It generally takes between six and nine months to go public via direct public offering. These times are estimates and subject to change, particularly if any information provided needs to be revised for incompleteness or inaccuracies. The actual time-frame will vary according to the current size of the company and state of a company’s financial books and records. An organized firm that has internally generated income statements, balance sheets, and cash flow statements will be in good shape for this process. Books and records prepared by a CPA, or reviewed or audited by an accounting firm, are best. A start-up will usually take about 60 days to be audited, while a large operating business may take 90 days.
Preparation of the documents and data required to begin drafting a registration statement to be filed with the SEC takes a few weeks, again depending on how well-organized a company is. Once the information we require is aggregated, the registration statement is normally drafted within three to four weeks. This is usually done concurrent with the accounting work and financial audits. When the audited financial statements are prepared, the accounting and legal documents are integrated and filed with the Securities and Exchange Commission (SEC). We typically draft the registration statement and utilizes a third-party firm to convert the final filings to a technical format acceptable to the SEC.
The review and comment phase with the SEC usually follows a path: the SEC typically responds with comments to the initial filings in 30 to 35 days. MP is then responsible for addressing each of the comments, which may take several days. Once completed, a revised registration statement is filed with the SEC for additional review and comments. The typical review, comment and amendment cycle lasts between 90 to 120 days or longer, depending on the company and its advisors.
Finally, the stock exchange review process typically presents few problems for most companies if they satisfied all the SEC requirements. Each stock exchange has a different review process, though, and may look at different factors, such as the number of shareholders, amount of capital invested, and the relationship between and among all shareholders. This process is like the comment process with the SEC and will generally last 30 to 60 days.