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MaRS Best Practices
Series
Special
Valuation
Series
Nov. 12th, 2010
MaRS Best Practices
Special Valuation Series
Friday Nov 19th
12:00-1:30pm
Tim Babcock
Director, Listed Issuer Services
TSX Venture Exchange
Rupert Merer
Energy Technology Research Analyst
National Bank Financial (NBF)
Speakers:
More information and registration at
www.marsdd.com/bestpractices
MaRS
Tim Babcock, Director, Listed Issuer Services
TSX Venture Exchange
November 19, 2010
A Capital Opportunity for Clean Technology Companies
Listing on Toronto Stock Exchange and TSX Venture Exchange
3
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. TMX Group Inc. and its affiliates do not endorse or recommend any securities
referenced in this document. Please seek professional advice to evaluate specific securities.
While the information herein is collected and compiled with care, neither TMX 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 TMX 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.
© 2010 TMX Group Inc.
4
1.  TSX and TSXV – The 3 Minute Overview
2.  The Clean Technology Sector
3.  Structure Tools for Entrepreneurial Finance
4.  Case Studies
Outline
5
(53.8% Ownership)
(47% Ownership)
(19.9% Ownership)
Data 
Energy 
Deriva-ves 
Fixed Income 
Equi-es 
•  Canada’s financial system has
been ranked as the soundest in
the world for two years in a row
by the World Economic Forum
•  Lowest debt-to-GDP among G7
•  Relatively strong financial
position:
– 12 years of surpluses
1998-2009
•  Significant resource base
Strong fundamentals in Canada
TMX Group is a Multi-Asset Class Market Leader
(51% Ownership)
6
General Conditions YTD September 2010: Key Markets
TSX/TSXV LSE/AIM
NYSE/AMEX
Euronext (US)
Nasdaq ASX
Hong Kong
Exchanges
Number of Issuers
Listed
3,628 2,978 2,314 2,805 1,966 1,365
Quoted Market Value
(US$ Billions)
1,867.6 3,467.6  12,278.4 3,480.7 1,318.6 2,536.0
New Listings 370 113 78 157 69 58
Equity Capital Raised
(US$ Billions)
32.6 41.1 66.9 4.7* 25.4 42.8
Value Traded
(US$ Billions)
993.2 2,123.3 13,794.6 9,998.0 786.1 1,027.6
Broad Stock Market
Indexes (%Change
over Sept 30 2009)
8.5% 8.9% 5.4% 11.6% -2.2% 7.0%
*NASDAQ Information does not include secondary financings
Source: Exchange Websites, World Federation of Exchanges, (TMX analysis of public information)
7
TMX Group’s Equity Exchanges Support a Diverse Issuer Base
Number of Issuers by Sector
Includes issuers on Toronto Stock Exchange and TSX Venture Exchange (100% = 3628)
As at September 30 2010
8
Access to Capital: 2009 was an all time record year
for financing on TSX
*TSX Venture Exchange commenced operations on November 29 1999
Toronto Stock Exchange and TSX Venture Exchange
Total Financings (C$Billions) 1999 – 2010 September
9
2,143 companies
27 graduates in YTD Sept 2010
20 graduates in 2009
45 graduates in 2008
1,485 companies
TSX Venture Exchange
•  Access to capital for earlier stage companies
or smaller financings
•  Total market cap of $48.5 Billion & average
market cap of $22.6MM
•  Cost effective stepping stone for international
companies looking to list on a quality North
American market
•  Exchange mandate to mentor management of
newly public companies
•  Streamlined graduation to TSX when senior
market requirements are met
•  103 year history
Toronto Stock Exchange
•  Senior market for well established
businesses and management teams with
experience in public markets
•  Total market cap of $1.9 Trillion & average
market cap of $1.3B
•  30% of TSX issuers >$500M are interlisted
on a US exchange
•  Access to larger, more international
institutional investors and greater analyst
coverage
•  Globally visible specialized indices
•  157 year history
Unique Equity Market Structure
10
TMX Group Serves Companies at all Stages of Growth
