6. Life as a Public Company 57

Fiduciary laws must be carefully observed after a public offering due to the interests of the new shareholders. Whenever there is a potential conflict of interest between the company and its fiduciaries, management should obtain independent appraisals or bids and independent director approval (or even shareholder approval), depending on the nature and significance of the transaction.
Costs
As mentioned previously, a further consequence of a company’s being publicly held is the expense it entails. Significant costs and executive time is often incurred when periodic reports are prepared and then filed with the SEC. Board and shareholder meetings/communications may also be expensive.
Because of its responsibilities to the public shareholders, the board of directors and the audit committee are significantly more important in a public company. If the board were previously composed entirely of insiders, a number of outside directors would need to be added (which will likely result in incurring additional costs) to satisfy the NYSE or the NASDAQ National Market listing requirements.
Sample compliance calendar – assumes that the registrant is an accelerated filer
6/30/04
Fiscal Year 2004 Second Quarter End
7/17/04
Effective Date of Registration Statement – Company becomes a reporting
company
8/09/04
Second Quarter Form 10-Q due (unless 6/30/04 financials are included and
discussed in Registration Statement)
9/30/04
Fiscal Year 2004 Third Quarter End
11/09/04
Third Quarter Form 10-Q Due
12/31/04
Fiscal Year 2004 Year End
2/15/05
Schedule 13Gs due at SEC
2/15/05
Form 5s due at SEC
3/01/05
Initiate Proxy search
3/15/05
File Preliminary Proxy Statement, and form of Proxy with the SEC and NASD,
if necessary
3/01/05
Fiscal Year 2004 Form 10-K due
3/30/05
Fiscal Year 2005 First Quarter End
4/02/05
Record Date – Annual Meeting of Stockholders
4/16/05
File Definitive Proxy Statement, form of Proxy and Annual Report to
Stockholders
4/16/05
Mail Definitive Proxy, form of Proxy and Annual Report to Stockholders
5/05/05
First Quarter Form 10-Q due
5/30/05
Annual Meeting of Stockholders
Section 11(a) Earnings Statement available to security holders as soon as
7/16/05
possible covering a period of at least 12 months beginning after the effective
date of the Registration Statement
Note: If a filing date falls on a Saturday, Sunday, or holiday, the document may be filed on the next business day (Rule 0-3(a)).
PricewaterhouseCoopers LLP Roadmap for an IPO
57

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