The Emerging Growth Company & Confidential Submission of Draft Registration Statements

Confidential Submission of Draft Registration Statements - Emerging Growth Company

Securities Lawyer 101 Blog

In order to qualify for many of the benefits created by Title I of the JOBS Act, an issuer must qualify as an Emerging Growth Company. The JOBS Act created a new disclosure standard for Initial Public Offerings (“IPO”) by of companies that qualify as emerging growth companies.  Emerging Growth Companies have reduced reporting, accounting, auditing and other corporate governance requirements. Additionally, an Emerging Growth Company whose common equity securities have not been previously sold pursuant to an effective registration statement under the Securities Act of 1933 may confidentially submit to the Commission a draft registration statement for confidential nonpublic review. 

Determining Emerging Growth Company Status

An EMG is defined in the Securities Act and the Exchange Act as an issuer with “total annual gross revenues” of less than $1 billion during its most recently completed fiscal year. The phrase “total annual gross revenues” means total revenues as presented on the income statement presentation under U.S. GAAP (or IFRS as issued by the IASB, if used as the basis of reporting by a foreign private issuer). If the financial statements of a foreign private issuer are presented in a currency other than U.S. dollars, total annual gross revenues for purposes of this test should be calculated in U.S. dollars using the exchange rate as of the last day of the most recently completed fiscal year. In addition, if the financial statements for the most recent year included in the registration statement are those of the predecessor of the issuer, the predecessor’s revenues should be used when determining if the issuer meets the definition of an emerging growth company.

Confidential submission of Draft Registration Statements

Issuers submitting draft registration statements on a confidential basis under Securities Act Section 6(e), should disclose that it is an emerging growth company on the cover page of its prospectus. Securities Act section 6(e) provides that confidential registration statement submissions must be publicly filed with the SEC at least 21 days before the issuer conducts a road show.

A confidential submission of a draft registration statement is not required to be signed by the registrant or by any of its officers or directors, nor is it required to include the consent of auditors and other experts, as it is not filed with the Commission.

If a foreign private issuer chooses to take advantage of any benefit available to emerging growth companies, then it will be treated as an emerging growth company and will be required to publicly file its confidential submissions at least 21 days before the road show. If the foreign private issuer chooses not to take advantage of any emerging growth company benefit, then it may follow the Division’s policy on Non-Public Submissions from Foreign Private Issuers.

Since the JOBS Act became effective, most Emerging Growth Companies filing registration statements for an IPO have confidentially filed at least one registration statement prior to filing publicly.  The confidential submission allows Emerging Growth Company to test the waters about the SEC comment and answer process without ever filing their registration statement publicly.   In the event the Emerging Growth Company decides not to proceed with its registered offering, it can conduct its private placement or other exempt offering.

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   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 and compliance 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