ
Pink sheets
16
TSX Venture financing activity
6.06 B
4.15 B
2.38 B
1.44 B
17
TSX Venture volume, value trading
Source TSX Venture Review
18
TSX Venture graduates represent a significant
portion of new listings on TSX
Number of TSX Venture Graduates 2000-2005
  • Since 2000
  • 247 companies have graduated to TSX
  • 34 of these 247 graduates (85) started as CPCs
  • 45 companies have been merged/acquired by TSX
    companies

TSXV Graduates as of TSX New Listings
40 27 23 37 28 21
19
TSX Venture graduates have succeeded in the
senior market
28 Companies that started on TSXV are now in
SP/TSX Comp Index
TSXV Companies that have been merged/acquired
Aastra Technologies Limited Aber Diamond
Corporation AltaGas Income Trust Baytex Energy
Trust Boardwalk REIT Calloway REIT Crescent Point
Energy Trust Crystallex International
Corporation Daylight Energy Trust Ensign Energy
Services Inc. Esprit Energy Trust Fairborne
Energy Trust First Quantum Minerals Ltd. Glamis
Gold Ltd. Great Canadian Gaming
Corporation InterOil Corporation Intrawest
Corporation Niko Resources Ltd. Pan American
Silver Corp. Peyto Energy Trust Precision
Drilling Trust Progress Energy Trust QLT
Inc. Rider Resources Savanna Energy Services
Corp. Shore Gold Inc. Trilogy Energy
Trust Vermilion Energy Trust
Janna Systems - acquired by Siebel
Systems Diamond Fields Resources acquired by
Inco ALI Technologies acquired by
McKesson Arequipa Resources Ltd. acquired by
Barrick Diamet acquired by BHP Jordan Petroleum
acquired by Cypress Energy PetroKazakhstan
acquired by CNPC International Ryan Energy Tech
acquired by Nabors Inds. Triple G Systems Group
acquired by GE
20
Table of Contents
  • TSX Group Overview
  • TSX Venture Market Overview
  • TSX Venture Listing
  • TSX Venture Corporate Governance Model

Note This presentation is provided for
information purposes only. Neither TSX Group Inc.
nor any of its affiliated companies guarantees
the completeness of the information contained in
this presentation and we are not responsible for
any errors or omissions in or your use of, or
reliance on, the information.
21
The TSX Venture Niche
Commercial Stage
Stable Production
Project / Idea
RD or Prototype
Operating History
Private Equity Candidates
Pink Sheets/OTCbb
TSX Venture Candidates
TSX Candidates
NASDAQ Candidates
NYSE Candidates
22
Why List on TSX Venture
  • Financing range 500k to 20 million
  • Multiple financing rounds more ground-floor
    investing
  • opportunity
  • Acquisition currency
  • Employee stock options
  • Mentoring role
  • Stepping stone to senior markets streamlined
    graduation path
  • to TSX
  • Graduates leave with a track record

23
How to Go Public on TSX Venture
T S X V E N T U R E
Capital Pool Company (CPC)
24
Going Public Activity
264
259
237
223
208
25
Management Qualifications and Escrow
  • Management
  • Board must demonstrate satisfactory overall
  • business expertise
  • public company experience
  • Escrow
  • Management Commitment Length of required
    commitment longer for emerging companies because
    reliance is on management abilities rather than
    financial situation
  • Value The number of securities issued should
    correlate to the value of the asset or business
    being received

26
Our mentorship program assists listed issuers in
managing public company obligations
Venture Company Success Workshop
Essentials to Success Seminar
TSX Venture SUCCESS PROGRAM
TSX Venture Speaks
Rules Tools Workshop
Financial Reporting Series
Expanded Mentorship Program to 500 attendees in
each of 2004 and 2005
27
Minimum Listing Requirements Tier 1 Technology
or Industrial
Category 1 Category 2 Category 3
Net Tangible Assets (incl. IPO ) 1 M 5 M N/A
Earnings Before Tax 100,000 N/A 200,000
Working Capital 18 mos 18 mos 100K 18 mos
Publicly Held Shares 1 M 1 M 1 M
Public Market Capitalization 1 M 1 M 1 M
Number of Shareholders 200 200 200
Percentage Held by Public 20 20 20
RD MLR Similar to Category 2 but 1,000,000
in prior RD required and a 1,000,000 RD
program must be recommended.
28
Minimum Listing Requirements Tier 2 Technology
or Industrial
Category 1 Category 2
Net Tangible Assets (incl. IPO ) 500,000 750,000
Earnings Before Tax 50,000 N/A
Prior Expenditures or Revenue N/A 250,000
Working Capital 12 mos 12 mos 100K
Other N/A Sufficient testing to demonstrate commercial viability
Minimum IPO Price 0.15 0.15
Publicly Held Shares 500,000 500,000
Number of Shareholders 200 200
Percentage Held by Public 20 20
29
Both TSX and TSX Venture have quality standards
for public issuers layered on regulatory baselines
And they must meet our on-going standards to
maintain their listing
Issuers must meet our initial standards to list...
On-going Standards
Initial Standards
  • 3 M in revenue
  • 3 M in assets
  • 3 M in market cap