Market Capitalization
Toronto Stock Exchange and TSX Venture Exchange
Unique feeder system
478
graduates
+ 93 M&A*
*From January 1, 2000 – September 30, 2010
10
Toronto Stock Exchange issuer base: 1,485 issuers, ~$1.9 trillion market cap
TSX Venture Exchange issuer base (excludes NEX): 2,143 issuers, ~$48.5 billion market cap
As at September 30, 2010
473
Issuers
549
Issuers
463
Issuers
1922
Issuers 191
30
Issuers
11
TMX Group Global Leadership Strengths
All data is as of or YTD September 30, 2010
1480 issuers
55% of the world’s public
mining companies
140 going public events
$9.8 B equity raised
$305 B value traded
128 issuers
Number one in the world by
number of public clean
technology companies
8 going public events
$1.1 B equity raised
$7.6 B value traded
3628 issuers
370 going public events
$33.7 B equity raised
Average Financing:
TSX $51.9 M
TSXV $3.5 M
468 issuers
Over 35% of the world’s
public oil and gas companies
44 going public events
$8.2 B equity raised
$204 B value traded
Mining
Energy & Energy Services
Clean Technology
12
1.  TSX and TSXV – The 3 Minute Overview
2.  The Clean Technology Sector
3.  Structure Tools for Entrepreneurial Finance
4.  Case Studies
Outline
13
Clean Technology Market on TSX and TSXV
128
Companies
30% of TSX Issuers
in the Sector
Graduated TSXV
$17B
Total Market Cap
$1.1B
Equity Capital Raised
As at and YTD Sept 30 2010
8
New Listings
14
Clean Technology Financing by Subsector
As at and YTD Sept 30 2010
Of the $1B+ in equity capital raised year to date this is how the funds have broken down by 
subsector on TSX ($943M) and TSXV ($152M)  
15
Strong Growth in Key Market Metrics
Analyst Coverage
Avg. Analyst Coverage for Clean Technology 
Companies by Market Cap 
Strong analyst coverage combined with growth in trading and liquidity provides posiMve 
market fundamentals for Clean Technology companies to finance and grow.  
Market Capitalization (C$ Millions)
150-500 >100050-150<50 500-1000
Source: Capital IQ, June 2010
Volume of Shares Traded
Millions of Shares Traded in the Clean Technology Sector 
2005 20092007 20082006
16
TSX Venture 50® - Clean Technology Top 10
TOP 10 CLEAN TECHNOLOGY COMPANIES
341%
One-year Average Market Cap Growth
236%
Average ROI in 2009
542 Million
Volume of Shares Traded in 2009
2
Average number of analysts covering the Top 10
TSX Venture 50® is
a ranking of strong performers on TSX
Venture Exchange.
These emerging companies have seen
tremendous growth over the past year,
offered remarkable return to their
shareholders, are actively traded in the
market and are well-covered by the
analyst community. In short, they have
proven themselves to be the rising stars of
Canada's public markets.
17
CONSTITUENTS
Algonquin Power & Utilities
Corp. (AQN)
ATS Automation Tooling Systems
Inc. (ATA)
Azure Dynamics Corporation (AZD)
Ballard Power Systems Inc. (BLD)
Boralex Inc. (BLX)
Boralex Power Income Fund (BPT.UN)
Brookfield Renewable Power
Fund (BRC.UN)
Burcon NutraScience Corporation (BU)
Cascades Inc. (CAS)
Capital Power Income LP (CPA.UN)
5N Plus Inc. (VNP)
Westport Innovations Inc. (WPT)
S&P/TSX Clean Technology Index
Launched in
March 2010
The S&P/TSX Clean
Technology Index
Measures the
performance of
companies listed on
TSX that generate
upwards of 50% of
their revenue from
products or services
focused on reducing
or eliminating
negative ecological
impacts, while at the
same time
improving the
productive and
responsible use of
natural resources.
GLV Inc. (GLV.A)
Innergex Renewable Energy Inc. (INE)
Macquarie Power & Infrastructure Income
Fund (MPT.UN)
Magma Energy Corp (MXY)
Newalta Corporation (NAL)
Northland Power Income Fund (NPI.UN)
Plutonic Power Corporation (PCC)
Ram Power Corp. (RPG)
RuggedCom Inc. (RCM)
Tembec Inc. (TMB)
WaterFurnace Renewable Energy Inc.
