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Dressed for Success - Is Your Company Ready to Go Public?

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stevenplumb

Steven Plumb, CPA provides insight into how to prepare your company for going public, whether by IPO, APO or a sale.

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Proper Dress: Is Your Business Suited to Go (or Stay) Out in Public Presented by Steven M. Plumb, CPA
Agenda Introduction Advantages of Going Public Disadvantages of Going Public Methods for Going Public Hard Costs Soft Costs Preparing to Go Public 2 息 2012 Clear Financial Solutions, Inc.
Steven M. Plumb, CPA 30+ years experience (29 as CPA) Former KPMG auditor Public company experience SEC PIPEs Registration statements Life science, O & G, IT entrepreneur 3 息 2012 Clear Financial Solutions, Inc.
Why choose to go public? Access equity capital for growth. Less dilutive than private sources Founder control maintained/maximized Exit the business to capture future value. Diversify founders individual wealth (partial). Redirect business interests or retire. 4 息 2012 Clear Financial Solutions, Inc.
Are you ready? Can you produce accurate GAAP financial statements within 15 days of month end? Do you have adequate and industry standard internal controls in place? Can you accurately report material events within 4 days of their occurrence? 5 息 2012 Clear Financial Solutions, Inc.
Do you have Experienced securities lawyer familiar with SEC practice? Experienced CPAs with public GAAP reporting experience? Strong controller? Committed management? 6 息 2012 Clear Financial Solutions, Inc.
Going Public Advantages Access to Capital Liquidity Growth through acquisitions Stock options for execs Expansion of Markets 7 息 2012 Clear Financial Solutions, Inc.
Going Public Disadvantages Corporate Governance Emphasis on short term results Public disclosure Costs Lawsuit magnet Permanent dilution 8 息 2012 Clear Financial Solutions, Inc.
Methods for Going Public IPO Expensive investment bank managed process. Requires expertly guided SEC registration. Free trading shares offer flexible capital access. APO Reverse merger with legacy risk Smaller scale, less expensive. Acquired by Public Co 9 息 2012 Clear Financial Solutions, Inc.
Access to Capital Opens up new pools of money Line up funding before going public APO follow on rounds are difficult Stock performance determines future funding Requires liquidity so investors can sell Must have a plan for creating and maintaining liquidity 10 息 2012 Clear Financial Solutions, Inc.
Liquidity Trading volume Driven by results Requires investor relations efforts Communication with public Developing broad base of investors Driven by press releases Analyst coverage Expensive 11 息 2012 Clear Financial Solutions, Inc.
Corporate Governance D & O Insurance Independent directors Director fees Committees of board Audit Compensation Regular, documented board meetings 12 息 2012 Clear Financial Solutions, Inc.
Liquidity Challenges Limited float Concentration of Control of the float Weak analyst coverage Minimal support from market makers Short selling Difficulty depositing shares 13 息 2012 Clear Financial Solutions, Inc.
Hard Costs Audit fee: $50K to $100K Purchase a shell for an APO: $350K Due diligence and legal: $150K Audit prep work: $25K SOX: $50K minimum All this before you: Raise a penny of capital File your first report with the SEC 14 息 2012 Clear Financial Solutions, Inc.
Soft Costs Management must spend time preparing for IPO or APO Management must spend time preparing regular SEC filings Board must make decisions with public and SEC looking over shoulder Longer lead time to make decisions More cautious decision making process 15 息 2012 Clear Financial Solutions, Inc.
Ongoing Costs Quarterly review Audit fees Prep time Legal review Shareholder communications Web site updates Press releases Public communications 16 息 2012 Clear Financial Solutions, Inc.
Ongoing costs (contd) Investor awareness Analyst reports Sarbanes-Oxley testing and reporting Additional staff to handle public reporting requirements 17 息 2012 Clear Financial Solutions, Inc.
As an exit strategy M & A strategy Acquired by a public company IPO or APO 18 息 2012 Clear Financial Solutions, Inc.
Timeline Public co must be able to consolidate your results immediately May require SEC filing Therefore, you must be: Audited for three years Comply with SOX when you go public Clean financials for previous 12 quarters Must be prepared three years in advance 19 息 2012 Clear Financial Solutions, Inc.
How we can help Develop financial reporting systems Prepare SEC reports & filings Compile due diligence Audit prep SOX testing 20 息 2012 Clear Financial Solutions, Inc.
Resources RR Donnelly Guides http://www.rrdonnelley.com/financial /Resources/Library.asp SEC Reporting Corporate Governance Annual Meeting Guide Others 21 息 2012 Clear Financial Solutions, Inc.
About CFS Contract CFO & SEC Reporting Key Performance Indicator Analysis Performance Improvement SOX Consulting Strategic Planning Due Diligence Services Audit Preparation Services 22 息 2012 Clear Financial Solutions, Inc.
Contact Info Steven M. Plumb, CPA www.clearfinancials.com steven@clearfinancials.com 713.780.0806 23 息 2012 Clear Financial Solutions, Inc.

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Dressed for Success - Is Your Company Ready to Go Public?

