The Importance of Full Disclosure for Verification

A topic that can not be reiterated enough is the necessity of Clients to fully disclose the state of their project or company - not where it could or can be but rather where it is today.

For instance, if a Client states having invested US $2.0 M into a project as “cash,” he/she will need to provide the necessary documentation, which may include audited financial statements, bank documents, invoices, receipts, etc. or a combination thereof.  This can demonstrate “cash” investments that have been made and are to be invested.

Another example would be the value of the project or company As-is Where-is as of today’s date and not what an appraiser said two years, one year or even 6 months ago. The question that a client needs to ask is "what would I sell it for today?"

From the beginning and throughout the process, Capital Corp Merchant Banking puts forth a series of such questions that are specially designed to lay the foundation for going forward.  Should the Client at any point during this process not to fully declare or disclose a certain aspect that may or may not be fully accurate, the consequences can be detrimental and lead to a default of the project.


Respectfully,

Capital Corp Merchant Banking