(WFI)
18
1.  TSX and TSXV – The 3 Minute Overview
2.  The Clean Technology Sector
3.  Structure Tools for Entrepreneurial Finance
4.  Case Studies
Outline
19
Benefits of Going Public
Access capital and
future financing
opportunities
Facilitate
growth
Increase visibility
and prestige
Provide liquidity
for shareholders
Create employee
incentive
mechanism
20
Methods for Going Public on Toronto Stock Exchange
or TSX Venture Exchange
21
Capital Pool Company™ (CPC) Program has a Strong Track Record
Since inception:
• Over 2095 CPCs were created
• 80% have completed their QT – over
1660 companies
• 332 TSXV Graduates now trade on TSX
• 96 of the grads were CPCs
• 7 of 9 new Clean Technology listings in
2009 were QTs
• A new clean CPC shell has none of the
hidden costs of a shell with previous
operating history
22
Benefits of the CPC Program for Small Companies
1.  Cash on the Balance Sheet;
2.  Potential to identify Directors and Long-term Investors;
3.  At least 200 Public Shareholders to create liquidity;
4.  Listing Process can be faster and less costly.
23
CPC Acquires
Business (QT)
Public Financing and
CPC Trades
Seed
24 Months Maximum
Capital Pool Company: Process
Aftermarket and
Growth
24
24
Seed Financing
•  seed financing of the company by 3-5 Founders/Directors
CPC IPO
•  a prospectus offering to create a corporate vehicle with
public distribution
Qualifying Transaction (QT)
•  a target business is identified, disclosed and acquired
Aftermarket and Growth
•  company trades and executes its business plan
Capital Pool Company: Milestones
25
25
CPC Acquires
Business (QT)
Public Financing
and CPC TradesSeed
24 Months Maximum
Qualifying Transaction
26
26
Considerations for a Qualifying Transaction:
•  Significant growth opportunity & reason to be public
•  Strong & coachable management
•  Capital needs: $2+ Million
•  Close to or at commercialization
•  Meets minimum listing and audit requirements
•  Stock options and acquisition currency
•  Strong market appetite
•  12 to 18 month cash requirements (can be financed)
Selecting a QT Candidate
27
27
Consider this…
Success Factors:
•  Lots of cash on closing
•  Market interest and
understanding
•  Deliver in short term post
closing
•  Reasonable valuation – not
always maximum valuation
Potential Pitfalls:
•  Listing requirements shortfalls
•  Insufficient cash/working
capital on closing
•  Valuation versus escrow
regime (TSXV Policy 5.4)
•  PIFs - timing and impact on
circular
28
28
CPC Acquires
Business (QT)
Public Financing
and CPC TradesSeed
24 Months Maximum
Aftermarket and Growth
Aftermarket
and Growth
29
29
Consider this…
Success Factors:
•  Press release clarity / quality
•  Broker management and
support
•  Timely disclosure against
published milestones (good
and bad)
Potential Pitfalls:
•  Orphan status
•  Mistrust of management’s
willingness to communicate
•  Market fluctuations
30
Toronto Stock Exchange and TSX Venture Exchange listing
fees are competitive
Min and Max Initial Fees (C$000s)
*There is no maximum fee. Market cap of $1B was used for illustration purposes
**NYSE has a USD $500,000 cap on listing fees per issuer, per year
***Does not include NOMAD fees
NB: For international companies, TSX initial listing fees max out at $150K
Source: TSX analysis of exchange listing fee documents.
As at August 25, 2010
79
42
Min and Max Sustaining Fees (C$000s)
31
TSX and TSX Venture Exchange Estimated Listing Costs
Toronto Stock Exchange TSX Venture Exchange
Listing Fees $10,000 - $200,000 $7,500 - $40,000
Accounting and Auditing Fees $75,000 - $100,000 $25,000 - $100,000
Legal Fees $400,000 - $750,000 $75,000+
Underwriter’ commission 4 – 6% Up to 12%
Other fees to consider include:
•  Securities Commissions fee
•  Transfer agency fees
•  Investor relations costs
•  Geological or engineering reports
•  Printing and translation costs
•  Valuation reports
•  Director and Officer liability insurance
32
1.  TSX and TSXV – The 3 Minute Overview
2.  The Clean Technology Sector
3.  Structure Tools for Entrepreneurial Finance
4.  Case Studies
Outline
33
BioExx Specialty Proteins Ltd.
