14 Preparing to Go Public Once you have decided to take your company public, there are many considerations to take into account well before actually beginning the going public process. In particular, the processes of selecting professional advisors, evaluating your corporate structure, and organizing your company’s financial statements should be undertaken as early as practical. Preparing your company as described below will help to ensure a smoother going public transaction. Selecting professional advisors A successful going public transaction will require the support of a professional team including: a financial advisor and/or underwriter (which may also be a sponsoring firm, as discussed below); an external auditor; a securities lawyer; an investor relations (IR) professional; and, in certain conditions, a sponsor. Choosing your financial advisor/underwriter/broker and/or sponsor Only persons registered in Canada to sell securities may legally sell securities or underwrite offerings in Canada. Often referred to as a broker, investment banker or dealer, these persons act as the underwriter for an offering of shares and as the investment dealer who sells securities during the offering process. Prior to offering, the broker will consider your company’s suitability for a public offering. This process includes an assessment of the marketability of your company for potential investors. A broker may also act as a sponsor for your company’s application, if one is required, provided that it is a Participating Organization with the Exchanges. (For more information on Participating Organizations, see www.tsx.com/trading/accessing-our-markets/member-firm-directory?l=A). Enlisting a Sponsor – Some companies seeking a listing may be required to have their application sponsored by a Participating Organization. There are more than 120 Participating Organizations across Canada, and many of these firms have a special focus or area of expertise. A sponsoring firm plays an essential role in the listing process, since it is in a position to provide a broad perspective on your company’s suitability for listing. The sponsor will be familiar with the Exchanges’ guidelines and can provide opinions about: • Your company’s directors and management. • The integrity of the financial information supplied by your company. • The suitability of your company’s business. • The soundness of your company’s business plan and operations. Sponsors for mining companies will also make comments on: • Their visits to your sites / properties. • Land tenure issues and material agreements at your principal properties. • Your management team’s experience and technical expertise. • The 18-month projection of sources and uses of funds prepared by your company (TSX requirement only). The sponsor plays a key role in supporting the listing of your company’s securities, especially in cases where your company does not meet certain financial thresholds and other requirements. Most often, the sponsor is called on to confirm that an applicant to an Exchange satisfies all the listing requirements, or appears reasonably able to meet its obligations as a public company, or both. A sponsoring firm will also help you determine the most appropriate way for your company to go public, and provide advice as to the receptiveness of the market for your company’s specific business. Need a sponsor? For a current list of TSX and TSXV Participating Organizations, please visit https://www.tsx.com/trading/ accessing-our-markets/member-firm-directory?l=A
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