Our Services to Public Companies and IPOs
Introduction
Undergoing a financial statement audit is one of the most important procedures in the process of becoming a US publicly traded company.
Public Sector Issue - Advantages
There are certain advantages to being a US publicly traded company. Some of the benefits and reasons for becoming one include:
- to raise capital and increase cash flow,
- to gain more media attention or enhance corporate image in the market,
- to provide shareholders with liquidity,
- to provide employees with the benefit of stock options,
- to create wealth for company founders and original investors,
- to increase a company’s fair market value,
- to improve the Company’s financial and debt-equity ratios,
- to expand a company’s business through mergers and acquisitions,
- to reduce the need for venture capital and bank financing,
- to receive the full protection afforded by the US SEC Regulations and international laws, and
- to provide the major shareholders with personal security and to avoid family disputes of the second generation.
Public Sector Issues – Disadvantages
Some potential areas for concern when going public are:
- the disclosure of company financial statements,
- the loss of control through the introduction of external shareholders,
- exposure to market volatility which may affect the value of your business and lead to hostile takeover,
- costs of going public can be significant,
- requires a great deal of time and other resources,
- compliance with additional US laws, regulations, and standards,
- the toll that the process may take on day-to-day operations and
- the additional burden placed on senior management to handle the process and income tax issues.
Why choose AGCA, Inc.
The selection of the right team to help your company going public is critical to success. Your team should include a competent and skillful law firm, a qualified bracket investment banker,
and an auditing firm such as AGCA, Inc. that has both the experience and resources to assist companies going public. Here, we can provide you with value added services to enable you to avoid unnecessary delay and costs for your IPO and years to follow as our management and working team have:
- been working with the “big 4” and have over 30 years of auditing experience on companies listed in United States, China, and Hong Kong,
- registered with the Public Company Accounting Oversight Board as a United States firm but with extended international and Far East experience.
- commercially experienced to understand the business and group structures of our clients, in United States, China, Hong Kong, and internationally,
- experience in working with and well acquaint with requirements of security lawyers, investors, and merchant bankers,
- offices and sufficient staff force in United States, China and Hong Kong and can finalize assignments within minimum time frame and costs.
Background on AGCA, Inc.
AGCA, Inc. is a member of Alliott Group with over 230 offices in 60 counties all around the World. Alliott Group is one of the top 30 alliances in the World and accordingly, can provide services to you at nearly all concerns, no matter where you are and the size of your operation. Since our start up in 1999, AGCA, Inc. has gained a prestigious reputation in the accounting industry. As one of the most respected names in our business, we have consistently been noted for providing an extensive range of high-quality services that exceed those of most traditional accounting firms.
Senior Executive Involvement from AGCA, Inc.
A high level of management involvement is an integral part of the client service to be provided to your company. AGCA is well versed in the US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS/IAS), and it also has tremendous experience working with the SEC as well as, NASDAQ, AMEX and other stock exchanges.
Our Hong Kong and China Alliance Offices
Following the opening of China, most companies are having or are planning to invest in or doing business in China. It may also be advantageous to form international group structures for administrative and tax purposes. Our alliance offices in Hong Kong and China are positioned to facilitate and assist foreign investors with advice in regulatory matters and tax filings, licensing requirements, negotiation in acquiring leases and equipment, accounting and auditing and, obtaining credit facilities. Our client’s wanting to set up operations in Hong Kong and China will have access to our business relationships with attorneys, bankers, information systems consultants and governmental officials.
Our Alliance with U.S. Securities Attorneys
Throughout the years of advising public companies with audit and regulatory filings before the SEC, we have developed a very close working relationship with various law firms with expertise in SEC laws and practices as well as legal practice in related areas.
Approach and Scope
We have the experience to assist you with all compliance issues and statutory requirements. If necessary, we will continue any analysis undertaken by your former accounting firm in regard to going public. Other matters that you will need to consider are:
- a comprehensive business model,
- a comprehensive business plan,
- selection of professionals and capital requirements,
- determination of how capital is going to be raised such as: PIPE transactions, reverse merger, IPO, etc.,
- audit process,
- registration process, and
- regulatory feedback and comments.
Who Should Go Public?
In the past, it was only the larger companies with a long history of profitability that went public. Today, companies with varying degrees of profitability and revenue growth may be candidates for public financing. However, established and start-up companies alike must understand that the process of becoming publicly traded is often complex and challenging.
Typical Methods of Going Public
1. Traditional Underwriting
- Average Time: 8 to 12 months
- Capital: Can raise more capital than other types of transactions
2. Reverse Merger
- Average Time: 3 to 6 months
- Capital: Does not raise capital, but stock is valued and tradable
3. Merger with Public Company
- Average Time: 4 to 8 months
- Capital: Can raise capital, and stock is valued and tradable
The IPO Process
The most common method of going public is through an Initial Public Offering (IPO). The process involves retaining an IPO team consisting of:
- Investment Banker – Endorses the request for a public offering
- Securities Attorney – Ensures proper filings, documents and registrations
- Auditor – Provides audited financials and ensures the correct transition to public company accounting
Once the IPO team has been appointed and the appropriate paperwork has been filed, it will most likely take a minimum of 90 days to complete the transaction. A registration statement must be prepared which will be reviewed by the SEC and other regulators who can approve a company going public. After the filing is completed, the underwriter will offer the securities to potential market makers (the road show) seeking subscriptions to purchase the company’s shares. When the subscriptions are sufficient, the IPO is closed, and the company is made public, and the company will then receive its portion of the proceeds.
Client References
Five of our current clients registered with the Security Exchange Commission:
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Name
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List on
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Stock Symbol
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China Ritar Power Corp.
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NASDAQ
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CRTP
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Gold Horse International, Inc.
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OTCBB
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GHII
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Highway Holdings Limited
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NASDAQ
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HIHO
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Lihua International Inc.
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NASDAQ
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LIWA
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Pansoft Co., Ltd.
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NASDAQ
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PSOF
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