46 Sponsorship fees While either Exchange may require sponsorships, there are other cases where your business may be exempt. Where it is required, sponsorship covers the cost of conducting due diligence to ensure your company’s business and business plan are sound and meet original listing requirements. The complexity and geographic distribution of your business operations will affect the cost of the due diligence processes. Sponsorship fees are highly variable: they depend on the scope of due diligence required and the extent of your sponsor’s previous knowledge of and experience with your company. Professional fees Audits — Audit costs vary dramatically. They’ll depend on the complexity of your company, the state of its accounting records and its financial position. The cost of auditing an operating company for the first time may be considerable – ranging from $12,000 to in excess of $80,000 for an IPO or reverse takeover. In addition to the cost of the audit itself, there may be additional auditing costs associated with going public, such as comfort letters (essentially, a statement that any unaudited financial material included with disclosure documents has been sufficiently reviewed, and the auditor is comfortable it was properly prepared in accordance with appropriate accounting principles). Legal Costs — Legal counsel must conduct due diligence to help your company’s management ensure full, true and plain disclosure of all material facts. The costs will vary depending on the quality and quantity of documentation your company prepares, and the complexity of your business. U.S. or foreign-based companies will likely incur higher legal fees, as will certain types of businesses. Legal fees for a reverse takeover may also be higher, because the due diligence is conducted on two separate companies. It is not uncommon for the company’s corporate secretary or chief financial officer, if experienced, to prepare a draft prospectus or filing statement for legal counsel to review before submitting it to the securities commission. Drafting a prospectus in-house may help keep costs lower. Legal and investor relations fees may also be higher if your company needs help meeting its continuous disclosure requirements, including issuing quarterly financial statements or news releases. These fees depend largely on how well your company directors understand the requirements of your exchange and securities legislations. If your management team is knowledgeable and experienced, more work can be done in-house, keeping costs lower. FEES TSX TSXV Listing fees $10,000 – $200,000 $10,000 – $70,000 Accounting and auditing fees $75,000 – $100,000 $25,000 – $100,000 Legal fees $400,000 – $750,000 $75,000+ Underwriters’ commission 4 - 6% Up to 12% Note Actual individual and total costs will vary from these estimated ranges depending on the nature and complexity of the transaction and relative sophistication of the private company, its management, internal controls and reporting processes.