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Reverse Merger and SEC Compliance for Life Sciences Company

Following its reverse merger with a pre-commercial private entity, a publicly traded life sciences company faced complex technical accounting issues associated with the transaction, which were heightened by the private entity having never been subject to a Public Company Accounting Oversight Board (“PCAOB”) audit. FTI Consulting was engaged to address these challenges, provide accounting advisory and audit support, and ensure timely compliance with SEC regulatory requirements for the newly combined entity.

Our Impact:

With FTI Consulting’s detailed workplan, the client was able to resolve critical U.S. GAAP accounting issues, including all aspects of business combination accounting and related PIPE financings, within the SEC’s 75-day window for significant acquisitions.
With all accounting positions thoroughly documented and communicated with external auditors, the client completed an efficient and on-time audit process.
The client achieved timely post-merger compliance and retained FTI Consulting as an ongoing advisor for technical accounting support.

Our Role:

FTI Consulting provided technical accounting, regulatory and audit support, leading financial reporting and compliance efforts throughout the reverse merger to ensure timely SEC compliance for the newly combined entity.
Our experts provided comprehensive guidance on complex accounting issues, including the assessment of the accounting acquirer, preferred equity classification, contingent value rights, leases and modifications to the capital structure.
The team designed and executed project management strategies that enabled the private target to achieve audit readiness within an accelerated timeline, identified the regulatory requirements for the reverse merger and prepared key SEC filings, including audited financials and pro forma statements.
Following the transaction, FTI Consulting provided interim accounting expertise to augment the client’s internal finance team, ensuring operational continuity and regulatory compliance during a critical transition period.