Securities Lawyer 101 l Brenda Hamilton

Securities Lawyer 101 l Brenda Hamilton

Wednesday, June 5, 2013

IPO Filing and Prospectus Delivery Requirements

Under the Securities Act of 1933 as amended (the “Securites Act”),  a Company that conducts an initial public offering (“IPO”) including in a going public transaction must adequately disclose material information to investors. These disclosures include details of the Company’s business and financial condition as well as the securities the Company proposes to offer.
In going public transactions, these disclosures are most often provided in a Form S-1 Registration Statement.   Upon effectiveness of its S-1 registration statement, the Company provides potential investors with a prospectus which forms a part of the registration statement.  The prospectus contains two parts. Part I of the registration statement is the prospectus which requires that the company provide certain disclosures about its business operations, financial condition, and management. Part II contains information that doesn’t have to be delivered to investors. Financial statements included in a prospectus must be audited by a firm that is a member of the Public Company Accounting Oversight Board (“PCAOB”). SEC rules allow smaller reporting companies to provide less financial information than larger reporting issuers.
 
Preliminary Prospectus l Initial Public Offerings
The Company may provide a preliminary prospectus to potential investors before its registration is declared effective.   The preliminary prospectus contains substantially all of the information found in a final prospectus except pricing information.   A preliminary prospectus will include a price range instead of the final offering price of the security being offered.
 
Final Prospectus l Initial Public Offerings
In IPO’s, a final prospectus must be delivered to all investors with or before they purchase the security being offered. Final prospectus delivery obligations are satisfied when the Company files its final prospectus meeting the requirements of Section 10(a) of the Securities Act on the SEC’s Edgar system.
 
 

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