TheCorporateCounsel.net

Here’s something I shared on Monday on DealLawyers.com:

During the ABA Business Law Section’s “Dialogue with the Director” last Friday, Corp Fin Director Erik Gerding noted that Corp Fin staff has noticed a slight uptick in SPAC IPOs and shared some helpful thoughts on the disclosure review process now that the SPAC disclosure rules are effective. I’ve tried to paraphrase some of the key takeaways below (subject to the SEC’s standard disclaimer — and my own disclaimer that these are summaries based on my notes from Director Gerding’s oral comments):

– The SEC expects DRS submissions to be substantially complete when submitted. Nothing new; just a reminder.

– The filings complying with the new rules are lengthy, which may impact disclosure review timing. Plan accordingly.

– Some filers have elected to voluntarily comply with the new rules even if they don’t apply (for example, when the filing could be governed by the old rules because the filer had submitted filings prior to the effective date of the new rules on July 1). In that case, the Disclosure Review Program staff will treat the filing as if the new rules apply and comment accordingly.

– When dealing with a “SPAC on top” structure, Corp Fin staff may permit the de-SPAC filing to be submitted as a DRS by relying on the co-registrant’s DRS eligibility where the rules require a co-registrant. This is because the de-SPAC is the functional equivalent of the target’s IPO.

Director Gerding also acknowledged that technical EDGAR issues continue with respect to co-registrants, but Monday afternoon the SEC announced the adoption of updates to Volume II of the Filer Manual to reflect, among other things, that EDGAR will be updated to permit SPACs to identify target companies in a de-SPAC as co-registrants on Form DRS and DRS/A. It looks like EDGAR Release 24.3 was rolled out that day with the announcement.

At the same time, the SEC updated these FAQs on Voluntary Submission of Draft Registration Statements to revise old question 19 on de-SPACs & co-registrant status, which now reads:

(19) Question:

If a registrant uses the confidential submission process to submit a draft registration statement in connection with a de-SPAC transaction, when should it include any co-registrant’s CIK and related submission information in the EDGAR Filing Interface?

Answer:

In EDGAR Release 24.3, EDGAR was enhanced to allow co-registrants on draft registration statement submissions. See Section 7.2.1 Accessing the EDGARLink Online Submission of the EDGAR Filer Manual. The primary registrant must include the co-registrant’s CIK and related submission information in EDGAR when it submits the draft registration statement. See Section 7.3.3.1 Entering Submission Information of the EDGAR Filer Manual. The draft registration statement must also contain the information required by the applicable registration statement form, including required information about the target company. Co-registrants do not need to separately submit the draft registration statements or related correspondence in EDGAR.

– Meredith Ervine