Technology company focused on the extraction of oil and high-value proteins from
oilseeds for the global food market.
#1 Ranked Clean Technology Company and “Pick of the Street” - 2010 Venture 50TM
Date of Listing Graduated from TSX Venture Exchange to Toronto Stock Exchange on January 22, 2010
Market
Capitalization
$273.1 million as of June 30, 2010
Analyst Coverage 7 Canadian Analysts / 1 US Analyst (Source: CapitalIQ)
Financing, Price &
Trading Volume
History
(Sept’06 – June’10)
*(Source: Capital IQ)
BXI 
34
Catch the Wind
Based in Manassas, Virginia, Catch the Wind develops, manufactures, and sells laser
based wind sensor systems for the wind power generation industry in the United States.
One of the Top 10 Clean Technology companies – 2010 Venture 50TM
Date of Listing
Listed on TSX Venture Exchange through the CPC Program on April 3, 2007
Completed Qualifying Transaction on September 23, 2008
Financings
$5.2 million by Private Placement in April 2010
$21.8 million by Private Placement in May 2009
$15.7 million raised at time of Qualifying Transaction in September 2008
Market
Capitalization
$86.3 Million as of June 30, 2010 based on 57.5 million shares outstanding
Analyst Coverage 4 Canadian Analysts (Source: Capital IQ)
Price and Trading
Volume
(Sept’08 – June’10)
*(Source: Capital IQ)
CTW 
35
China
Annie Tao
416 947-4273
annie.tao@tmx.com
Diversified Industries
Raymond King
416 947-4675
raymond.king@tmx.com
United States
Tala Zarbafi
416 947-4636
tala.zarbafi@tmx.com
Energy
Cindy Gray
403 218-2822
cindy.gray@tmx.com
Mining
Greg Ferron
416 947-4477
greg.ferron@tmx.com
Clean Technology
Robert Peterman
416 947-4305
robert.peterman@tmx.com

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MaRS Best Practices: Valuations in the cleantech Industry - Tim Babcock

  • 1. MaRS Best Practices Series Special Valuation Series Nov. 12th, 2010 MaRS Best Practices Special Valuation Series Friday Nov 19th 12:00-1:30pm Tim Babcock Director, Listed Issuer Services TSX Venture Exchange Rupert Merer Energy Technology Research Analyst National Bank Financial (NBF) Speakers: More information and registration at www.marsdd.com/bestpractices
  • 2. MaRS Tim Babcock, Director, Listed Issuer Services TSX Venture Exchange November 19, 2010 A Capital Opportunity for Clean Technology Companies Listing on Toronto Stock Exchange and TSX Venture Exchange
  • 3. 3 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. TMX Group Inc. and its affiliates do not endorse or recommend any securities referenced in this document. Please seek professional advice to evaluate specific securities. While the information herein is collected and compiled with care, neither TMX 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 TMX 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. © 2010 TMX Group Inc.
