The Canadian Securities Administrators (CSA) have introduced additional flexibility under the listed issuer financing exemption (the “LIFE Exemption”) through Coordinated Blanket Order 45-935, allowing more public companies to raise greater amounts using a simplified process.
A blanket order was adopted across all Canadian jurisdictions with immediate effect and builds on the 2022 initiative to simplify and accelerate capital raising for companies with securities listed on a Canadian stock exchange.
Under the original exemption, companies could raise the greater of $5 million or 10% of their market value, up to $10 million in a 12-month period and subject to a 50% dilution limit. The blanket order increases that threshold significantly, allowing issuers to raise the greater of $25 million or 20% of their market value, up to $50 million in a 12-month period. The dilution limit continues to apply, though the calculation is clarified and relaxed to only include warrants exercisable within 60 days of issuance. The updated LIFE Exemption can only be relied upon where the distribution would not result in the creation of a new control person or in any person or company acquiring securities that would enable it to elect a majority of the listed issuer’s board of directors.
The LIFE Exemption has been a popular and widely used method to efficiently raise capital using a streamlined disclosure document and relying on a public company’s existing disclosure record.
Since its adoption in late 2022, more than 270 companies to date have used the exemption to collectively raise more than $1 billion. The blanket order makes the LIFE Exemption an even more practical tool and is the latest effort from Canadian securities regulators to improve market accessibility and access to capital.
The expanded availability of the exemption is a gamechanger for many small and mid-sized public companies to enable quicker access to meaningful funding using streamlined public disclosure instead of a costly and time-consuming prospectus offering.
The Pulse Law team is available to assist with all aspects of capital raising for public companies, including under the enhanced LIFE Exemption. Please feel free to reach out with any questions about the blanket order, the LIFE Exemption, and how these changes could affect your capital-raising strategy. To reach out to our team, you can contact us on our site.
