1.4 The IPO Registration Statement

The timeline above provides an overview of the IPO process from inception to closing for a typical 1933 Act registration statement. The IPO process typically begins with an organizational meeting, commonly referred to as an “all-hands” meeting, to plan the IPO process, establish a timeline, and coordinate responsibilities (see A in the timeline above). While the nature of the IPO may vary, before an entity may commence a public offering of securities, the entity, or “registrant,” must file a registration statement with the SEC under the applicable securities laws (see B in the timeline above). The registration statement contains extensive financial and business-related disclosures about the entity and the securities being offered. A registrant provides such disclosures in accordance with (1) Regulation S-X, which sets forth the SEC’s reporting requirements for the financial statements, and (2) Regulation S-K, which sets forth the SEC’s reporting requirements for information outside the financial statements. Common disclosures required in a typical IPO registration statement are summarized in Appendix A. Once submitted to or filed with the SEC, an IPO registration statement is processed and reviewed by the staff of the Division (see C in the timeline above). The purpose of the review is to determine whether the registration statement complies with the SEC’s disclosure requirements. The SEC does not evaluate the merits of securities offerings or reach a conclusion about whether they are “good” investments; rather, the Commission evaluates the appropriateness of the disclosure provided. A company can generally expect the staff to complete its initial review and furnish the first set of comments within 27 calendar days. The company would then respond to each of the SEC’s comments and reflect requested edits, as well as any other updates, in an amended IPO registration statement, which the SEC will also review. After the initial filing, the SEC’s review time can vary significantly but typically is within two weeks. A company can expect several rounds of comment letters with follow-up questions on responses to original comments as well as additional comments on new information included in the amended registration statement.

Historically, registration statements filed with the SEC were immediately accessible to the public via EDGAR, the SEC’s online public database. However, as discussed in Section 1.6, EGCs may confidentially submit certain IPO registration statements to the SEC. In 2017, the SEC extended a similar benefit to non-EGCs, allowing them to also voluntarily submit draft IPO registration statements to the SEC staff for nonpublic review. The ability to file nonpublicly is a significant benefit because it allows companies to keep potentially sensitive information from customers or competitors until later in the IPO process. It also lets companies, on a nonpublic basis, respond to SEC comments, update the draft registration statement, and continue to assess market conditions throughout the IPO process. Companies that use this benefit can also delay or withdraw the IPO, if desired, without public scrutiny.