TreatiseTreatise

Initial Public Offerings: A Practical Guide to Going Public
(2nd Edition)

 by David A Westenberg
 
 Copyright: 2012-2014
 Last Updated: October 2014

 Product Details >> 

Product Details

  • ISBN Number: 9781402418952
  • Page Count: 1552
  • Number of Volumes: 1
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Read the New York Law Journal Review of Initial Public Offerings

"There is a valuable new treatise, called “Initial Public Offerings: A Practical Guide to Going Public,” that is quickly becoming the bible of the I.P.O. market."
—"The Deal Professor" Steven M. Davidoff

Read the entire New York Times Dealbook article by "The Deal Professor" Steven M. Davidoff by clicking here.

The new second edition of Initial Public Offerings: A Practical Guide to Going Public provides battle-tested, real-world advice on how to create a winning IPO. Packed with best practices, planning tips, checklists and sample documents to help implement its guidance, Initial Public Offerings gives you the actionable insight you need to:

  • Understand market requirements and lay the groundwork for an IPO
  • Weigh an IPO’s advantages, drawbacks, demands and alternatives
  • Prepare for the rigors of due diligence
  • Master accounting matters vital to the IPO process
  • Take advantage of pre-IPO tax and financial planning opportunities
  • Put together a powerful IPO team
  • Consider a “dual track” strategy

Numerous developments — originating from the SEC, Congress, and the private sector — continue to change the IPO landscape.

Completely revised and substantially expanded, the second edition addresses key changes in legal requirements and market practices of critical interest to IPO companies, lawyers, and market professionals alike. Among other new and updated topics, the book covers the impact of the JOBS Act on private company fundraising, pre-IPO activities, Form S-1 disclosure requirements, and the IPO process; ongoing changes in corporate governance requirements and practices; and important developments in accounting preparation, SEC review, and underwriting practices. The new edition also includes updated market data, IPO forms, and planning tips to help ensure a smooth IPO in the post-Dodd-Frank, post-JOBS Act world.

Updated at least once a year and hailed by executives, entrepreneurs, general counsel, investment bankers and venture capitalists alike as the definitive IPO guide, Initial Public Offerings is an essential resource for anyone planning to go public. Here’s what market leaders are saying about this book:

“There is no better practical tool for anyone needing an in-depth, step-by-step guide to the IPO process. Anyone embarking on the IPO road will benefit from the book’s insights on dealing with the SEC, and from its practical advice on every business and corporate governance issue that must be addressed in taking an enterprise public.” 
 —Larry Sonsini, Wilson Sonsini Goodrich & Rosati

“If you need one book on the public offering process, this is it. This masterful work explains the financial, governance and legal realities of the IPO process from a perspective valuable to entrepreneurs, first-time issuers, young attorneys, and grizzled veterans alike.” 
 —Joseph A. Grundfest, William A. Franke Professor of Law and Business and Co-Director, Rock Center on Corporate Governance, Stanford Law School

“There’s nothing I like more than practical guidance. And this book sure fits the bill as a detailed step-by-step guide that every practitioner should have. A perfect starter’s kit.” 
 —Broc Romanek, Editor of TheCorporateCounsel.net

“This book provides a comprehensive, yet practical and usable guide, to the IPO process — and will be invaluable to the CEO, CFO, and board members of any company that is planning to go public.”
—Christopher T. Pasko, Senior Managing Director, Corporate and M&A Advisory Services, The Blackstone Group

“The essential IPO guide for venture capitalists and the companies they fund.” 
 —Jonathan A. Flint, Co-Founder and Managing General Partner, Polaris Ventures

“Both informative and entertaining, this book draws on a wealth of personal and institutional knowledge and experience to explain and demystify the IPO process. All participants in the process — even the hardiest veterans — will find something in this book that they didn’t know before they picked it up.” 
 —Keith F. Higgins, Ropes & Gray LLP

“An invaluable and comprehensive resource for the experienced practitioner and novice entrepreneur alike.”
—Richard D. Truesdell, Jr., Davis Polk & Wardwell LLP

