8 Choosing a listing method There are a number of ways in which your company can list on TSX or TSXV. Once you decide which exchange is right for your company, you’ll choose the best method for your company to list: For private companies Initial Public Offering (IPO) An Initial Public Offering is when a private company offers shares for sale to the public for the first time through a listing on a stock exchange. In an IPO, your company prepares a prospectus, which is filed with and must be approved by the relevant securities commission(s). The prospectus provides potential investors with all the detailed information they need to make an informed investment decision. Prospectus requirements are detailed in Canadian securities laws and regulations. If your company is applying to list on either Exchange via an IPO, you must file a copy of the preliminary prospectus together with a Listing Application in draft form (see Chapter 4 or Chapter 5 as applicable). Reverse Takeover (RTO)/Reverse Merger Another way to list your company is through a reverse take-over (also known as a back door listing or reverse merger) of an issuer already listed on TSX, TSXV or NEX (NEX is a market that lists of relatively inactive or “shell” companies). In effect, an RTO permits private company shareholders to buy a listed company with a smaller business, or in other cases, a failed business (a shell). This can be done in a number of ways, including an amalgamation of your company and the shell company, or an issuance of shares in exchange for other shares or assets of the issuer. As a result, the private company becomes the successor business that operates the public company. You will need the help of your company’s sponsor/advisor/banker, lawyer and auditor to find a suitable candidate for an RTO. The company resulting from the RTO must meet the initial listing requirements of TSX or TSXV, and must go through the same approval procedure as an original listing application. NEX For more information on NEX as a source of listed shell companies, please visit www.tmx.com/en/nex/ TSX TSXV IPO QT with CPC QA with SPAC RTO Direct Listing
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