Question

Imagine you are a private company going public and need to file and S-1 IPO (Initial Public Offering) Registration Report. What information about the company would you be required to disclose? How many years of financials would you have to have audited?

Answer 1

You also should be aware of the relief provided by the Jumpstart Our Business Startups Act (JOBS Act), which was enacted in 2012 to make it easier for companies that meet the definition of an emerging growth company (EGC)1 to go public. Currently, more than 80% of companies filing an IPO registration statement are EGCs, and they take advantage of various available relief provisions, but the IPO process can still be daunting.

All companies embarking on an IPO must comply with the accounting and disclosure requirements in US GAAP that apply to public companies, as well as the rules and regulations of the US Securities and Exchange Commission (SEC). In many cases, complying with these requirements will require a change in practice for private companies.

IPOs take an average of 110 days to 140 days to complete once you’re in the door of the SEC. Non-EGCs are typically at the lower end of the range, and EGCs take slightly longer. For companies that need IPO proceeds to fund operations or launch new strategies, timing is crucial. For this reason, companies should be well prepared to deal with potential pitfalls 100 along the way.

Key Steps in theIPO Process-

- Initial meetings (“all-hands” meeting) and planning

- S-1 drafting and printer sessions = Prospectus and registration statement primarily drafted by legal counsel and the company, except for the business section and box, which are drafted by the banks • Company counsel usually leads drafting sessions - - “All-hands” working me - Sessions held once document in “reasonable shape” - Can result in lengthy sessions at the lawyers/printers.

- Response to SEC comment letters and prepare draft amendments

- Prepare preliminary prospectus (file “red herring”)

- Complete financial analysts’ meetings (“road show”)

- Price (“offering date”)

- Address over-allotment options (“green shoe”)

- Close (“closing date”)

The company would required to disclose the information while placing IPO is Summary and selected financial information -

-Additional two years of financial statements (five years in total), which, however, may be unaudited (two years for JOBS Act filers) - Although not technically required, the underwriters may request these two years to be audited. - Predecessor/successor financial statements to meet five-year requirement (two years for JOBS Act filers). - Often, non-GAAP financial information (e.g., EBITDA or Adjusted EBITDA) is also presented.

The company is required 2-3 years fianacial statement get audited while placing the Initial public offer.