  Foreword
  Preface
  Table of Contents
Chapter 1: An Introduction to the IPO Market
  • § 1:1 : Introduction1-2
  • § 1:2 : The Allure of IPOs1-2
    • § 1:2.1 : The Advantages of Going Public1-3
    • § 1:2.2 : The Disadvantages of Going Public1-4
    • § 1:2.3 : IPO Expenses and Proceeds1-5
  • Table 1-1 : Illustrative IPO Expenses and Net Proceeds1-6
  • § 1:3 : When Is the Time Right?1-7
    • § 1:3.1 : Is the Company Ready for the IPO Market?1-7
    • § 1:3.2 : Is the IPO Market Ready for the Company?1-8
  • § 1:4 : What Does It Really Take to Go Public?1-8
  • Table 1-2 : Profile of Successful IPO Candidates1-8
  • § 1:5 : A Brief History of the IPO Market1-9
  • Figure 1-3 : U.S. IPOs—1996 to 20131-13
  • Figure 1-4 : U.S. IPO Dollar Volume—1996 to 20131-14
  • Figure 1-5 : Median IPO Offering Size—1996 to 20131-14
  • Figure 1-6 : Median Annual Revenue of IPO Companies—1998 to 20131-15
  • Figure 1-7 : Percentage of Profitable IPO Companies—1998 to 20131-15
  • Figure 1-8 : Median Age of IPO Companies—1996 to 20131-15
  • § 1:6 : Going Public Today1-16
    • § 1:6.1 : Changes in the IPO Process1-16
      • [A] : More Extensive Preparation1-16
      • [B] : Additional Disclosure Requirements1-16
      • [C] : Accounting Changes1-17
      • [D] : Plain English1-17
      • [E] : Lengthier (but More Transparent) SEC Review1-17
      • [F] : Changes in Underwriting and Offering Practices1-17
      • [G] : New Exchanges and Offering Formats1-18
      • [H] : Longer Timeline1-18
      • [I] : Streamlined Filing and Pricing1-19
      • [J] : Heightened Scrutiny and Potential Liability1-19
      • [K] : Other Regulatory Changes1-19
      • [L] : The JOBS Act1-20
    • § 1:6.2 : Impact of Corporate Governance Reforms1-21
  • § 1:7 : Alternatives to an IPO1-22
    • § 1:7.1 : Remaining Private1-23
    • § 1:7.2 : Being Acquired1-23
    • § 1:7.3 : A Dual Track1-24
Chapter 2: The Elements of Success: Building a Startup Company for an Eventual IPO
  • § 2:1 : Introduction2-3
  • § 2:2 : Choice of Entity2-3
    • § 2:2.1 : Corporate Structure2-3
      • [A] : Advantages of Corporate Structure2-3
      • [B] : Alternative Structures2-4
      • [C] : Delaware Incorporation2-5
    • § 2:2.2 : Reorganizing2-6
  • § 2:3 : Rounding Out Senior Management2-6
    • § 2:3.1 : Chief Executive Officer2-7
    • § 2:3.2 : Chief Financial Officer2-7
    • § 2:3.3 : In-House Counsel2-8
    • § 2:3.4 : Board of Directors2-8
    • § 2:3.5 : Advisory Board2-8
    • § 2:3.6 : IPO Adjustments2-9
  • § 2:4 : Outside Team Members2-9
    • § 2:4.1 : Company Counsel2-9
    • § 2:4.2 : Intellectual Property and Other Special Counsel2-10
    • § 2:4.3 : Independent Accountants2-10
    • § 2:4.4 : IPO Advisors2-11
  • § 2:5 : Building the Employee Team2-11
    • § 2:5.1 : Employee Recruitment2-11
    • § 2:5.2 : Contractual Arrangements2-13
  • Table 2-1 : Essential Employee Agreements2-14
    • § 2:5.3 : Employment Regulation and Policies2-15
    • § 2:5.4 : Employment Terminations2-16
      • [A] : Importance of Planning2-17
      • [B] : Employer’s Obligations to a Terminated Employee2-18
    • § 2:5.5 : Minimizing Exposure to Employment Liability2-18
    • § 2:5.6 : Immigration Issues2-19
  • Table 2-2 : Seeking Talent Overseas2-21
    • § 2:5.7 : Use of Non-Employees (Consultants, Independent Contractors, and Interns)2-22
  • § 2:6 : Equity Incentives2-23
    • § 2:6.1 : Typical Pattern of Issuances2-23
