June 18, 2012

EGCs: How Can You Tell If a Registration Statement Was Initially Confidentially Filed?

One member asked: “How can you tell if a EGC bothered with Corp Fin’s confidential submission process or just publicly filed its Form S-1 right away?” You can tell from the exhibit list. When a company that went through the confidential submission process makes its first filing, it has to file the confidential draft (or drafts) as Exhibit 99 to the registration statement. So for LegalZoom, they filed an “Exhibit 99.1 Confidential Draft #1” and no others – so it appears they stayed confidential for only one round of comments.

Check out this Reuter’s article entitled “IPO “whisper” estimates may be heard after Facebook.” Also see this Rolling Stone article entitled “JOBS Act Fallout: More Fraud, Fewer IPOs.”

Using Rule 135 to Announce a Confidential Submission

Rule 135 says that a very limited press release announcing a proposed public offering won’t be deemed an offer for Section 5 purposes. Way back at the end of April, SolarCity became the first company to announce in a Rule 135 notice that it is making a confidential submission at the time of its private submission to Corp Fin (FleetMatics also announced one). This is something that companies are not required to do – and that I believe no other company has done since…

Dave notes one interesting unintended consequence he has heard from bankers is that having companies go through confidential submission means their visibility into the “pipeline” is all screwed up – so they don’t have as good a feel for what is out there in the market going public, which could ultimately impact marketing and valuation.

Transcript: “LLCs: Understanding Capital Account and Allocation Concepts for M&A”

We have posted the transcript for our recent webcast: “LLCs: Understanding Capital Account and Allocation Concepts for M&A.”

– Broc Romanek