Client
Privately-held Travel, Global Trade, & Digital Identify Solutions ($34.5M Revenue)
Project Overview
Preparing Financial Statements and MD&A for annual audit and interim review to be included in the BBAI’s schedule 14A Proxy Statement filed with SEC. The project involved multiple workstreams, collaborating with management, acquirer, and external auditors to reverse private company accounting alternatives, prepare comparative financial statements for two distinct reporting periods, and provide audit support. Drafting an SEC-filed Proxy’s Management Discussion and Analysis section required an in-depth understanding of the entity’s operating performance, showcasing a strategic fit for a successful merger.
Project Landscape
- TECHNICAL ACCOUNTING ANALYSIS to restate historical financial statements to reverse the impact of the private company accounting alternatives including accounting for goodwill and leases with additional technical accounting analysis and documentation.
- Financial Reporting burden with ACCELARTED REPORTING TIMELINES due to the SEC filing requirements as a result of the acquisition, as well as a new requirement to prepare interim financial statements & MD&A.
- LACK OF INTERNAL RESOURCES required additional external resources with the right experience and competency needed for technical accounting and financial reporting.
- Project management function to facilitate timely coordination with MULTIPLE STAKEHOLDERS (external auditors, valuation specialists, tax and accounting advisory firms, law firms, and acquirer executive team).
Our Solution
- Technical Accounting Support - Our advisory team researched, drafted technical memos, and executed step-up adjusting entries to align financial reporting with SEC requirements for the reversal of private company alternatives for goodwill (ASC 350) and leases (ASC 842). We provided complex technical accounting solutions for financial reporting, including impairment of long-lived assets (ASC 360) and goodwill (ASC 350), implementation of ASC 326 (CECL), and revenue recognition (ASC 606) analysis.
- Accounting Memos - Additional accounting areas where we provided technical accounting memos included Capitalized Software Development Costs (ASC 985), CECL adoption/implementation (ASU 2016- 13), Unit-based compensation (ASC 718/ ASC 710), Revenue Recognition (ASC 606), and Going concern (ASC 205-40).
- Financial Statements - Our team performed various procedures for compiling both sets of financial statements and disclosures through numerous trial balance updates, including topside adjustments across multiple periods, completing GAAP disclosure checklists, and executing cutoff testing.
- MD&A - The team drafted the MD&A, including tables for condensed financial information, and coordinated with management, the external auditor, and the law firm to provide timely deliverables to the BBAI legal team for the proxy filing.
- Project Management - The Alliance team efficiently handled external auditor requests for certain revisions and comments with a quick turnaround within tight deadlines, ensuring satisfactory coordination with the auditor, management, management’s valuation and tax specialists, and acquirer BBAI.
The Impact
The client greatly appreciated the precision and speed with which the team worked. They attributed their seamless audit and SEC filing process to the work of The Alliance Group!
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