      • [A] : Founder Shares2-23
      • [B] : Employee Equity Grants2-24
    • § 2:6.2 : Securities Law Compliance for Equity Grants2-25
      • [A] : Federal Exemptions2-25
      • [B] : State Exemptions2-26
      • [C] : Disclosure Requirements2-27
      • [D] : Avoiding Premature Public Reporting Obligations2-27
    • § 2:6.3 : Stock Incentive Plans2-30
      • [A] : Initial Stock Incentive Plan2-30
      • [B] : Public Company Stock Incentive Plan2-31
    • § 2:6.4 : Resales of Restricted Securities2-33
  • § 2:7 : Intellectual Property2-34
    • § 2:7.1 : Developing an IP Protection Program2-35
  • Table 2-3 : Basic Intellectual Property Protection for Startup Companies2-36
    • § 2:7.2 : Considerations by Type of Intellectual Property2-37
      • [A] : Patents2-37
      • [B] : Trade Secrets2-39
      • [C] : Trademarks2-40
      • [D] : Copyrights2-41
      • [E] : Domain Names2-42
      • [F] : Specialized Rights2-43
  • § 2:8 : Funding the Company’s Operations2-43
    • § 2:8.1 : Pre-IPO Financing Techniques2-43
      • [A] : Bootstrapping2-43
      • [B] : Crowdfunding2-44
      • [C] : Angel Financing2-45
      • [D] : Venture Capital2-45
      • [E] : Private Equity2-46
      • [F] : Growth Equity2-46
      • [G] : Strategic Investments2-46
      • [H] : Collaborations2-47
      • [I] : Venture Loans2-47
      • [J] : Bank Debt2-47
    • § 2:8.2 : Securities Law Compliance for Financing Transactions2-48
      • [A] : Section 4(a)(2)2-48
      • [B] : Regulation D2-49
        • [B][1] : Description and Requirements2-49
        • [B][2] : General Solicitation2-51
  • Table 2-4 : Definition of “Accredited Investor”2-54
    • [C] : Regulation S2-56
    • [D] : Regulation A2-56
      • [D][1] : Prior to Enactment of JOBS Act2-56
      • [D][2] : Changes Made by JOBS Act2-57
    • [E] : Crowdfunding2-59
    • § 2:8.3 : Integration Issues2-63
Chapter 3: Corporate Housekeeping
  • § 3:1 : Introduction3-3
  • § 3:2 : Timing, Purpose, and Process3-3
  • § 3:3 : Minute Books and Organizational Documents3-4
    • § 3:3.1 : Areas of Review3-4
      • [A] : Completeness of Minute Books3-4
      • [B] : Written Consent Issues3-4
      • [C] : Incumbency of Directors and Officers3-5
      • [D] : Board and Stockholder Approvals3-5
      • [E] : Corporate Charter and Bylaws3-6
      • [F] : Corporate Qualifications and Good Standing3-6
    • § 3:3.2 : Corrective Actions3-7
    • § 3:3.3 : Best Practices for Board Minutes3-7
  • § 3:4 : Stock, Option, and Warrant Records3-8
    • § 3:4.1 : Areas of Review3-9
      • [A] : Authorization of Issuances and Grants3-9
      • [B] : Equity Grants to Foreign Employees3-10
      • [C] : Unsatisfied Equity Commitments or Ownership Claims3-10
      • [D] : Section 83(b) Elections3-10
      • [E] : Stock Repurchases3-10
      • [F] : Preferred Stock Anti-Dilution Adjustments3-11
      • [G] : Stock Splits3-12
      • [H] : Stock Incentive Plan Issues3-12
    • § 3:4.2 : Corrective Actions3-13
  • § 3:5 : Contracts3-14
  • § 3:6 : Investor Rights3-15
    • § 3:6.1 : Areas of Review3-15
    • § 3:6.2 : Planning3-17
  • § 3:7 : Securities Law Compliance3-18
    • § 3:7.1 : Confirming the Availability of Exemptions from Registration3-18
    • § 3:7.2 : Corrective Measures3-20
  • § 3:8 : Financing Transactions3-21
    • § 3:8.1 : Generally3-21
    • § 3:8.2 : Areas of Review3-22
      • [A] : Authorization of Transactions3-22
