In January 2016, the Securities and Exchange Commission (“SEC”) adopted interim final rules and forms to implement certain public offering provisions of the Fixing America’s Surface Transportation Act (“FAST Act”).1 The rules, which are now effective, (i) revise Forms S-1 and F-12 to permit an emerging growth company (“EGC”)3 issuer to omit financial information for certain historical periods and (ii) revise Form S-1 and Item 512(a) of Regulation S-K to permit smaller reporting companies (“SRCs”)4 to forward incorporate by reference their reports filed under the Securities Exchange Act of 1934 (“Exchange Act”).5
Pursuant to Section 71003 of the FAST Act, an IPO filer near its fiscal year-end may omit the audited financial statements of its previous year(s) and instead include only financial statements from the most recently completed fiscal year (plus reviewed financial statements for any interim period), provided that (a) the omitted information relates to a historical period that the issuer reasonably believes will not be required to be included in the Form S-1 or Form F-1 filing at the time of the contemplated offering and (b) the issuer amends the registration statement prior to distributing a preliminary prospectus to include all financial information required by Regulation S-X at the date of the amendment. This simplification of disclosure requirements can shorten the time necessary to complete the initial registration statement for an IPO and reduce registration costs for EGCs.
Pursuant to Section 84001 of the FAST Act, SRC issuers6 can avoid having to file either prospectus supplements or post-effective amendments to outstanding Forms S-1 when such issuers file Forms 10-K, 10-Q, and 8-K, likely resulting in reduced audit, legal, printing and delivery costs to issuers. As a result, SRCs should be able to move more quickly to raise capital when a “market window” is open. This provision may have its greatest beneficial impact on Form S-1 issuers making continuous offerings or offerings involving resales of securities that often require repeated informational updates.7
The SEC has requested comment on whether amendments discussed in this memorandum should be made available to a larger group of registrants, including issuers that are not SRCs, and for additional form types. Such comment period expires on February 18, 2016.