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| Screen Test for a Direct Public Offering |
| Nine: The
Company has, or can obtain, audited financial statements for at least the last two fiscal
years. |
| This is the requirement for the new securities law filing forms
made available to small businesses (under $25 million annual revenue) by the federal
Securities and Exchange Commission. There are other forms, for offerings of up to $5
million, which allow lower standards of review by outside auditors. Unless the company has
been in business less than two years, we suggest that you not try to save
accountants’ fees by using unaudited (even "reviewed") numbers. There are
situations when auditing prior years will be difficult and, rarely, impossible. That
usually occurs when a company carries large inventories and did not have a year-end
physical count, observed by a representative of the auditors or other independent
professional. In those cases, or where the accounting records need to be put in auditable
shape, it may be best for the company to arrange some private financing until it is ready
for public scrutiny. |
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