      • [B] : Rights of First Refusal3-22
      • [C] : Anti-Dilution Adjustments3-22
      • [D] : Recap Financings3-23
      • [E] : Debt Financings3-23
      • [F] : Security Interests3-23
  • § 3:9 : M&A Transactions3-24
    • § 3:9.1 : Areas of Review3-24
      • [A] : Issuance of Shares and Assumption of Options3-24
      • [B] : Earnout Provisions3-24
      • [C] : Record Ownership of Assets3-24
      • [D] : Regulatory Compliance3-25
      • [E] : Disposition Issues3-25
      • [F] : Unresolved Matters3-25
      • [G] : Pending Transactions3-25
    • § 3:9.2 : Other Concerns3-25
  • § 3:10 : Intellectual Property Matters3-25
    • § 3:10.1 : Generally3-25
    • § 3:10.2 : Intellectual Property Audit3-26
      • [A] : Components of an IP Audit3-26
      • [B] : Benefits of an IP Audit3-28
  • § 3:11 : Human Resources Matters3-29
    • § 3:11.1 : Staffing3-29
    • § 3:11.2 : Management Arrangements3-29
    • § 3:11.3 : Employee Agreements3-29
    • § 3:11.4 : Equity Incentives3-29
    • § 3:11.5 : Employee Benefits3-30
    • § 3:11.6 : Compliance Review3-30
  • § 3:12 : Regulatory Compliance3-30
    • § 3:12.1 : Industry-Specific Regulation3-31
    • § 3:12.2 : Privacy and Data Security3-31
    • § 3:12.3 : Trade Compliance3-33
      • [A] : Anti-Corruption and Anti-Money Laundering3-33
      • [B] : Economic Sanctions3-34
      • [C] : Export Control3-35
      • [D] : Anti-Boycott3-36
    • § 3:12.4 : Government Contracts and Federal Funding3-37
  • § 3:13 : Accounting Matters3-38
  • § 3:14 : Related Person Transactions3-38
  • § 3:15 : Website Cleanup3-40
  • § 3:16 : Corporate and Capital Structure3-40
  • § 3:17 : Other Housekeeping Matters3-42
    • § 3:17.1 : Tax Matters3-42
    • § 3:17.2 : Legal Proceedings3-43
    • § 3:17.3 : Insurance3-43
    • § 3:17.4 : Additional Topics3-43
  • § 3:18 : Corporate Governance Preparation3-43
Chapter 4: Accounting Preparation
  • § 4:1 : Overview4-2
  • § 4:2 : The Importance of Accounting Preparation4-3
  • § 4:3 : Auditor Independence4-3
    • § 4:3.1 : Sarbanes-Oxley Act4-4
      • [A] : Prohibition of Most Non-Audit Services4-5
      • [B] : Pre-Approval of Services4-5
      • [C] : Rotation of Audit Firm Partners4-5
      • [D] : Reporting to Audit Committee on Critical Accounting Policies4-6
      • [E] : Restrictions on Company’s Employment of Former Audit Firm Personnel4-6
    • § 4:3.2 : SEC Rules4-6
      • [A] : Rules Pre-Dating Sarbanes-Oxley4-6
      • [B] : Rules Implementing Sarbanes-Oxley4-7
    • § 4:3.3 : PCAOB Rules4-9
    • § 4:3.4 : Independence Determinations4-10
  • § 4:4 : Financial Statement Requirements1-12
    • § 4:4.1 : Company Financial Statements1-12
      • [A] : Required Time Periods and Information1-12
        • [A][1] : Basic Requirements4-13
        • [A][2] : Emerging Growth Companies4-14
      • [B] : Accounting Standards4-16
        • [B][1] : Basic Requirements4-16
        • [B][2] : Emerging Growth Companies4-17
        • [B][3] : Convergence of U.S. GAAP and IFRS4-19
      • [C] : Audit Requirements4-19
        • [C][1] : Basic Requirements4-19
        • [C][2] : Emerging Growth Companies4-19
    • § 4:4.2 : Other Financial Statements4-21
      • [A] : Significant Acquisitions4-21
        • [A][1] : General Requirements4-21
  • Table 4-1 : Significance Tests for Acquisition Financials4-23
  • Table 4-2 : Periods for Which Acquisition Financials Are Required4-25
