SEC Registration Statements And Direct Public Offerings Q & A
SEC registration statements are the most efficient and reliable method for a private company to obtain public company status. Using a registration statement, companies provide transparency to investors and avoid the risks of reverse merger transactions. This blog post addresses some of the most common questions we are asked about SEC registration statements and and the going pubic process.
A. If a company registers a public securities offering as part of a going public transaction, the Securities Act of 1933, as amended (the “Securities Act”) requires that the company to file a registration statement with the SEC before it can offer or sell its securities.
Q. Will the information contained in the registration statement be available to the public?
Q. What registration statement form should a private company use if it decides to register shares for its going public transaction?
Q. What disclosures are required by a Form S-1 registration statement?
A. A S-1 Registration statement requires expansive disclosures. The form has two main sections Part I of the Prospectus which contains material disclosures about a company’s business operations, financial condition, and management. Registration statements also must include financial statements audited by an independent certified public accountant registered with the Public Company Accounting and Oversight Board (“PCAOB”).The company must provide the prospectus to all persons who purchase the securities registered as well as anyone who is made an offer to purchase the securities. Part II of the Prospectus contains additional information that the company is not required to deliver to investors. Even though the company is not required to provide this information. It is available on the SEC’s website.
Q. Will the SEC review the Form S-1 registration statement?
A. The SEC reviews registration statements including those on Form S-1 for compliance with its disclosure requirements. If a registration statement is not complete or inaccurate, the SEC will render comments to the Company. The company must respond to the comments and provide amendments to its registration statement addressing any deficiencies. Once the SEC is satisfied that the registration statement complies with its disclosure requirements it will declare the registration statement effective.
Q. When can an issuer 0ffer and sell the securities that are covered by the Form S-1 registration statement?
A. The company can sell its securities when the SEC declares the S-1 registration statement effective.
Q. When an issuer’s registration statement is declared effective, will the SEC assign a ticker symbol?
A. No, the Financial Industry Regulatory Authority (“FINRA”) not the SEC assigns ticker symbols. In order to obtain a ticker symbol, a sponsoring market maker must submit a Form 211 with FINRA on the company’s behalf. This is typically done after the registration statement has been declared effective by the SEC.
Q. When can the SEC refuse to declare a registration statement on Form S-1 effective or suspend the effectiveness of a registration statement?
A. The SEC can refuse to declare a registration statement effective or suspend the effectiveness of a registration statement if it determines that the registration statement is misleading, inaccurate, or incomplete.
Any company planning to offer and sell securities, or go public using an SEC registration statement requires the assistance of an experienced securities lawyer to guide it through the SEC registration process and ensure all required disclosures are made. Hamilton & Associates has assisted issuers with going public transactions and SEC registration statements on Form S-1 for more than ten years.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers B
renda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855