  • 1. Proper Dress: Is Your Business Suited to Go (or Stay) Out in Public Presented by Steven M. Plumb, CPA
  • 2. Agenda Introduction Advantages of Going Public Disadvantages of Going Public Methods for Going Public Hard Costs Soft Costs Preparing to Go Public 2 息 2012 Clear Financial Solutions, Inc.
  • 3. Steven M. Plumb, CPA 30+ years experience (29 as CPA) Former KPMG auditor Public company experience SEC PIPEs Registration statements Life science, O & G, IT entrepreneur 3 息 2012 Clear Financial Solutions, Inc.
  • 4. Why choose to go public? Access equity capital for growth. Less dilutive than private sources Founder control maintained/maximized Exit the business to capture future value. Diversify founders individual wealth (partial). Redirect business interests or retire. 4 息 2012 Clear Financial Solutions, Inc.
  • 5. Are you ready? Can you produce accurate GAAP financial statements within 15 days of month end? Do you have adequate and industry standard internal controls in place? Can you accurately report material events within 4 days of their occurrence? 5 息 2012 Clear Financial Solutions, Inc.
  • 6. Do you have Experienced securities lawyer familiar with SEC practice? Experienced CPAs with public GAAP reporting experience? Strong controller? Committed management? 6 息 2012 Clear Financial Solutions, Inc.
  • 7. Going Public Advantages Access to Capital Liquidity Growth through acquisitions Stock options for execs Expansion of Markets 7 息 2012 Clear Financial Solutions, Inc.
  • 8. Going Public Disadvantages Corporate Governance Emphasis on short term results Public disclosure Costs Lawsuit magnet Permanent dilution 8 息 2012 Clear Financial Solutions, Inc.
  • 9. Methods for Going Public IPO Expensive investment bank managed process. Requires expertly guided SEC registration. Free trading shares offer flexible capital access. APO Reverse merger with legacy risk Smaller scale, less expensive. Acquired by Public Co 9 息 2012 Clear Financial Solutions, Inc.
  • 10. Access to Capital Opens up new pools of money Line up funding before going public APO follow on rounds are difficult Stock performance determines future funding Requires liquidity so investors can sell Must have a plan for creating and maintaining liquidity 10 息 2012 Clear Financial Solutions, Inc.
  • 11. Liquidity Trading volume Driven by results Requires investor relations efforts Communication with public Developing broad base of investors Driven by press releases Analyst coverage Expensive 11 息 2012 Clear Financial Solutions, Inc.
  • 12. Corporate Governance D & O Insurance Independent directors Director fees Committees of board Audit Compensation Regular, documented board meetings 12 息 2012 Clear Financial Solutions, Inc.
  • 13. Liquidity Challenges Limited float Concentration of Control of the float Weak analyst coverage Minimal support from market makers Short selling Difficulty depositing shares 13 息 2012 Clear Financial Solutions, Inc.
  • 14. Hard Costs Audit fee: $50K to $100K Purchase a shell for an APO: $350K Due diligence and legal: $150K Audit prep work: $25K SOX: $50K minimum All this before you: Raise a penny of capital File your first report with the SEC 14 息 2012 Clear Financial Solutions, Inc.
  • 15. Soft Costs Management must spend time preparing for IPO or APO Management must spend time preparing regular SEC filings Board must make decisions with public and SEC looking over shoulder Longer lead time to make decisions More cautious decision making process 15 息 2012 Clear Financial Solutions, Inc.
  • 16. Ongoing Costs Quarterly review Audit fees Prep time Legal review Shareholder communications Web site updates Press releases Public communications 16 息 2012 Clear Financial Solutions, Inc.
  • 17. Ongoing costs (contd) Investor awareness Analyst reports Sarbanes-Oxley testing and reporting Additional staff to handle public reporting requirements 17 息 2012 Clear Financial Solutions, Inc.
  • 18. As an exit strategy M & A strategy Acquired by a public company IPO or APO 18 息 2012 Clear Financial Solutions, Inc.
  • 19. Timeline Public co must be able to consolidate your results immediately May require SEC filing Therefore, you must be: Audited for three years Comply with SOX when you go public Clean financials for previous 12 quarters Must be prepared three years in advance 19 息 2012 Clear Financial Solutions, Inc.
  • 20. How we can help Develop financial reporting systems Prepare SEC reports & filings Compile due diligence Audit prep SOX testing 20 息 2012 Clear Financial Solutions, Inc.
  • 21. Resources RR Donnelly Guides http://www.rrdonnelley.com/financial /Resources/Library.asp SEC Reporting Corporate Governance Annual Meeting Guide Others 21 息 2012 Clear Financial Solutions, Inc.
  • 22. About CFS Contract CFO & SEC Reporting Key Performance Indicator Analysis Performance Improvement SOX Consulting Strategic Planning Due Diligence Services Audit Preparation Services 22 息 2012 Clear Financial Solutions, Inc.
  • 23. Contact Info Steven M. Plumb, CPA www.clearfinancials.com steven@clearfinancials.com 713.780.0806 23 息 2012 Clear Financial Solutions, Inc.

Editor's Notes

  1. Page 8 of reverse mergers by feldman
  2. Pg 64 of reverse mergers by feldman
  3. Legal: 150Investor relations: 150