Chapter 1 — Introduction to Initial Public Offerings

1.3 Types of IPOs

An IPO represents a private company’s initial registration of debt or equity securities with the SEC. However, there are many ways in which a company can become public, including:

Sale of newly issued common shares to the public — The most common type of IPO is the registration and sale of common stock to the public by filing a registration statement on Form S-1 under the 1933 Act. This type of IPO will typically generate offering proceeds for the issuer and result in the registration and public trading of the issuer’s shares once the IPO is completed.
The exchange of debt securities previously issued in a private transaction for registered debt securities — Debt securities initially sold through a private placement offering (e.g., under Securities Act Rule 144A2) are subject to certain resale restrictions in accordance with the Securities Act. To facilitate greater liquidity, the securities issued in a private placement may include registration rights, which require the issuer to exchange the private securities for registered securities within a set period of time. This is often referred to as an “A/B” exchange offer, and the new securities are typically registered on Form S-4.
The registering of currently outstanding equity securities — In a manner similar to that in the scenario described above, registration may be a means of achieving liquidity for shares previously issued through private placements, such as Regulation A or D offerings. Under Section 12(b) of the Exchange Act, for a class of security to trade on a national securities exchange, it must be registered. Or, in contrast to a voluntary registration, an entity might otherwise be compelled to register outstanding shares under Section 12(g) of the Exchange Act, which contains certain size thresholds that trigger mandatory registration.3 In either circumstance, the class of securities is typically registered on Form 10.
The distribution of shares in a spin-off transaction by a public company — When a public company issues a subsidiary’s shares to its shareholders via a dividend, the subsidiary (or “spinnee”) becomes an independent entity. To facilitate the subsequent trading of the spinnee’s shares on a national securities exchange, a Form 10 may be used to register these shares.
The registering of securities that are issued by REITs, including “blind pool” offerings — A Form S-11 may be used to register shares in an SEC filing by REITs, whose business is acquiring or holding real estate for investment purposes. REITs may also file “blind pool” registration statements (typically also on a Form S-11) to sell securities to purchase real estate operations that are not identified.
The registering of securities that are issued by a SPAC — A Form S-1 may be used for the initial registration and sale of shares of a SPAC, a newly formed company that will use the proceeds from the IPO to acquire a private operating company (which generally has not been identified at the time of the IPO). To complete the acquisition of a private operating company, the SPAC may file a proxy statement on Schedule 14A or a combined proxy and registration statement on Form S-4 (see Section 1.7). Within four days of the closing of the acquisition of the private operating company, the SPAC must file a “super Form 8-K” that includes all of the information required in a Form 10 registration statement of the private operating company.

Other related transactions, including reverse mergers, put-together transactions, drop-down transactions, and split-offs, can similarly result in the registering of securities. When considering registering securities with the SEC for the first time, companies are encouraged to consult with their SEC legal counsel to determine the appropriate SEC form to use to register such securities. Regardless of the nature of the IPO transaction or the type of securities registered, upon effectiveness, the issuer will be “public” and will therefore be required to begin complying with the periodic reporting requirements of the Exchange Act (e.g., filing of Forms 10-K, 10-Q, and 8-K).

Footnotes

For a list of the titles of standards and other literature referred to in this publication, see Appendix D.

Registration of a class of security is generally required when (1) there are 2,000 or more record holders of an equity security (or, alternatively, 500 or more nonaccredited investors) and (2) a company has over $10 million in total assets.