Toronto Stock Exchange
  • Earnings/projected earnings required
  • Cash flow/projected cash flow required
  • Qualified management
  • - Public company experience
  • Related business experience
  • Suitability
  • Adequate working capital
  • 12-18 months
  • Inverse relationship between net tangible assets
    and cash flow
  • Timely and on-going disclosure
  • Shareholder dilution limits
  • Qualified management
  • Changes in management must be approved/accepted
  • Revenue requirements
  • Continued public distribution
  • Compliance with timely disclosure standards

TSX Venture Exchange
  • Earnings not a requirement
  • Cash flow not a requirement
  • Adequate working capital
  • Positive pre-tax cash flow

Standards common to both exchanges
30
TSX Groups exchanges work with securities
commissions
31
Capital Pool Company (CPC) Program
  • Unique way to list, introduced in 1987
  • 1,585 listed since inception
  • 1,357 CPCs have completed qualifying transaction
    since 1987
  • More than 652 million raised in seed and IPO
    financings since 1987
  • 202 former CPCs now on senior exchange
  • 33 of TSX Venture Exchange graduates to Toronto
    Stock Exchange in 2005 were CPC issuers

Compiled by TSX Group Inc. as at December 2005
32
CPC Unique Listing Vehicle
IPO Process
33
Why/When a CPC
  • Alternative access to capital Retain higher
    ownership
  • Want to be public company (MA currency, stock
    options, visibility)
  • Greater flexibility, certainty and control in the
    process
  • Going public risk reduced

Company Wants/ Needs
  • Company is at too early a stage for a broadly
    distributed regular IPO
  • IPO market is not strong enough in general
  • VC financing is not viable or management prefers
    not to use
  • Market appears to reward growth business of
    target companys sector

Market Conditions
  • Management
  • Long term strategy to grow as a public company
  • Reasonable valuation Viable share structure
  • Investor support
  • Appropriate advisors (lawyer, broker, investment
    banker)

Critical Success Factors
34
CPC Process
Seed Financing and Prospectus
Identify Qualifying Transaction
File Disclosure Statement
Execute Business Plan IR Program
Public Offering
Prospectus Receipt
Trade as Venture Company
Close Transaction
Announce QT
Trade as CPC
24 Months Maximum
CPC Acquires Business (QT)
Public Financing and CPC Trades
Seed
Aftermarket and Growth
35
Table of Contents
  • TSX Group Overview
  • TSX Venture Market Overview
  • TSX Venture Listing
  • TSX Venture Corporate Governance Model

Note This presentation is provided for
information purposes only. Neither TSX Group Inc.
nor any of its affiliated companies guarantees
the completeness of the information contained in
this presentation and we are not responsible for
any errors or omissions in or your use of, or
reliance on, the information.
36
TSX Venture governance policy highlights
  • Directors officers (DOs) must submit
    personal information forms
  • TSX Venture does background checks on proposed
    DOs
  • TSX Venture can prohibit people, impose
    conditions on people or require that people with
    appropriate experience be added
  • Minimum 3 directors - 2 of whom must be
    independent, e.g., cannot be employees or senior
    officers
  • DOs must be knowledgeable of and comply with
    securities laws (including several corporate
    governance rules)
  • DOs must disclose personal interests they have
    in any current or proposed transaction
  • Management compensation must be approved by
    independent directors
  • Minimum 3 person audit committee - 2 of whom must
    be independent

37
TSX Venture compliance
  • Oversight of listed issuers
  • Monitor disclosure to ensure issuers comply,
    downgrade issuers as required
  • Review complaints
  • Analyze issuers corporate and financial
    information and recommend compliance action as
    needed
  • Interview and correspond with issuer management
    and advisors to facilitate compliance
  • Co-ordinate with regulators
  • Halt trading in shares when business activity
    warrants

38
For more information, please contact
Kevan Cowan Senior Vice President, Business
Development Toronto Stock Exchange Senior Vice
President TSX Venture Exchange 416-365-2207kevan.
cowan_at_tsx.com
Disclaimer This document is for information
purposes only and is not an invitation to
purchase securities listed on Toronto Stock
Exchange and/or TSX Venture Exchange or Natural
Gas Exchange. TSX Group Inc. and its affiliates
do not endorse or recommend any securities
discussed. Please seek professional advice to
evaluate specific securities. While the
information herein is collected and compiled with
care, neither TSX Group Inc. nor any of its
affiliated companies represents, warrants or
guarantees the accuracy or the completeness of
the information. You agree not to rely on the
information contained herein for any trading,
business or financial purpose. This information
is provided with the express condition, to which
by making use thereof you expressly consent, that
no liability shall be incurred by TSX Group Inc.
and/or any of its affiliates as a result of any
errors or inaccuracies herein or any use or
reliance upon this information.
Write a Comment
User Comments (0)
About PowerShow.com