Private Placements Explained: What It Means When a TSXV Junior Raises Money

Units, warrants, pricing floors and discount limits under TSXV Policy 4.1, with a worked example of what a placement does to the share count.

Key takeaways

TSXV rules cap the discount to the last close at 25% up to $0.50, 20% from $0.51 to $2.00, and 15% above $2.00.
Placement warrants must carry an exercise price no lower than the Market Price and expire within five years.
Shares sold under common exemptions are generally restricted for four months, while LIFE offerings are freely tradeable.

A private placement is a sale of new shares directly to selected investors instead of through a public prospectus. For a Canadian junior on the TSX Venture Exchange, it is the most common way to raise money, and the exchange’s rules set how low the price can go, what warrants can come with it, and how long buyers must hold.

What the announcement is telling you

A typical news release gives the size of the raise, the price per unit, what a unit contains, the warrant terms, and whether it is brokered (sold through an investment dealer paid a commission) or non-brokered. Each of those terms is governed by TSXV Policy 4.1, Private Placements, and the definitions in Policy 1.1, both in the exchange’s Corporate Finance Manual.

Under Policy 4.1, the consideration must be cash. Shares issued to settle debt or buy assets fall under other policies.

Units and warrants

A unit is usually one common share plus a warrant, or a fraction of one. A warrant is the right to buy another share at a set exercise price until an expiry date. Policy 4.1 sets the limits:

Each warrant can entitle the holder to at most one share. “Piggyback” warrants, which hand out another warrant on exercise, are not permitted.
A placee can receive at most one warrant per share bought.
Warrants must expire no later than five years after issuance.
The exercise price cannot be less than the Market Price of the shares on the Price Reservation Date.
A company cannot do a placement of warrants alone.

Warrants cost the company nothing to issue but carry a cost for shareholders later. If exercised, they add shares. That is why a “fully diluted” share count, which includes warrants and options, is often larger than the basic count. Flow-through financings are a related type of placement with their own tax rules; see our flow-through shares explainer.

The pricing rules and discount limits

The company fixes its price by issuing a news release or, in some cases, by filing a Form 4A Price Reservation Form. The Market Price is the last closing price before that notice. The offering price cannot be below the Discounted Market Price, defined in Policy 1.1 as the Market Price less these maximum discounts:

Closing price	Maximum discount
Up to $0.50	25%
$0.51 to $2.00	20%
Above $2.00	15%

A minimum price of $0.05 per security applies even after the discount. The exchange generally will not let listed shares be issued from treasury below $0.05. Policy 1.1, as at March 31, 2026, allows limited exceptions down to $0.01 when the closing price is $0.05 or less, subject to conditions including a cap on how many sub-$0.05 shares can be issued in 12 months.

The exchange also guards against gaming the price. If the company announces material information after reserving a price, the Market Price must be at least the closing price on the trading day after that announcement. If the exchange concludes a stock was high-closed or low-closed, it sets the price itself.

The math: a hypothetical placement

Take a hypothetical TSXV company with 50 million shares outstanding and a closing price of $0.40 when it announces a placement.

Maximum discount at that price: 25%. Lowest allowed unit price: $0.40 × 0.75 = $0.30.
Raise $3 million at $0.30: 10 million units.
Each unit has one share and one full warrant. Lowest allowed exercise price: the $0.40 Market Price. Longest term: five years.
Basic shares after closing: 60 million. Placees own 10 ÷ 60 = 16.7%.
If all warrants are exercised: 70 million shares, and the company receives another $4 million.

An existing holder with 1 million shares owned 2.0% before the deal, 1.67% after closing and 1.43% if every warrant is exercised. Same shares, smaller slice.

Timing, hold periods and approvals

Filing and lapse. The company must file with the exchange within 30 days of the Price Reservation Date, or the reserved price lapses.
Closing deadline. A non-brokered placement must close within the greater of 15 days of conditional acceptance or 45 days of price reservation. A brokered placement gets the greater of 30 days or 60 days.
Hold period. Shares sold under common prospectus exemptions such as the accredited investor exemption are generally restricted for four months under National Instrument 45-102. The TSXV also imposes its own four-month Exchange Hold Period in certain cases, including on securities issued to directors, officers and promoters.
Insiders. If insiders are participating, the price must be reserved by news release, not a Price Reservation Form. The exchange can restrict closing on conditional acceptance where insiders take more than 25% of the placement.
New Control Person. If the placement would create a new Control Person, generally a holder of more than 20% of voting shares, shareholder approval is required first.

A separate route exists. The Listed Issuer Financing Exemption, or LIFE, lets listed issuers sell freely tradeable shares with no hold period. Under CSA Coordinated Blanket Order 45-935, effective May 15, 2025, the limit rose to the greater of $25 million and 20% of market value, to a maximum of $50 million in 12 months, subject to a 50% dilution cap. In Ontario, that order expires November 15, 2026.

What to watch

The initial news release: price, unit structure, warrant exercise price and term, and use of proceeds.
TSXV bulletins confirming conditional and final acceptance.
The closing news release, which must disclose hold period expiry dates and insider participation.
Hold period expiry dates, four months after closing.
Whether the CSA extends or replaces Blanket Order 45-935 before its November 15, 2026 expiry in Ontario.

Sources

Frequently asked questions

How much of a discount can a TSXV private placement be priced at?

TSXV Policy 1.1 caps the discount to the last closing price at 25% for stocks closing up to $0.50, 20% for $0.51 to $2.00, and 15% above $2.00. A minimum price of $0.05 generally applies even after the discount, with limited exceptions down to $0.01 for stocks already trading at $0.05 or less.

What is a unit in a private placement?

A unit is usually one common share plus a full or partial warrant. The warrant gives the right to buy another share at a set exercise price until expiry. Under TSXV Policy 4.1, each warrant can cover at most one share, the exercise price cannot be below the Market Price, and the term cannot exceed five years.

How long is the hold period on private placement shares in Canada?

Shares sold under common prospectus exemptions such as the accredited investor exemption are generally restricted for four months under National Instrument 45-102. The TSXV also applies its own four-month Exchange Hold Period in some cases. Shares sold under the Listed Issuer Financing Exemption, known as LIFE, are freely tradeable with no hold period.