Simultaneously or subsequent to the effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”) for an initial public offering (IPO) or direct public offering (DPO), issuers can file a registration statement under the Securities Exchange Act of 1934 (“Exchange Act”), covering a class of securities. There are two types of Exchange Act registration statements. These are Form 10 and Form 8-A. This allows the issuer to list the securities registered in the initial or direct public offering on a national securities exchange. An Exchange Act registration statement cannot be used to go public or register a DPO or IPO and it does not create unrestricted shares.
Form 8-A and Form 10 are Exchange Act registration statements used to register a class of securities pursuant to Section 12(g) of the Exchange Act. Form 10 disclosures are similar to those found in a Form S-1 Registration Statement under the Securities Act. Form 8-A requires significantly less disclosure than Form 10. Because of this, Form 10 is rarely used by issuers which are required to file reports under Section 13 or 15(d) of the Exchange Act.
Using a Form S-1 Registration Statement to Go Public
Private companies that go public commonly use a registration statement (“Registration Statement”) on Form S-1 under the Securities Act of 1933, as amended (the “Securities Act”) to go public. When a Form S-1 Registration Statement is used to go public, the company will submit the Registration Statement to the Securities & Exchange Commission (the “SEC”), registering securities it plans to sell or securities held by its shareholders (“Selling Shareholders”).
SEC Comments on Form S-1 Registration Statements
Smaller Reporting Companies that go public using Form S-1 should anticipate SEC comments to the Registration Statement from the SEC. The SEC reviews and may comment on the disclosures in the Form S-1 Registration Statement. Upon confirmation that the SEC is satisfied that the issuer’s disclosures satisfy the requirements of the securities laws, the SEC will declare the Registration Statement effective and the securities may be sold. Read More
Companies going public with Form S-1 have several options in how to structure their transaction when registering securities with the Securities and Exchange Commission (“SEC”). Form S-1 enables issuers to raise capital using the registration statement or register shares on behalf of existing shareholders. If the issuer seeks to raise capital using the S-1’s registration statement expansive disclosure is required of the intended use of proceeds.
Form S-1 is the most commonly used registration statement statement filing with the Securities and Exchange Commission (“SEC”). This blog post addresses the summary information section of Form S-1. The requirements of the section are located in Items 501 and 502 of Regulation S-K. The goal of the summary section of Form S-1 is to highlight selected information that is presented in greater detail elsewhere in the registration statement.
The S-1 summary does not contain all of the information required under the specific headings addressed. As such, the Form S-1 summary section should reference the sections summarized. The section includes summaries of Business, Securities, Risk Factors, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Financial Statements and other material information. Read More
Once the SEC staff declares your company’s Securities Act registration statement on Form S-1 effective, the company becomes subject to the SEC’s reporting requirements under the Securities Exchange Act of 1934. These rules require your company to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC on an ongoing basis.
If your company qualifies as a “smaller reporting company” or an “emerging growth company,” it will be eligible to follow scaled SEC reporting requirements for its reports.
Once a company begins compliance with SEC reporting requirements, it will be required to continue reporting unless it satisfies one of the following “thresholds,” in which case its filing obligations are suspended: Read More
The Regulation A + offering integration rules prevent companies from improperly avoiding registration by dividing a single securities offering into multiple securities offerings to take advantage of Securities Act exemptions that would not be available for the combined offering. Regulation A also known as Regulation A+ contains integration safe harbor provisions. Under Rule 251(c), a Regulation A+ offerings will not be integrated with prior offers or sales of securities. Subsequent offers or sales in Regulation A+ will not be integrated with securities offerings that are:
- registered pursuant to Securities Act, unless the abandoned Regulation A + offering provisions are applicable
- conducted pursuant to Rule 701;
- conducted pursuant to employee benefit plans;
- conducted pursuant to Regulation S;
- conducted pursuant to Regulation Crowdfunding; or
- conducted more than six months after the completion of the Regulation A + offering.
The Securities Act of 1933 is often called the “truth in securities” law. It has two basic objectives: to require that investors receive financial and other important information about securities being offered for sale, and to prohibit deceit, misrepresentation, and other fraud in the sale of securities.
When an issuer files a Form S-1 registration statement, it must provide specific Form S-1 risk factor disclosures about its business plan, its operating history and financial condition. Risk factors are a primary part of Form S-1 registration statement disclosures. Item 503 of Regulation S-K sets forth the requirements for risk factor disclosures. Read More
A registration statement on Form S-1 can be used to register various types of securities offerings with the Securities and Exchange Commission (“SEC”). Form S-1 provides issuers with flexibility in the types of securities that can be registered. Form S-1 is used more often by issuers than any other type of registration statement form. The form 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.
- Initial Public Offering (“IPO) which is an offering of an issuer’s securities through an underwriter.
- Direct Public Offering (“DPO”) which is an offering of an issuer’s securities without an underwriter.
A company becomes subject to SEC reporting requirements by filing a registration statement on Form 10 or Form 8-A under the Securities Exchange Act. Upon effectiveness, the company becomes subject to the SEC’s reporting requirements. These SEC reporting requirements include filing annual, quarterly, and current reports. Additionally, the company’s shareholders and management become subject to various requirements discussed below upon effectiveness of the company’s Form 10 registration statement or Form 8-A
A company whose Form 10 has been declared effective must comply not only with the SEC’s periodic reporting requirements, it must also comply with the SEC’s proxy rules whenever its management submits proposals to shareholders that will be subject to a shareholder vote, usually at a shareholders’ meeting. Read More