In June 2022, the TSX Venture Exchange (“TSXV” or “Exchange”) introduced its Venture Forward initiative, aimed at providing alternative pathways to listing on the Exchange to issuers with unique or non-traditional businesses, or issuers looking to undertake creative transaction structures.

Venture Forward, driven by a commitment to expansion and modernization, seeks to eliminate certain of the barriers to accessing capital while capitalizing on emerging opportunities. In keeping with this approach, the Exchange unveiled its Sandbox platform (“Sandbox”) on May 13, 2024.

Sandbox is a central component of the broader Venture Forward initiative and aims to offer additional avenues for new issuers and investors to tap into Canadian capital markets. It allows for the Exchange to consider unique listing proposals or novel listing transaction structures that may not meet the existing TSXV listing requirements. As of May 13, 2024, Sandbox is open for issuers to bring forward new listing proposals.

KEY FEATURES OF SANDBOX

1. No predetermined eligibility criteria: Issuers that pursue listing via Sandbox are not bound by predetermined eligibility criteria. Each application will be evaluated individually, considering the specific aspects of the issuer’s business and/or the specific merits of the proposed listing transaction structure.
2. Different from the current listing process: Unlike the standard TSXV listing process, where minor waivers on traditional listing requirements are granted at the discretion of the TSXV, Sandbox offers greater flexibility in waiving or modifying listing requirements based on a comprehensive review of the issuer’s business and listing proposal.
3. Application process: Issuers who believe that traditional listing requirements (of the TSXV or other stock exchanges) are unsuitable for their circumstances can explore listing opportunities under Sandbox.
4. No additional listing fees: Sandbox applicants are subject only to the standard TSXV listing fees; there are no additional fees that are specific to Sandbox applications.
5. Tailored exit procedure: Sandbox issuers work with the TSXV to establish customized exit conditions based on their circumstances, generally exiting Sandbox within 12 months of listing.
6. Available for new listings and transactions: Sandbox is available for new listings and listing transactions (including Qualifying Transactions and Reverse Takeovers), but is not currently available to issuers already listed on the TSXV that are pursuing secondary transactions (i.e., private placements, other acquisitions or dispositions).
7. Sandbox oversight: Special conditions may be imposed at the discretion of the TSXV to facilitate Sandbox listings, such as enhanced disclosure requirements, restrictions on security-based compensation, or a distinct escrow regime.
8. Benefits of Sandbox: Sandbox enhances flexibility in listing reviews, allowing exploration of unique business models and unconventional transaction structures, fostering collaboration, and underscoring the TSXV’s openness to innovation and modernization.
9. Tier 2 Listings: Issuers that accomplish listing via Sandbox are treated as Tier 2 TSXV issuers, subject to all Tier 2 requirements. While Sandbox issuers will not be treated differently than other TSXV issuers with regards to symbol extensions (i.e. unlike NEX issuers or Capital Pool Companies, Sandbox issuers will not receive a different symbol extension due to being a Sandbox issuer), Sandbox issuers will be required to identify themselves as a Sandbox issuer in all public disclosure documents
10. Support for traditional listing applications: The TSXV may consider traditional listing applications under Sandbox criteria if issues arise during the standard process.

Sandbox reflects the TSXV’s efforts to encourage innovation and diversity in Canada’s public venture ecosystem, potentially opening up new avenues for emerging issuers to access capital.

Further Information

For further information on the TSXV Sandbox program, visit: https://www.tsx.com/listings/tsx-and-tsxv-issuer-resources/tsx-venture-exchange-issuer-resources/tsxv-sandbox?lang=en

For assistance with regards to the Sandbox program or any other stock exchange listing matters, please contact us at Maxis Law Corporation: https://maxislaw.com/