What is a TSX Capital Pool Company?

What is a Capital Pool Company (CPC)?

CPC is a public shell corporation formed in accordance with TSX-V Capital Pool Company Program policies. CPC has no commercial operations and no assets other than a minimum amount of cash. CPC is formed solely to identify assets and/or businesses to acquire or merge with, and complete a TSX-V “Qualifying Transaction.”

CPC founders’ shares are escrowed with TSX-V, are not freely tradeable, and are released incrementally from escrow after a Qualifying Transaction is executed.

According to TSX Venture Capital Pool Company policies, a CPC has 24 months from the date its Shares are listed on the Exchange to complete a Qualifying Transaction. If a CPC does not complete a Qualifying Transaction within this timeframe, and therefore fails to meet TSX listing requirements, it will be delisted or it can apply to be listed on NEX. NEX is a separate trading board of TSX-V for listed companies that have fallen below TSX-V listing requirements.

In 2020, there are 193 Capital Pool Companies seeking acquisitions to complete a Qualifying Transaction and fulfill TSX-V listing requirements.

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Kris Tabetando specializes in mergers & acquisitions of online businesses. He partners with investors to acquire & manage online businesses.

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