Compass Therapeutics, Inc. has withdrawn its IPO. No word has been released on when it will go public in the future. In the meantime, here’s what investors need to know.
On October 19, 2020, Compass Therapeutics, Inc. filed a draft registration with the US Securities and Exchange Commission. The company had planned to go public on the Nasdaq Capital Market under the ticker symbol “CMPX.” It expected to raise around $50 million by selling 9,000,000 shares at a price of $5 to $6 each.
On June 23, just a few months prior, Compass Therapeutics completed a merger with Olivia Ventures, Inc. The deal was valued at $60 million. The new company kept the name Compass Therapeutics, Inc.
Following the merger, private equity shares were issued to current and new investors. These shares were not available on a public stock exchange.
On November 13, 2020—less than one month after filing to go public—Compass announced it was withdrawing its IPO. No word has been released on whether Compass Therapeutics will go public in the future. We’ll update this page as more information becomes available.
Although you won’t be able to buy stock in Compass Therapeutics directly, there are 2 ways investors can back the company.
Although it’s a less direct investment than purchasing Compass Therapeutics stocks outright, one option is to back its various investors including Cowen Inc. (NasdaqGS: COWN) and Alexandria Real Estate Equities, Inc. (NYSE: ARE). These are available on US stock exchanges, which are much easier for Canadians to access than overseas exchanges.
You’ll need a brokerage account to buy and sell shares. Here’s how it works:
You can also indirectly buy into Compass Therapeutics by investing in exchange-traded funds (ETFs) that track its investors. By purchasing these ETFs, you can potentially earn gains when these companies are performing well.
The following ETFs hold investments in Cowen Inc. (NasdaqGS: COWN) and Alexandria Real Estate Equities (NYSE: ARE):
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
Investment accounts that do not qualify for this exemption include RESPs, TFSAs and RDSPs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you’ve already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply to your circumstances.
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