  • 4. 4 1.  TSX and TSXV – The 3 Minute Overview 2.  The Clean Technology Sector 3.  Structure Tools for Entrepreneurial Finance 4.  Case Studies Outline
  • 5. 5 (53.8% Ownership) (47% Ownership) (19.9% Ownership) Data  Energy  Deriva-ves  Fixed Income  Equi-es  •  Canada’s financial system has been ranked as the soundest in the world for two years in a row by the World Economic Forum •  Lowest debt-to-GDP among G7 •  Relatively strong financial position: – 12 years of surpluses 1998-2009 •  Significant resource base Strong fundamentals in Canada TMX Group is a Multi-Asset Class Market Leader (51% Ownership)
  • 6. 6 General Conditions YTD September 2010: Key Markets TSX/TSXV LSE/AIM NYSE/AMEX Euronext (US) Nasdaq ASX Hong Kong Exchanges Number of Issuers Listed 3,628 2,978 2,314 2,805 1,966 1,365 Quoted Market Value (US$ Billions) 1,867.6 3,467.6  12,278.4 3,480.7 1,318.6 2,536.0 New Listings 370 113 78 157 69 58 Equity Capital Raised (US$ Billions) 32.6 41.1 66.9 4.7* 25.4 42.8 Value Traded (US$ Billions) 993.2 2,123.3 13,794.6 9,998.0 786.1 1,027.6 Broad Stock Market Indexes (%Change over Sept 30 2009) 8.5% 8.9% 5.4% 11.6% -2.2% 7.0% *NASDAQ Information does not include secondary financings Source: Exchange Websites, World Federation of Exchanges, (TMX analysis of public information)
  • 7. 7 TMX Group’s Equity Exchanges Support a Diverse Issuer Base Number of Issuers by Sector Includes issuers on Toronto Stock Exchange and TSX Venture Exchange (100% = 3628) As at September 30 2010
  • 8. 8 Access to Capital: 2009 was an all time record year for financing on TSX *TSX Venture Exchange commenced operations on November 29 1999 Toronto Stock Exchange and TSX Venture Exchange Total Financings (C$Billions) 1999 – 2010 September
  • 9. 9 2,143 companies 27 graduates in YTD Sept 2010 20 graduates in 2009 45 graduates in 2008 1,485 companies TSX Venture Exchange •  Access to capital for earlier stage companies or smaller financings •  Total market cap of $48.5 Billion & average market cap of $22.6MM •  Cost effective stepping stone for international companies looking to list on a quality North American market •  Exchange mandate to mentor management of newly public companies •  Streamlined graduation to TSX when senior market requirements are met •  103 year history Toronto Stock Exchange •  Senior market for well established businesses and management teams with experience in public markets •  Total market cap of $1.9 Trillion & average market cap of $1.3B •  30% of TSX issuers >$500M are interlisted on a US exchange •  Access to larger, more international institutional investors and greater analyst coverage •  Globally visible specialized indices •  157 year history Unique Equity Market Structure
  • 10. 10 TMX Group Serves Companies at all Stages of Growth Market Capitalization Toronto Stock Exchange and TSX Venture Exchange Unique feeder system 478 graduates + 93 M&A* *From January 1, 2000 – September 30, 2010 10 Toronto Stock Exchange issuer base: 1,485 issuers, ~$1.9 trillion market cap TSX Venture Exchange issuer base (excludes NEX): 2,143 issuers, ~$48.5 billion market cap As at September 30, 2010 473 Issuers 549 Issuers 463 Issuers 1922 Issuers 191 30 Issuers
  • 11. 11 TMX Group Global Leadership Strengths All data is as of or YTD September 30, 2010 1480 issuers 55% of the world’s public mining companies 140 going public events $9.8 B equity raised $305 B value traded 128 issuers Number one in the world by number of public clean technology companies 8 going public events $1.1 B equity raised $7.6 B value traded 3628 issuers 370 going public events $33.7 B equity raised Average Financing: TSX $51.9 M TSXV $3.5 M 468 issuers Over 35% of the world’s public oil and gas companies 44 going public events $8.2 B equity raised $204 B value traded Mining Energy & Energy Services Clean Technology
  • 12. 12 1.  TSX and TSXV – The 3 Minute Overview 2.  The Clean Technology Sector 3.  Structure Tools for Entrepreneurial Finance 4.  Case Studies Outline
  • 13. 13 Clean Technology Market on TSX and TSXV 128 Companies 30% of TSX Issuers in the Sector Graduated TSXV $17B Total Market Cap $1.1B Equity Capital Raised As at and YTD Sept 30 2010 8 New Listings
  • 14. 14 Clean Technology Financing by Subsector As at and YTD Sept 30 2010 Of the $1B+ in equity capital raised year to date this is how the funds have broken down by  subsector on TSX ($943M) and TSXV ($152M)  
  • 15. 15 Strong Growth in Key Market Metrics Analyst Coverage Avg. Analyst Coverage for Clean Technology  Companies by Market Cap  Strong analyst coverage combined with growth in trading and liquidity provides posiMve  market fundamentals for Clean Technology companies to finance and grow.   Market Capitalization (C$ Millions) 150-500 >100050-150<50 500-1000 Source: Capital IQ, June 2010 Volume of Shares Traded Millions of Shares Traded in the Clean Technology Sector  2005 20092007 20082006
  • 16. 16 TSX Venture 50® - Clean Technology Top 10 TOP 10 CLEAN TECHNOLOGY COMPANIES 341% One-year Average Market Cap Growth 236% Average ROI in 2009 542 Million Volume of Shares Traded in 2009 2 Average number of analysts covering the Top 10 TSX Venture 50® is a ranking of strong performers on TSX Venture Exchange. These emerging companies have seen tremendous growth over the past year, offered remarkable return to their shareholders, are actively traded in the market and are well-covered by the analyst community. In short, they have proven themselves to be the rising stars of Canada's public markets.
