On June 20, 2006, Paul Watts, a capital markets partner, at Baker Tilly International in London gave a talk on key accounting issues to consider for an intial public offering (IPO) in the AIM market.
When preparing for floatation, a company should evaluate what stage of business it is at, whether there are sustainable revenues, and whether it should spin off non-core assets.
The company should ensure that it has a seasoned chief financial officer that has experience taking companies public, a member of the board of directors that is local in the United Kingdom who is able to answer investors' questions, and a member of the board of directors who is experienced in the company's industry sector.
Investors are usually interested in companies with a global focus, and have acceptable corporate governance including financial controls. United States companies listed in the AIM market include: XL Techgroup, Inc., 121Media, Inc., and Entelos, Inc.
The company will need to have audited historical financial statements. Usually investors prefer three years of historicals, but companies that have existed for less than three years may still apply to the AIM market. For United States companies, US GAAP is acceptable.
The board of directors will need to declare that procedures have been established to provide a reasonable basis for the directors to make proper judgments as to the financial position and prospects of the issuer and its group.
The directors will need to make a statement that in their opinion, after due and careful inquiry, the working capital available to the company and its group will be sufficient for its present requirements, meaning for at least twelve months from the date of admission to the AIM market.
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