The recent listing of NimsTec Ltd (see http://bsx.com/bsx-shorts/may97/nimstec.htm) heralds the launch of The BSX's new Mezzanine Market for Hi-Tech start-ups.
In short, The BSX now offers start-up companies the opportunity to list on a recognized international stock exchange at a much earlier stage than is currently possible onshore. This is made possible because The BSX requires that a minimum investment level of at least $100,000 is applied to each such company. This means that access to the Mezzanine Market is limited to sophisticated investors only and means that The BSX can rely more on full disclosure than prescriptive regulations for investor protection purposes.
A listing on the Mezzanine Market is the perfect preparation for a subsequent full Initial Public Offering (IPO) to public investors. The Mezzanine Market thus sits perfectly between a start-up company's first private placement to raise capital and a full public offering - hence the term "Mezzanine" Market.
Subject to the minimum investment of $100,000 and the obligation to make full disclosure, there are no other onerous qualifications for listing on the Mezzanine Market.
Why?
Why would a start-up company seek a listing on this Mezzanine Market?
1. A listing on a recognized stock exchange is widely regarded as a prestigious mark of advancement for any company and adds significant marketability to its securities.
2. Once the securities of a company have the status of being "listed" securities they become more attractive to institutional investors (who often limit the amount they can invest in "unlisted" securities).
3. Listing facilitates the widest dissemination of trading prices.
4. The BSX provides an open market facility for the posting of bids and offers to buy and sell the securities in blocks of at least $100,000. Whilst it is unlikely that a liquid secondary marketing in these securities will exist, The BSX listing does create the mechanism and opportunity for trading and world wide price dissemination.
5. The visibility and PR profile of the company is significantly enhanced, including full exposure on the Bloomberg Financial Market system (with over 80,000 terminals world wide) and The BSX's information dissemination systems.
6. The company will obtain significant exposure in The BSX's color magazine, Internet web site and frequent road shows.
7. All press releases from the company are disseminated by The BSX and, together with the trading and pricing information of its securities, will develop an invaluable historical profile for the company in preparation for a full IPO.
How?
All applications for listing on the Mezzanine Market must be sponsored by one of the Trading Members of The BSX. The sponsor will submit the formal application on behalf of the company.
The costs of obtaining a Mezzanine Market listing are minimal and comprise:-
BSX listing fees
Sponsorship fees
Production of a full prospectus
(this may be the same document as the private placement offering document).
The BSX listing fee is dependent on the market capitalization of the company, as follows:
Market Capitalization
$ Initial Fee* Annual*
Maintenance Fee
Not exceeding
10m 5,000 5,000
50m 10,000 7,500
100m 15,000 12,500
200m 25,000 15,000
500m 30,000 17,500
1,000m 35,000 20,000
Exceeding 1,000m 40,000 25,000
* In the first year the Initial and Annual Maintenance Fee are both payable upon application for listing. In subsequent years only the Annual Maintenance Fee is payable on each anniversary of the listing.
PR Campaign
Any company which contemplates a full public listing within the next five years is strongly recommended to consider obtaining a Mezzanine Market listing on The BSX as soon as possible. The public profile created by the Mezzanine Market listing will prepare the institutional market for the subsequent IPO and create a public profile in advance of a full public listing. The Mezzanine Market is therefore a crucial part of the right Public Relations campaign for every company which plans to go public in the near future.
For more information about listing on The BSX's Mezzanine Market, please contact William Woods (bsxceo@bsx.com) or Greg Wojciechowski (ceo@bsx.com) Telephone (1 441)-292-7212
Fax (1-441)-292-7619