When is a Form S-1 Confidential?

Securities Lawyer 101 - When is Form S-1 Confidential

Securities Lawyer 101 Blog

The Jumpstart Our Business Startups Act (“JOBS Act”) allows an “emerging growth company” to submit a draft of its registration statement and exhibits to the Securities and Exchange Commission (“SEC”) on a confidential basis.  This is particularly useful to companies in going public transactions who are unfamiliar with the SEC registration statement process. Issuers filing initial public offerings as well as direct public offerings can submit their filings on a confidential basis.

This blog posts addresses the common questions we receive about the confidential submission process for Form S-1 registration statements.

Q. When does an emerging growth company have to file its Form S-1 registration statement if it wants the submission to be confidential?

A. The JOBS Act requires that emerging growth companies file the initial confidential submission of its Form S-1 Registration Statements and all amendments with the SEC within 21 days prior to the anticipated effectiveness of the registration statement or road shows.  These prior confidential submissions should be included as exhibits to the company’s later publicly filed registration statement, if any.  This applies to both public companies and companies involved in going public transactions.

Q. How long will my company’s Form S-1 registration statement remain confidential?

A. Registration statements submitted to the SEC on a confidential basis do not remain confidential if a company goes forward with its Direct Public Offering, Initial Public Offering (“IPO”) or pre-IPO offering.

Q. Will SEC comment letters to my company’s registration statement and company responses remain confidential?

A. The registration statement comments and responses will become publicly available after the completion of the securities offering but not earlier than 20 business days following the effective date of the registration statement.

Q. What are the benefits of confidential submission of a Form S-1 registration statement to the SEC?

A. The confidential submission of a registration statement allows a company to keep the registration statement confidential and out of the public domain until it decides whether it will proceed with its public offering.  If a company abandons its offering before its registration statement becomes effective, its submission remains confidential.

Q. If I submit my company’s registration statement on a confidential basis can the company still announce its registration statement or IPO?

A. SEC Rule 135 allows an issuer to announce limited information about the confidential submission of a registered securities offering submitted to the SEC.

Q. Does anything contained within a confidentially submitted Form S-1 registration statement remain confidential?

A. Limited information from the confidential submission of a registration statement can remain confidential. Rule 406 allows a company to keep portions of its registration statement confidential.  Rule 406 requires the issuer to state the specific reasons why a confidential request is made and provide a detailed explanation of why, based on the related facts and circumstances, disclosure of the information is unnecessary to protect investors.  The most common request for confidential submission of certain information in a registration statement is made for trade secrets, proprietary information, confidential commercial or financial information that would cause substantial competitive harm to the issuer if disclosed.

It should be noted that Form 10 registration statements under the Securities Exchange Act does not provide many of the benefits of Form S-1 including unrestricted securities and confidential submission. Once a Form S-1 is effective, the issuer can locate its sponsoring market maker to apply for its ticker symbol by filing a Form 211 with FINRA if it filed a secondary registration statement.  Companies not qualifying for a stock exchange often elect to go public on the OTC Markets OTCQB or OTCQX.

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
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855