In September 2022, Canadian Securities Administrators (CSA) introduced a new prospectus exemption to an array of, often confusing, exemptions, Listed Issuer Financing Exemption (LIFE), “to provide a more ‘efficient method’ for issuers listed on a Canadian stock exchange to raise capital.”
Listed companies started raising capital by way of LIFE exemption in early December 2022.
CPE Analytics analyzed Q1 2023 exempt financings, from its all-financings database; the resulting did not show advantage and efficiency of LIFE exemption in capital raising.
There were 45 LIFE financings on CSE (17), TSX Venture (24), TSX (3), NEO (1) in Q1 2023, raising $121 million with average deal size of $3.07 million.
In comparison, 561 exemption financings completed in Q1 2023 raising $10.33 billion, average $18.41 million per deal. Excluding all debt financings, 528 financings raised $2.87 billion, averaging $5.44 million per equity/convertible debenture financing.
Accredited investor exemption still efficient way of fundraising
Companies raised $4.48 billion relying on accredited investor type of exemption, averaging $579,000 per investor. Companies relying on LIFE exemption raised $121 million averaging $78,000 per investor. (see chart)
Foreign investor participated in LIFE financings
Argentina
Aruba
Australia
Austria
Bahamas
Barbados
Belgium
Brazil
Cayman Islands
Chile
China
Colombia
Costa Rica
Côte d’Ivoire
Cyprus
Czech Republic
Germany
Hong Kong
Ireland
Isle of Man
Israel
Liechtenstein
Luxembourg
Marshall Islands
Monaco
Netherlands
Panama
Paraguay
Peru
Russian Federation
Singapore
Spain
Sweden
Switzerland
Tanzania
Thailand
Turkey
United Arab Emirates (UAE)
United Kingdom (UK)
United States (USA)
Virgin Islands British (BVI)
Note
The analysis included Canadian public exempt financings only; exempt financings by foreign based companies in the database were not included in the analysis.