SEC Announces Procedures for secret Submission of Registration S…

SEC Announces Procedures for secret Submission of Registration S…

SEC Announces Procedures for secret Submission of Registration Statements

Under the Securities Act of 1933, as amended (the “Securities Act”) any offer and sale of securities must either be registered on a registration statement filed with the Securities and Exchange Commission (“SEC”) or the offer and sale must qualify for an exemption from registration. An issuer may register securities on its own behalf in a dominant offering, on behalf of its selling security holders in a secondary offering or the issuer may register shares in a dominant offering and on behalf of its selling security holders. All issuers qualify to register securities on Form S-1 including both private and public companies. Private companies who go public using direct public offerings often register securities on Form S-1.

Issuers who go public direct should be aware of the expansive disclosure required by Form S-1 prior to making the decision to go public including the financial statement requirements which include an audit by an auditor registered with the Public Company Accounting Oversight Board (“PCAOB”). Filing a Form S-1 registration statement can be a challenging and costly endeavor for a private company seeking to go public particularly for startups and smaller companies. Small issuers especially want to test the waters before filing with the SEC to determine if investors will have an interest in purchasing the securities offered by the Form S-1.

The Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) was designed to ease the burdens small companies confront when raising capital. The JOBS Act offers some relief for small companies seeking public company position if they qualify as an “emerging growth company. The new rule states that emerging growth companies may submit a registration statement for an underwritten or direct initial public offering to the Securities and Exchange Commission (“SEC”) on a secret basis prior to publicly filing the document. On April 5, 2012, the SEC announced the procedures for eligible issuers to make secret submissions of Securities Act registration statements to the SEC.

Until the SEC announces a formal course of action for secret electronic submissions for initial public offerings, issuers should submit their filings directly to the SEC either as an unbound paper submission or a text-searchable PDF file on a CD/DVD disk. The issuer must include a cover letter, that proves its position as an emerging growth company as defined by the JOBS Act. Foreign issuers that meet the definition of an emerging growth company under the JOBS Act should follow the same secret submission procedure as domestic issuers.

The cover letter and submission should be sent to:

Draft Registration Statement
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

The secret filing is not deemed to a public filing or a filing of a registration statement for purposes of the Securities Act of 1933, and as such, no registration fee is required at the time of filing. at the minimum 21 days prior to the commencement of a road show for the issuer’s initial public offering the documents filed with the secret submission must be made public.

For more information about the SEC registration statement requirements view our blog post at:

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