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by Stockwatch Business Reporter

The TSX Venture Exchange added 1.27 points to 683.89 Friday, ending the week up 1.75 points. The Toronto Stock Exchange, meanwhile, closed Friday down 117.52 points. The TSX-V is home to 135 capital pool shells, but this year the TSX has started welcoming similar-structured vehicles known as special purpose acquisition corporations, or SPACs, which can best be described as shells on steroids. SPACs have 21 months from listing to sign a letter of intent or a definitive agreement with a qualifying transaction target. They have 24 months in total to close a deal, but can extend either the 21-month or the 24-month deadlines to 36 months with shareholder approval and consent from the TSX.

Shareholders of SPACs are likely much more demanding of management than the shareholders of capital pool shells, considering the amount of money involved. Earlier this week, for example, Reza Satchu and others filed a final long form prospectus to list Alignvest Acquisition Corp., a SPAC that anticipates selling 22.5 million Class A restricted voting units at $10 for $225-million. The money from the offering will be held in escrow until Alignvest completes a QT or, failing that, shareholders will receive a refund, plus interest and less costs. TD Securities Inc., Cantor Fitzgerald & Co., BMO Nesbitt Burns Inc. and CIBC World Markets Inc. are in charge of lining up deep-pocketed investors, not one of whom is allowed to acquire more than 15 per cent. Each Class A restricted voting unit will comprise one Class A restricted voting share and one-half of a warrant; whole warrants will only become exercisable at $11.50 starting 30 days after the SPAC completes a QT. The warrants expire five years after the QT closes. When Alignvest closes its QT, each Class A restricted voting share will automatically convert into one Class B share.

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