A “capital pool company” (“CPC”) is a new shell company trading on the TSX Venture Exchange (“TSX-V”) that has no commercial operations and no assets except for cash. The purpose of a capital pool company is to find and acquire an active business. A CPC uses its cash holdings to evaluate promising businesses or assets that it would then acquire in a qualifying transaction, which has to be completed within 24 months of listing. The completion of the qualifying transaction would enable the CPC to list as a standard Tier 1 or Tier 2 issuer on the TSX-V. If a CPC cannot complete its qualifying transaction within the prescribed time limit of 24 months of listing may be at risk of a trading suspension or delisting from the TSX-V.

To create a CPC, a minimum of three individuals with an appropriate combination of business and public company experience must put up a minimum of the greater of $100,000 and 5% of total funds raised and each must subscribe for shares at a minimum price per share between the greater of $0.05 and 50% of the price at which subsequent shares are to be sold via prospectus. In order to take the CPC public, there must be a minimum of 200 shareholders, with each buying no more than 2% of the shares offered in the initial public offering.

A CPC trading on the TSX-V can be identified by the “.P” added to its trading symbol.