  • 17. 17 CONSTITUENTS Algonquin Power & Utilities Corp. (AQN) ATS Automation Tooling Systems Inc. (ATA) Azure Dynamics Corporation (AZD) Ballard Power Systems Inc. (BLD) Boralex Inc. (BLX) Boralex Power Income Fund (BPT.UN) Brookfield Renewable Power Fund (BRC.UN) Burcon NutraScience Corporation (BU) Cascades Inc. (CAS) Capital Power Income LP (CPA.UN) 5N Plus Inc. (VNP) Westport Innovations Inc. (WPT) S&P/TSX Clean Technology Index Launched in March 2010 The S&P/TSX Clean Technology Index Measures the performance of companies listed on TSX that generate upwards of 50% of their revenue from products or services focused on reducing or eliminating negative ecological impacts, while at the same time improving the productive and responsible use of natural resources. GLV Inc. (GLV.A) Innergex Renewable Energy Inc. (INE) Macquarie Power & Infrastructure Income Fund (MPT.UN) Magma Energy Corp (MXY) Newalta Corporation (NAL) Northland Power Income Fund (NPI.UN) Plutonic Power Corporation (PCC) Ram Power Corp. (RPG) RuggedCom Inc. (RCM) Tembec Inc. (TMB) WaterFurnace Renewable Energy Inc. (WFI)
  • 18. 18 1.  TSX and TSXV – The 3 Minute Overview 2.  The Clean Technology Sector 3.  Structure Tools for Entrepreneurial Finance 4.  Case Studies Outline
  • 19. 19 Benefits of Going Public Access capital and future financing opportunities Facilitate growth Increase visibility and prestige Provide liquidity for shareholders Create employee incentive mechanism
  • 20. 20 Methods for Going Public on Toronto Stock Exchange or TSX Venture Exchange
  • 21. 21 Capital Pool Company™ (CPC) Program has a Strong Track Record Since inception: • Over 2095 CPCs were created • 80% have completed their QT – over 1660 companies • 332 TSXV Graduates now trade on TSX • 96 of the grads were CPCs • 7 of 9 new Clean Technology listings in 2009 were QTs • A new clean CPC shell has none of the hidden costs of a shell with previous operating history
  • 22. 22 Benefits of the CPC Program for Small Companies 1.  Cash on the Balance Sheet; 2.  Potential to identify Directors and Long-term Investors; 3.  At least 200 Public Shareholders to create liquidity; 4.  Listing Process can be faster and less costly.
