Case Study: Initial Public Offering of Foreign Medical Diagnostic Company

Challenge

Company B, a $100MM foreign medical diagnostic company initiated IPO on domestic Form S-1, converting accounting basis from UK GAAP to US GAAP and reporting currency from Pounds Sterling to the US Dollar.

CFGI Solution

  • Evaluated historical UK GAAP financial statements to identify differences with US GAAP accounting
  • Prepared technical memos and position papers to document differences between UK GAAP and US GAAP and to support conclusions under US GAAP
  • Prepared adjusting journal entries to convert 5+ years of historical financial statements to US GAAP / US Dollar presentation
  • Built consolidation model to bridge local / statutory books and records to financial statements prepared under US GAAP and in compliance with Reg. S-X
  • Supported US GAAP audits and drafted financial sections of Form S-1, including F pages, MD&A, Summary and Selected Financial Data, Capitalization and Dilution
  • Drafted responses to accounting comments received from the SEC
  • Prepared amendments to financial sections of Form S-1 to update financial statements through most recent fiscal quarters and in response to SEC comments
  • Prepared all pro forma and pro forma as adjusted disclosures, and revised Form S-1 to reflect the impact of reverse share split

Outcome

  • GAAP and currency conversion work, US GAAP audits and initial confidential submission of Form S-1 completed in 10 weeks; Company B successfully completed their initial public offering
  • CFGI continues to assist Company B with internal controls work, SEC reporting, accounting for stock-based compensation and system implementation efforts