TSXV issues notice regarding waivers of Shareholder Approval Requirement for certain Reverse Takeovers and Changes of Business

The TSXV has provided guidance on the specific circumstances in which it may be amenable to waiving the shareholder approval requirement for a particular Reverse Takeover or Change of Business.  The following key factors will be taken into account by the Exchange in assessing any such waiver application:

1.      Arm’s Length Transaction: The Exchange will not waive the shareholder approval requirement for a Reverse Takeover or Change of Business if the transaction is a Related Party Transaction or if other circumstances exist which may, in the Exchange’s view, compromise the independence of the Issuer or other interested parties (in particular the Issuer’s directors and officers) with respect to the transaction.

2.      Inactive Issuer: The Exchange will not waive the shareholder approval requirement for a Reverse Takeover or Change of Business unless the Issuer is without active operations. For these purposes, the Exchange will generally consider the following Issuers to be without active operations:

(a)    Issuers listed on the NEX Board or on notice to be transferred to the NEX Board.

(b)    Tier 1 and Tier 2 Issuers that do not satisfy the Tier 2 Continued Listing Requirement for “Activity” for the Issuer’s industry segment but have not yet been put on notice to be transferred to the NEX Board. Refer to section 2.1 of Policy 2.5 – Continued Listing Requirements and Inter-Tier Movement.

(c)    Tier 1 and Tier 2 Issuers that otherwise satisfy the Exchange that they are without active operations based upon, without limitation, the extent of their business operations over the previous 12 to 24 months, the state of their current asset base and prospects for returning to active operations based on such asset base.

3.      Good Standing: The Exchange will not waive the shareholder approval requirement for a Reverse Takeover or Change of Business if the Issuer is subject to a cease trade order or is otherwise suspended from trading.

The full TSXV Bulletin on the subject is available here.

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