  • 23. 23 CPC Acquires Business (QT) Public Financing and CPC Trades Seed 24 Months Maximum Capital Pool Company: Process Aftermarket and Growth
  • 24. 24 24 Seed Financing •  seed financing of the company by 3-5 Founders/Directors CPC IPO •  a prospectus offering to create a corporate vehicle with public distribution Qualifying Transaction (QT) •  a target business is identified, disclosed and acquired Aftermarket and Growth •  company trades and executes its business plan Capital Pool Company: Milestones
  • 25. 25 25 CPC Acquires Business (QT) Public Financing and CPC TradesSeed 24 Months Maximum Qualifying Transaction
  • 26. 26 26 Considerations for a Qualifying Transaction: •  Significant growth opportunity & reason to be public •  Strong & coachable management •  Capital needs: $2+ Million •  Close to or at commercialization •  Meets minimum listing and audit requirements •  Stock options and acquisition currency •  Strong market appetite •  12 to 18 month cash requirements (can be financed) Selecting a QT Candidate
  • 27. 27 27 Consider this… Success Factors: •  Lots of cash on closing •  Market interest and understanding •  Deliver in short term post closing •  Reasonable valuation – not always maximum valuation Potential Pitfalls: •  Listing requirements shortfalls •  Insufficient cash/working capital on closing •  Valuation versus escrow regime (TSXV Policy 5.4) •  PIFs - timing and impact on circular
  • 28. 28 28 CPC Acquires Business (QT) Public Financing and CPC TradesSeed 24 Months Maximum Aftermarket and Growth Aftermarket and Growth
  • 29. 29 29 Consider this… Success Factors: •  Press release clarity / quality •  Broker management and support •  Timely disclosure against published milestones (good and bad) Potential Pitfalls: •  Orphan status •  Mistrust of management’s willingness to communicate •  Market fluctuations
  • 30. 30 Toronto Stock Exchange and TSX Venture Exchange listing fees are competitive Min and Max Initial Fees (C$000s) *There is no maximum fee. Market cap of $1B was used for illustration purposes **NYSE has a USD $500,000 cap on listing fees per issuer, per year ***Does not include NOMAD fees NB: For international companies, TSX initial listing fees max out at $150K Source: TSX analysis of exchange listing fee documents. As at August 25, 2010 79 42 Min and Max Sustaining Fees (C$000s)
  • 31. 31 TSX and TSX Venture Exchange Estimated Listing Costs Toronto Stock Exchange TSX Venture Exchange Listing Fees $10,000 - $200,000 $7,500 - $40,000 Accounting and Auditing Fees $75,000 - $100,000 $25,000 - $100,000 Legal Fees $400,000 - $750,000 $75,000+ Underwriter’ commission 4 – 6% Up to 12% Other fees to consider include: •  Securities Commissions fee •  Transfer agency fees •  Investor relations costs •  Geological or engineering reports •  Printing and translation costs •  Valuation reports •  Director and Officer liability insurance
  • 32. 32 1.  TSX and TSXV – The 3 Minute Overview 2.  The Clean Technology Sector 3.  Structure Tools for Entrepreneurial Finance 4.  Case Studies Outline
  • 33. 33 BioExx Specialty Proteins Ltd. Technology company focused on the extraction of oil and high-value proteins from oilseeds for the global food market. #1 Ranked Clean Technology Company and “Pick of the Street” - 2010 Venture 50TM Date of Listing Graduated from TSX Venture Exchange to Toronto Stock Exchange on January 22, 2010 Market Capitalization $273.1 million as of June 30, 2010 Analyst Coverage 7 Canadian Analysts / 1 US Analyst (Source: CapitalIQ) Financing, Price & Trading Volume History (Sept’06 – June’10) *(Source: Capital IQ) BXI 
  • 34. 34 Catch the Wind Based in Manassas, Virginia, Catch the Wind develops, manufactures, and sells laser based wind sensor systems for the wind power generation industry in the United States. One of the Top 10 Clean Technology companies – 2010 Venture 50TM Date of Listing Listed on TSX Venture Exchange through the CPC Program on April 3, 2007 Completed Qualifying Transaction on September 23, 2008 Financings $5.2 million by Private Placement in April 2010 $21.8 million by Private Placement in May 2009 $15.7 million raised at time of Qualifying Transaction in September 2008 Market Capitalization $86.3 Million as of June 30, 2010 based on 57.5 million shares outstanding Analyst Coverage 4 Canadian Analysts (Source: Capital IQ) Price and Trading Volume (Sept’08 – June’10) *(Source: Capital IQ) CTW 
  • 35. 35 China Annie Tao 416 947-4273 annie.tao@tmx.com Diversified Industries Raymond King 416 947-4675 raymond.king@tmx.com United States Tala Zarbafi 416 947-4636 tala.zarbafi@tmx.com Energy Cindy Gray 403 218-2822 cindy.gray@tmx.com Mining Greg Ferron 416 947-4477 greg.ferron@tmx.com Clean Technology Robert Peterman 416 947-4305 robert.peterman@tmx.com