Form S-1 Registration Statement Quiet Period – Going Public

Private companies going public should consider Form S-1 filing requirements when contemplating their securities offering.  The most commonly used registration statement form is Form S-1. 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.

The SEC and the federal securities laws do not define the term “quiet period,” which is also referred to as the “waiting period.” However, a quiet period extends from the time a company files a registration statement with the SEC until SEC staff declare the registration statement “effective.” During that period, the federal securities laws limit what information a company and related parties can release to the public. The failure to comply with these restrictions generally is referred to as “gun-jumping.”The quiet period rules that apply to Form S-1 registration statements are as follows:

• Well-known seasoned issuers are permitted to engage in oral and written communications, including use at any time of a new type of written communication called a “free writing prospectus,” subject to enumerated conditions (including, in some cases, filing with the Commission).
• All reporting issuers are, at any time, permitted to continue to publish regularly released factual business information and forward-looking information.
• Non-reporting issuers are, at any time, permitted to continue to publish factual business information that is regularly released and intended for use by persons other than in their capacity as investors or potential investors.
• Communications by issuers more than 30 days before filing a registration statement will be permitted so long as they do not reference a securities offering that is the subject of a registration statement.
• All issuers and other offering participants will be permitted to use a free writing prospectus after the filing of the registration statement, subject to enumerated conditions (including, in some cases, filing with the Commission). Offering participants, other than the issuer, will be liable for a free writing prospectus only if they use, refer to, or participate in the planning and use of the free writing prospectus by another offering participant who uses it. Issuers will have liability for any issuer information contained in any other offering participant’s free writing prospectus as well as any free writing prospectus they prepare, use, or refer to.
• The exclusions from the definition of prospectus are expanded to allow a broader category of routine communications regarding issuers, offerings, and procedural matters, such as communications about the schedule for an offering or about account-opening procedures.
• The exemptions for research reports are expanded.

Gun‐jumping could occur if issuer’s do not comply with the SEC’s strict requirements which would have a number of  negative consequences for a company and its offering on Form S-1 including (i) strict  liability for statements that were improper, (ii) an  SEC imposed “cooling off” period that could delay the  effectiveness of the registration statement on Form S-1, or (iii) possible violations of Section 5 of the Securities Act.

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, or [email protected].  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
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