Registering an IPO on Form S-1, Part Three
Posted by Securities Attorney Laura Anthony | April 19, 2011 Tags: , , , , , , ,

The second half of the Form S-1 registration statement contains supplemental information and formal legal requirements. This section is compromised of the subject Company’s financial information, sales and issuances of unregistered securities, the legal information regarding the exemptions relied upon in making such sales and issuances. In addition, a list of exhibits and information regarding these items is included as well.

Regulation S-X and PCAOB Auditors

Regulation S-X sets forth the form, content and requirements as to the financial statements that must be reviewed and audited by a PCAOB licensed accounting firm.

Item 601 of Regulation S-K lists required exhibits that must be filed with a Form S-1 (for example, original articles of incorporation and all amendments thereto; material contracts; auditor consent letter; legal opinions, etc.). These exhibits must be filed with the S-1 to become available for public review.

“Plain English” Registration Statements

All registration statements must be written in “Plain English”, as opposed to technical legal or financial industry terminology. The Plain English rule requires that the registration statement be written using the following English grammatical principles: active voice; short sentences; definite, concrete, everyday words; tabular presentations of financial information and other applicable data; bullet lists for complex and material data, whenever possible; avoidance of legal jargon; avoidance of highly technical business terms; and no multiple negatives. The SEC enforces the plain English rule and will not hesitate to request that paragraphs or sections be re-written.

S-1 Filed with the SEC

Once the Form S-1 is filed with the SEC, using the EDGAR and XBRL requirements, the SEC will inform the Issuer if the S-1 will be reviewed. The SEC assigns a team of legal and accounting experts to review the document and provide comments to the Issuer.

In response, the Issuer prepares and files an amendment to the S-1, making the required changes and addressing the comments put forth by the SEC. The issuer then prepares and files a responsive letter which sets forth written direct answers to each of the SEC’s comments. The comment process can, at times, be arduous and repetitive; however, Issuers should note that this is all part of the S-1 process. When the comments are addressed to the satisfaction of the SEC, the commission will issue an order allowing the registration statement to go effective.

The Author

Attorney Laura Anthony,
Founding Partner, Legal & Compliance, LLC
Securities, Reverse Mergers, Corporate Transactions

Securities attorney Laura Anthony provides ongoing corporate counsel to small and mid-size public Companies as well as private Companies intending to go public on the Over the Counter Bulletin Board (OTCBB), now known as the OTCQB. For more than a decade Ms. Anthony has dedicated her securities law practice towards being “the big firm alternative.” Clients receive fast and efficient cutting-edge legal service without the inherent delays and unnecessary expense of “partner-heavy” securities law firms.

Ms. Anthony’s focus includes but is not limited to compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended, (“Exchange Act”) including Forms 10-Q, 10-K and 8-K and the proxy requirements of Section 14. In addition, Ms. Anthony prepares private placement memorandums, registration statements under both the Exchange Act and Securities Act of 1933, as amended (“Securities Act”). Moreover, Ms. Anthony represents both target and acquiring companies in reverse mergers and forward mergers, including preparation of deal documents such as Merger Agreements, Stock Purchase Agreements, Asset Purchase Agreements and Reorganization Agreements. Ms. Anthony prepares the necessary documentation and assists in completing the requirements of the Exchange Act, state law and FINRA for corporate changes such as name changes, reverse and forward splits and change of domicile.

Contact Legal & Compliance LLC for a free initial consultation or second opinion on an existing matter.

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