Category Archives: Public Offering

SEC proposes rule changes intended to streamline disclosures of business operations, risk factors and legal proceedings

The SEC recently proposed revisions to Regulation S-K to streamline public companies’ disclosures of their business operations, risk factors and legal proceedings.  The proposed revisions affect Items 101(a) and (c), 103 and 105 of Regulation S-K.

Among other changes, the proposed rules would revise the requirements related to the general business description by adopting:

  • a more principles-based approach that will require each company to address matters material to its business,…
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Public offerings may continue, despite SEC shutdown.

The SEC’s Division of Corporation Finance has posted helpful FAQs about the impact of the government shutdown on registration statements for public offerings.  During the shutdown, the SEC will not declare registration statements effective, but companies still have several options that may enable them to pursue their offerings.

Well-known seasoned issuers can continue to file automatically effective registration statements, and companies with already effective shelf registration statements should be able to complete a takedown unless the terms of the offering would require the issuer to file a post-effective amendment.… More

Increasing Access to Public Markets: Rule 3-13 Relief

In a series of recent public statements (most recently in February 2018), the SEC has encouraged companies to pursue relief under Rule 3-13 of Regulation S-X—the regulation that specifies the form and content of financial statements required by public companies. Pursuant to Rule 3-13, the SEC Staff may permit the omission of financial statements that are otherwise required under Reg S-X or the substitution of such required financial statements with other statements of comparable character.… More

Investor Concern Regarding Dual-class or Multi-class Stock Continues

On September 26, 2017, proxy advisory firm Institutional Shareholder Services (ISS) released the results of its annual Governance Principles Survey, which showed that 43% of surveyed investors consider multi-class capital structures with unequal voting rights inappropriate for a public company under all circumstances.  An equal percentage felt such structures may be appropriate in the presence of protections for low-vote shareholders.  Only 5% supported this structure without limitations. … More

SEC Staff Clarifies Registration Statement Relief for Omitting Financial Information

On August 17, 2017, the SEC staff issued two new C&DIs (Securities Act Forms 101.04 and 101.05) to clarify the financial information that emerging growth companies (EGCs) and other issuers can omit from confidentially submitted draft registration statements.  An issuer can omit interim financial information if it anticipates that the registration statement will not, at the time of the contemplated offering (or, in the case of non-EGCs,… More

SEC Expands Confidential Filing Process

Effective today, July 10, 2017, the SEC’s Division of Corporate Finance will accept draft registration statements for review on a confidential basis from an expanded group of issuers. The confidential submission process, which was formerly limited to IPOs by emerging group companies, or EGCs, is now available to most issuers and also in conjunction with follow‑on offerings in the first year after the IPO or an initial listing on a stock exchange.… More

Happy 5th Anniversary to the JOBs Act—EGCs Should Prepare for New Disclosure Obligations

The JOBs Act was signed into law on April 5, 2012 and created Emerging Growth Companies, or EGCs, which are eligible to comply with reduced disclosure and other requirements under the federal securities laws.

The definition of an EGC, which in general is a company with annual gross revenues of less than $1 billion during its most recent fiscal year, is expansive.   Over 80% of IPOs since the JOBs Act have been completed by EGCs. … More