TSX-V, charities set up partnership

Option to Give program gets exposure Nov. 27

As with any initiative, ideas require a champion, a person who will not only be a strong advocate but also take the necessary steps to advance the cause.

And a group of charities hope they will gain considerable exposure — and some hefty support — when they open the TSX for trading on Nov. 27, through an event largely made possible by the work of Brady Fletcher, a former investment banker who was named president of the TSX-Venture Exchange one year back, and Michael Thomson, also a former investment banker who has been a director of the Alberta branch of the Canadian Cancer Society for about 18 months.

For that market opening, the Canadian Cancer Society, the Juvenile Diabetes Research Foundation, the Centre for Addiction and Mental Health, the Lung Association and the Heart and Stroke Foundation have partnered with the TSX-Venture on an Option to Give program. The goal is to shine some light on a TMX policy 4.7 known officially as “Charitable Options in connection with an IPO”, which was updated in the spring of 2013.

“We are hoping the Option to Give program will provide a repeatable, predictable and sustainable way of raising funds at a time when people are giving less and most charities are fighting to be profitable in a very competitive giving environment,” said Thomson, noting the program dovetails on TSX.V Policy 4.7 that provides for the granting of charitable options.

Adds Fletcher from the TSX-Venture: “Our listed issuers are looking for ways to do good and this is an easy one for them to take advantage of.”

In his previous career as a banker at Canaccord Genuity, Fletcher would try to convince issuers to donate options to charity. He said Monday the new program “is a relatively non-dilutive way for a company to donate and make a material difference.”

Thomson, a two-time cancer survivor, said the program will help fill a void in charitable donations, a gap caused by a series of shortterm factors. “A lot of charities are having to find projects that are scalable and which can give them revenue, that’s predictable, on an on going basis,” he said.

Indeed the program could add more charities down the road.

Through the program, the hope is that issuers will grant options in connection with an initial public offering, a capital pool company offering, a reverse takeover offering, or a change of business.

In pushing for this program, Thomson, who took the idea to the TSX-Venture knows of what he is advocating.

Before Thomson retired this year, two of the CPC companies he backed, Soleil Capital and Roll-Up Capital Corp., both gave charitable options to the Canadian Cancer Society. In the case of Soleil, 70,000 options were granted at the time of the initial public offering; at RollUp the options were granted at the time of its qualifying transaction with Renntiger Resources Limited. In that case, 50,000 options were granted: those options have an exercise price of $0.30, and expire 10 years from the date of grant.

As written, TMX Policy 4.7 comes with a few restrictions: The options expire at the earlier of 10 years after they are granted or 90 days after the charity ceases being an “eligible charitable organization.” And the issuer is allowed to issue no more than one per cent of the securities outstanding to the charitable organizations.

Additional guidelines were added to the Option to Give program with the basic objective being that if and when the options are exercised, the resulting sale of stock will not disrupt the market.

OUR LISTED ISSUERS ARE LOOKING FOR WAYS TO DO GOOD.