The SEC issued guidance on procedures for confidential submissions of draft registration statements under the JOBS Act on April 5, 2012, the same date on which the JOBS Act was enacted. On April 10, 2012, the SEC issued Frequently Asked Questions regarding Confidential Submission Process for Emerging Growth Companies providing additional guidance on issues related to the confidential submission of registration statements for review pursuant to the JOBS Act.
Section 106(a) of the JOBS Act, effective upon signing, provides that an EGC, “prior to its initial public offering date, may confidentially submit to the Commission a draft registration statement, for confidential non-public review by the staff, … provided that the initial confidential submission and all amendments thereto shall be publicly filed with the Commission not later than 21 days before the date on which the issuer conducts a road show1.”
What Constitutes the Initial Public Offering Date? Section 101(c) of the JOBS Act defines the term “initial public offering date” as the “date of the first sale of common equity securities of an issuer pursuant to an effective registration statement under the Securities Act of 1933.” The phrase “date of the first sale” covers not only the date of a company’s initial primary offering of common equity securities for cash, but also other offerings of common stock (for example, an offering of common equity pursuant to an employee benefit plan registered on a Form S-8 as well as a selling shareholder’s secondary offering registered on a resale registration statement). In addition, a company that has registered sales of securities other than common equity under the Securities Act can also qualify to use the confidential submission process as long as it otherwise qualifies as an EGC.
What Should Be Included in the Draft Registration Statement? A draft registration statement need not be signed or include the consent of auditors and other experts. In addition, as in publicly filed registration statements, an EGC may omit certain limited information from its initial submissions, such as the public offering price or other offering-related information. However, the SEC expects draft registration statements to be substantially complete at the time of initial submission, including a signed audit report of the registered public accounting firm covering the fiscal years presented in the registration statement and exhibits. The staff will defer review of any draft registration statement that is materially deficient when confidentially submitted.
When Should the Registration Fee Be Paid? The filing fee is due when the registration statement is first filed publicly on EDGAR, not with the submission of a confidential draft registration statement.
How to Calculate 21 Days Before the Road Show? In a traditional underwritten public offering, the road show would usually start when the EGC and underwriters begin actively marketing the offering. In that case, the company should estimate when it expects to begin the road show and publicly file its confidential submissions at least 21 days before that date. The SEC indicated that it would be helpful if the company kept the SEC staff informed about the company’s expected road show schedule.
If the company engages in test-the-waters communications2 before a registration statement is filed, the SEC will not object if an EGC does not treat such test-the-waters communications as a road show for purposes of calculating the 21 day period. If the EGC does not conduct a traditional road show and does not engage in activities that would come within the definition of road show, other than test-the-waters communications, then its registration statement and confidential submissions should be filed publicly on EDGAR no later than 21 days before the anticipated date of effectiveness of the registration statement. If the EGC does not conduct a traditional road show, but will have communications that would come within the definition of road show and do not meet the conditions for test-the-waters communications (for example, the company holds an investor meeting to market the offering that is not limited to QIBs or institutional accredited investors), then the registration statement would need to be filed at least 21 days before those communications.
How to File Information Previously Submitted Confidentially on EDGAR? For now, previously submitted confidential draft registration statements should be filed as exhibits to the first registration statement filed on EDGAR, with each confidential submission filed as a separate Exhibit 99. The first filed registration statement should be complete, including signatures, signed audit reports, consents, exhibits and filing fees.
Emerging Growth Company—Transition Issues. If an EGC is eligible to submit its registration statement on a confidential basis, the SEC will not object if a company that was in registration at the time of enactment of the JOBS Act switches to the confidential submission process for future amendments rather than withdrawing the registration statement and confidentially submitting a new draft registration statement for confidential review. A company should contact its review team to coordinate the process if it would like to make this switch.
Submissions by Foreign Private Issuers. Foreign private issuers eligible to submit draft registration statements as EGCs or eligible to follow the Division of Corporation Finance policy on Non-Public Submissions from Foreign Private Issuers must submit their draft registration statements in the same format and to the same address as EGCs (see Procedures for Confidential Submissions below). The e-mail address previously available for confidential registration statement submissions by foreign private issuers is no longer active. In December 2011, the Division revised its policy with respect to the non-public submission of initial registration statements by foreign private issuers by making such non-public submissions available only to a limited number of issuers.3 The JOBS Act has significantly expanded the ability of foreign private issuers to submit their initial registration statements on a confidential basis by extending this benefit to foreign private issuers that qualify as an EGC.
Procedures for Confidential Submissions. The SEC is in the process of implementing a system that provides for electronic transmission and receipt of confidential submissions. In the meantime, draft registration statements should be submitted in a text searchable PDF file on a CD/DVD. Alternatively, registration statements may be submitted in paper (not stapled or bound). The registration statement should be accompanied by a transmittal letter in which the company should confirm its EGC status. A copy of the confidential draft registration statement should be sent to:
Draft Registration Statement
U.S. Securities and Exchange SEC
100 F Street, N.E.
Washington, D.C. 20549
Questions about the draft registration statement submission and review process should be directed to (202) 551-5867. If a company submits a draft registration statement, the SEC will contact it to confirm receipt and advise the company of the office to which the registration statement is assigned for review.