What is a CPC

The Capital Pool Company Program has provided a venue for private companies to take their company public through the Toronto Stock Exchange Venture Index (TSX-V). This program provides growing private companies with access to shareholder liquidity, capital market financing, visibility, and a start up cost break on going public. Roughly 100 CPCs are formed each year with approximately the same amount of transactions being completed. The steps involved in completing the program are listed below.

Building the CPC

A CPC is created when 3-6 people put up a minimum of $100,000 in seed capital.  A shell company is incorporated and a prospectus issued which outlines the raising of funds (between $200,000 and $1,900,000) and identifies potential acquisitions.

Share Structure

The prospectus is filed with the securities commission and the CPC applies for listing on the TSX Venture Exchange.  The lead broker of the issue sells the shares to at least 200 arm’s length shareholders with a minimum of 1,000 shares and a maximum of 2% of the offering per client.

Qualifying Transaction

Once shares are distributed and the CPC listed for trading, the company has 24 months to identify a business opportunity as a qualifying transaction and agree in principle to acquire the business.  This transaction is examined by the TSX Venture Exchange to confirm it complies with listing requirements.

Done Deal

The business acquisition is finalized and the .P is removed from the symbol after the filing statement has been posted on System for Electronic Document Analysis and Retrieval (SEDAR) for a minimum of seven business days.  The transaction is now complete and this newly formed public trading company is ready to grow.