    • [A][2] : Exceptions4-27
    • [B] : Significant Dispositions4-27
    • [C] : Significant Equity Investments4-27
    • § 4:4.3 : Relief from Financial Statement Requirements4-29
    • § 4:4.4 : Mandatory Use of XBRL Interactive Data Format4-30
    • § 4:4.5 : GAAP Codification4-31
  • Table 4-3 : Examples of Codified GAAP References4-33
    • § 4:4.6 : Accounting Simplification4-34
  • § 4:5 : Acquisition Accounting4-34
    • § 4:5.1 : “Fair Value” Accounting for Acquisitions4-35
    • § 4:5.2 : Impact of Acquisition Accounting4-36
  • § 4:6 : Stock Option Issues4-37
    • § 4:6.1 : Option Expensing4-37
    • § 4:6.2 : Section 409A4-38
    • § 4:6.3 : Cheap Stock4-40
      • [A] : Common Stock Valuation4-41
      • [B] : Managing Cheap Stock Issues4-42
  • § 4:7 : Employee Stock Purchase Plans4-46
  • § 4:8 : Revenue Recognition4-47
  • § 4:9 : Restatements and Corrections of Accounting Errors4-49
    • § 4:9.1 : Evaluating Accounting Errors4-49
    • § 4:9.2 : Corrective Action4-53
    • § 4:9.3 : Company Analysis and Recommendation4-54
    • § 4:9.4 : Additional IPO Considerations4-55
    • § 4:9.5 : Prevalence and Consequences of Restatements4-56
  • § 4:10 : Accounting Treatment of Offering Expenses4-57
  • § 4:11 : Other Accounting Issues4-58
  • § 4:12 : Non-GAAP Financial Measures4-59
  • § 4:13 : Obtaining SEC Guidance4-61
  • § 4:14 : Attorney-Client Privilege and Auditor Communications4-63
Chapter 5: Corporate Governance; and Appendices 5A-5B
  • § 5:1 : Introduction5-3
  • § 5:2 : Sources of Governance Requirements and Practices5-4
    • § 5:2.1 : Primary Factors at the Time of the IPO5-4
      • [A] : Stock Exchange Rules5-4
        • [A][1] : General Requirements5-4
        • [A][2] : Exceptions5-4
      • [B] : SEC Rules5-5
      • [C] : Private Company Stockholders5-5
      • [D] : Managing Underwriters5-5
    • § 5:2.2 : Additional Factors Once the Company Is Public5-6
      • [A] : Public Company Stockholders5-6
      • [B] : Proxy Voting Advisory Services5-6
      • [C] : Governance Ratings5-6
      • [D] : Public Scrutiny5-7
    • § 5:2.3 : Best Practices5-7
  • § 5:3 : Director Independence5-8
    • § 5:3.1 : Stock Exchange Requirements5-8
  • Table 5-1 : Comparison of Nasdaq and NYSE IPO Phase-In Requirements5-10
    • § 5:3.2 : Other Independence Definitions5-12
      • [A] : Special Definitions Relating to Board Committees5-12
      • [B] : Company-Specific Definitions5-12
      • [C] : ISS’s Definition5-12
      • [D] : Other Definitions5-13
    • § 5:3.3 : Antitrust Law Restrictions5-13
  • § 5:4 : Board Committees5-14
    • § 5:4.1 : Audit Committee5-14
      • [A] : Composition—“Super Independence”5-15
      • [B] : Composition—Expertise5-16
      • [C] : Duties5-18
      • [D] : PCAOB Considerations5-20
        • [D][1] : Guidance About the PCAOB Inspection Process5-20
        • [D][2] : Auditors’ Communications with Audit Committees5-21
    • § 5:4.2 : Compensation Committee5-22
      • [A] : Composition—“Enhanced Independence”5-22
      • [B] : Composition—Other Considerations5-23
      • [C] : Duties5-24
    • § 5:4.3 : Nominating and Corporate Governance Committee5-27
      • [A] : Composition5-27
      • [B] : Duties5-27
    • § 5:4.4 : Other Committees5-28
      • [A] : Executive Committee5-28
      • [B] : Risk Committee5-29
      • [C] : Science or Technology Committee5-29
      • [D] : Finance Committee5-29
