Post-SPAC transaction: Challenges and benefits of operating as a public company
- Efficiency, timeliness, and accurate financial close and reporting
- Integrated reporting
- Non-financial reporting – KPI, business metrics dashboards, etc.
- Policies and procedures
- Controls within and across business units
- Potential areas for operational improvement
- Cybersecurity governance and reporting
- Scalability and sustainability
- Current infrastructure and integration across applications
- Data retention and retrieval
- Business continuity and disaster recovery
- Internal and board reporting dashboards
- Audit of historical data
- Retrospective and prospective U.S. GAAP accounting and disclosure requirements
- SEC reporting timeline adherence
- Potential tax implications – clarifying tax positions for the registrant, shareholders, and directors
- SEC compliance
- NYSE/NASDAQ listing regulations
- Sarbanes-Oxley (SOX) compliance
- Code of ethics and whistleblower hotline
- Board structure and composition
- Establishing audit and other committees
- Risk identification and mitigation
Operating as a public company comes with distinct challenges and benefits. The primary benefit is the ability to raise capital to drive growth through capital expenditures, reducing one’s debt-to-equity ratio, and funding significant research and development for new products and services. Additionally, continued capital may be available via secondary offerings. The visibility that comes with being a public company can be advantageous in extending companies’ market reach, establishing new customer bases and distribution channels.
However, the growth potential fueled by the capital infusion comes at an operating cost. Public companies are held to significantly greater regulatory scrutiny by the Securities and Exchange Commission (SEC), resulting in a loss of autonomy compared to private companies. Further, they need to strengthen corporate governance to comply with the Sarbanes-Oxley (SOX) Act; face increased financial disclosures requiring more sophisticated financial reporting; and must build a robust IT infrastructure and an investor relations function.
Subject matter expertise
CPA, Partner, CohnReznick Advisory
CPA, CISA, CFE, ACA, Partner, CFO Advisory Leader
Let’s start a conversation about your company’s strategic goals and vision for the future.
Please fill all required fields*
Please verify your information and check to see if all require fields have been filled in.