Entry of financial numbers into a format such as Quickbooks, Xero, Freshbooks, Wave Accounting, etc.
Recording, classifying, reporting, and interpreting financial performances of the business and economic conditions for stakeholder review.
Financial Reports for internal users (management). Reporting may be done weekly, monthly, quarterly, or yearly. These reports are typically confidential and used in decision making.
Setting up and utilizing tools to help management measure performance against it's approved budget or plan. Looks at future values and costs with regards to planned acquisitions and economic resources.
Typically, we provide internal audits, not audits for filings. Our audits may involve testing controls of the business and it's accounting system. We typically find money 'leaks'.
Forensic Accounting may be included.
Providing preparation and filing of required tax returns - local, state, and federal.
Analysis of tax consequences of business decisions or future plans.
Create a new public shell (and put your company inside).
Hire a team of underwriters, utilizing an investment bank, they provide lawyers, CPAs, public relations experts, and SEC professionals. (3-7% of the IPO's total sales price).
Due diligence and regulatory filings.
SEC reviews everything your company has done, agreements, executives, anything and everything they can find on your company.
File company prospectus.
File more forms, answer questions, more forms.
Set a date for the offering, define number and price of shares.
Get approval and launch.
Approximate cost up to 10% of gross proceeds (you raise $100 million, you pay $10 million).
Process can take several months to even years.
Find a "shell", essentially a company that is no longer actively in operation, but is still in good standing with the SEC.
Buy a large percentage of the stock (typically, this will leave you with 80-90% of the issued stock). Most bulletin board companies can be acquired for $200-400k, depending on negotiation and how much work is needed.
No need for registration.
Now, you have 10-20% of the shareholders who do not know your company. You have to create liquidity in the market to essentially buy them out over time. (Your company may be worth $20 Million, even 10% may cost you $2 Million in market buying).
Any positive or negative of the previous company is now yours. Lawsuits, disputes, negative press, shareholder sentiment, etc. Time frame can be as little as a few weeks.
You may need to "clean up" the shell, this may include reverse-forward splits.
A parent company spins a subsidiary off and distributes shares to current stockholders. A spin-off constitutes a sale by the parent company.
Need a legitimate business reason.
Reporting to the SEC under the Securities act of 1933.
Time frame can be as little as a few weeks.
What should you do?
This question is asked all the time. And, of course the answers vary. Typically, we see:
Companies with over $50 million in revenue/assets go the IPO route.
Companies with $10-50 million do a reverse merger.
Companies with less than $20 million do a spin-off, usually from a BDC.
Every problem has a solution.
There are usually multiple solutions.
We know how to take companies public cost effectively.