While the health intelligence company aimed for a SPAC transaction, CFGI was tapped for extra support
The company was preparing for a special purpose acquisition company (SPAC) transaction. It knew that help was needed for the public readiness journey, especially when it came to coordinating with external parties.
CFGI proposed standing up financial planning and analysis (FP&A), which the business did not currently have, and providing support for the project management organization (PMO).
As we got to work with these tasks, it became clear that more assistance was needed, and the company agreed.
CFGI cleared obstacles to keep timelines on track
The next level of support that the company required was help with accelerating the close process. Our experts entered, ready to facilitate alignment among all the relevant parties, from finance and beyond. It was essential to keep everybody up to date, even as timetables had to be updated due to shifting factors like auditing requirements and comments from the U.S. Securities and Exchange Commission (SEC).
The health intelligence company was already going through a Public Company Accounting Oversight Board (PCAOB) financial statement uplift as well as a first-quarter review, and the company was having difficulty meeting its target dates. After CFGI’s team assessed the current state of the business’s people, processes and technology, we devised a roadmap for a reasonable timeframe in which to close the books. Our timeline roadmap included finalizing the transaction by working with appropriate teams (e.g. legal, executive, etc.), closing Q1 and Q2 with the additional detail required for SEC reporting, creating appropriate analysis and documentation for presentation to the SEC and improving processes to ensure public company compliance moving forward.
Our experts got to work immediately, learning how to improve workflows by participating directly in the process itself. One of our experts even served as an interim accounting controller while closing out the audit and documenting relevant processes to help a new hire get up to speed in the second quarter. When the next controller took over, CFGI was able to hand off a streamlined quarterly inventory close process.
In particular, our team focused on assisting with:
- Accruals: CFGI implemented a process for reviewing invoices while supporting the team that was responsible for these items. We completed a full review of the accruals going back to 2019, allowing us to help amend quarterly numbers from previous periods as needed.
- Inventory: Our experts discovered that a previous company policy meant items costing less than $1,000 were not accounted for. We determined that, in aggregate, this inventory represented a material sum. Subsequently, we developed a method for estimating inventory that was no longer countable and stood up a process to make sure this was not an issue in the future. CFGI also helped ensure that product inventory was aligned across all relevant systems and identified additional reserves needed for COVID-19 inventory that will be obsolete. In addition, we stood up internal reporting and variance analyses used for management review and public company SEC reporting.
- Revenue: CFGI worked diligently with the company to help ensure that revenue figures were accurate and well supported. This required reorganizing the finance function and coordinating with the external auditors to ensure the review went smoothly. CFGI built manual revenue recognition reporting for management and auditor review, which compiled information from multiple systems. We also notified management that streamlining the systems was necessary for public company compliance — a recommendation that they took.
Meanwhile, our PMO team developed a holistic plan to help support the company’s transition. This included updating financial statements dating back to 2018. Experts from our business transformation practice were brought in to assist with the completion of these important tasks.
CFGI’s experts also worked directly with third parties, including auditors, and provided substantial support to ensure the company completed its audit successfully.
Our full suite of services for comprehensive support also included working with the company’s enterprise resource planning (ERP) system to support the client team as well as interacting with human resources and communications consultants, among other external parties.
Throughout all of these significant developments, CFGI also prioritized effective change management. We proactively communicated with stakeholders and oversaw a variety of effective transformations within the company to help set it up for success in the public eye. We also routinely compiled decks and analyses for project status, cash flow issues and financial positions that were used by its executives to communicate to the Board and external parties.
