Selling Stockholder Disclosures in Form S-1 Registration Statements

Securities Lawyer 101 - Smaller Reporting Companies

Securities Lawyer 101 Blog

Companies going public have a variety of structures for their transactions.  Companies can go public using an initial public or direct public offering.  They can obtain their shareholders by selling stock in an initial public offering or direct public offering.  Unlike Form S-1, a Form 10 registration statement does not create unrestricted shares and a Form 10 cannot be filed confidentially. When a confidential registration statement is used, the identity of selling shareholders are not readily available to the public on the SEC’s Edgar system. Companies may also obtain shareholders in a transaction that is exempt under one of the exemptions provided by Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). At some point these shareholders will want liquidity of their investment.

Private companies going public should consider Form S-1 filing requirements when contemplating liquidity for their investors.  Private companies seeking to raise capital often file a registration statement on SEC Form S-1 to meet certain requirements of the Financial Industry Regulatory Authority when going public. Upon filing, a Form S-1 is reviewed by the  Securities and Exchange Commission, who may render SEC Comments. Once a Form S-1 is declared effective by the SEC, the company becomes subject to SEC reporting requirements.  All companies qualify to use and must comply with Form S-1 registration statement requirements. Private companies going public should be aware of the expansive disclosure required in registration statements filed with the SEC prior to making the decision to go public. Companies conducting securities offerings should also be familiar with the Form S-1 quiet period.

A registration statement on Form S-1 can be used to register various types of securities offerings and transactions with the SEC.   Hiring the right Form S-1 Registration Statement Lawyer can help the company structure its transaction in the most effective manner. Form S-1 is used more often by issuers than any other type of registration statement form and as a result, it provides flexibility.   Form S-1 registration statements can be used by existing public companies or companies in connection with a going public transactions.  Regardless of whether the company is public or private, Form S-1 can be used to registered various types of transactions.

Registration of Regulation D Shares

Companies using a Regulation D or crowdfunding exemption from the SEC’s registration statement requirements often register the resale of the shares sold in their offering so that they have a sufficient number of shareholders for FINRA to assign a ticker symbol.

SEC Form S-1 Registration Statements are the most common form used to register shares held by selling stockholders.  Form S-1 attorneys can guide the issuer through the most beneficial structure for their Form S-1 registration statement and Form 211 submission.  Companies registering stock on a resale registration can simultaneously register shares for a capital raising transaction.  This capital can be used for operating capital or to provide funds to offset going public costs. Companies not qualifying for a stock exchange often elect to go public on the OTC Markets OTCQB or OTCQX.

Regardless of the structure chosen, Form S-1 requires the registrant to provide specific selling stockholder disclosures.  These disclosure requirements are set forth in Item 507 of Regulation S-K of the Securities Act of 1933, as amended. Item 507 of Regulation S-K requires the following selling stockholder disclosures in Form S-1 for both initial and direct public offerings:

• Name of each selling security holder and if the selling stockholder is a corporate entity, its control person must be provided
• Relationship between each selling shareholder and the company
• Relationship between each selling shareholder and one another
• Number of shares being registered
• Number of outstanding shares held before and after the offering
• Percentage of shares owned before and after the offering assuming all shares are sold

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 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