The period between signing a definitive merger agreement and closing the de-SPAC transaction is among the most operationally demanding phases for a target company’s management team. Companies that treat this window as a mere waiting period for SEC clearance often find themselves scrambling to meet public company obligations immediately after closing.

Financial reporting infrastructure

The most significant transition for Southeast Asian targets is the move from local accounting standards to U.S. GAAP. This conversion affects revenue recognition, lease accounting, stock-based compensation, and consolidation methodologies, among other areas. Companies should engage a U.S. GAAP-experienced audit firm and begin the conversion process at least six months before the anticipated closing date. The chart of accounts must be restructured, accounting policies documented, and historical financial statements restated to provide the comparative periods required by SEC regulations.

Internal controls and Sarbanes-Oxley

Newly public companies benefit from a temporary exemption from the auditor attestation requirement under SOX Section 404(b), but the management assessment obligation under Section 404(a) applies from the first annual report. Establishing an internal controls framework during the pre-closing period, including entity-level controls, transaction-level controls, and IT general controls, prevents a disruptive remediation exercise after the company is already subject to public reporting obligations.

Governance and disclosure readiness

Board composition, committee charters, insider trading policies, and disclosure controls must all be in place by closing. Recruiting independent directors with relevant public company and industry experience takes time, particularly when candidates must satisfy NASDAQ’s independence requirements and bring familiarity with the Southeast Asian operating environment. Companies that begin this recruitment process concurrently with the proxy preparation are consistently better positioned at closing.