      • [E] : Strategy Committee5-29
  • § 5:5 : Board Size5-29
  • § 5:6 : Corporate Governance Guidelines5-30
    • § 5:6.1 : Stock Exchange Requirements5-30
    • § 5:6.2 : Key Provisions5-31
      • [A] : Executive Sessions of Independent Directors5-31
      • [B] : Board Leadership5-31
      • [C] : Stock Ownership Guidelines5-32
      • [D] : Director Tenure and Retirement5-32
      • [E] : Director Resignation Policies; Majority Voting5-33
      • [F] : Limitations on Service on Multiple Boards5-33
      • [G] : Director Evaluations5-34
      • [H] : Communications from Stockholders5-34
      • [I] : Diversity5-34
  • § 5:7 : Corporate Charter and Bylaws As a Public Company5-35
    • § 5:7.1 : Principal Purposes5-35
    • § 5:7.2 : Additional Topics5-36
      • [A] : Corporate Opportunity Provisions5-36
      • [B] : Exclusive Forum Provisions5-36
      • [C] : Fee-Shifting Provisions5-38
  • § 5:8 : Takeover Defenses5-39
    • § 5:8.1 : Deciding to Implement Takeover Defenses5-39
    • § 5:8.2 : Common Takeover Defenses5-40
      • [A] : Classified Boards5-40
      • [B] : Limitation of Stockholders’ Right to Remove Directors5-41
      • [C] : Limitation of Stockholders’ Right to Increase Board Size or Fill Vacancies5-41
      • [D] : Supermajority Voting Requirements5-41
      • [E] : Prohibition of Stockholders’ Right to Act by Written Consent5-42
      • [F] : Limitation of Stockholders’ Right to Call Special Meetings5-42
      • [G] : Advance Notice Requirements5-43
      • [H] : State Anti-Takeover Laws5-43
      • [I] : Blank Check Preferred Stock5-44
      • [J] : Stockholder Rights Plans5-45
      • [K] : Multi-Class Capital Structures5-46
    • § 5:8.3 : Take over Defenses in IPO Companies5-47
  • Table 5-2 : Prevalence of Takeover Defenses in U.S. IPO Companies and Established Public Companies, 2007–20135-49
  • Table 5-3 : Prevalence of Takeover Defenses Among Types of IPO Companies, 2007–20135-50
  • Table 5-4 : Trends in Takeover Defenses Adopted by U.S. IPO Companies, 2007–20135-51
  • Appendix 5A : Best Practices: When You Want to Do More Than Just Follow the RulesApp. 5A-1
  • Appendix 5B : Comparison of Nasdaq and NYSE Director Independence RequirementsApp. 5B-1
Chapter 6: Oversight, Controls, and Policies
  • § 6:1 : Introduction6-2
  • § 6:2 : Fiduciary Duties and the Duty of Oversight6-2
  • § 6:3 : Controls and Procedures6-4
    • § 6:3.1 : Internal Controls6-5
      • [A] : Section 13(b)(2) of the Exchange Act6-5
      • [B] : Sarbanes-Oxley Section 4046-5
    • § 6:3.2 : Disclosure Controls and Procedures6-8
  • § 6:4 : Policies6-9
    • § 6:4.1 : Disclosure Policy6-10
      • [A] : Disclosure Guidelines and Procedures6-10
      • [B] : Means of Public Disclosures6-11
      • [C] : Authorized Spokespersons6-11
      • [D] : “No Comment” Policy6-11
    • § 6:4.2 : Code of Business Conduct and Ethics6-12
  • Table 6-1 : General Guidelines for Implementing Effective Corporate Policies6-13
    • § 6:4.3 : Insider Trading Policy6-14
      • [A] : Key Elements6-15
      • [B] : Blackout Periods6-15
      • [C] : Other Policy Issues6-16
      • [D] : Market Practices6-18
  • Table 6-2 : Persons Subject to Regularly Scheduled Quarterly Blackout Periods6-18
  • Table 6-3 : Transactions Prohibited During Regularly Scheduled Quarterly Blackout Periods6-18
    • § 6:4.4 : Related Person Transaction Policy6-19
    • § 6:4.5 : Clawback Policy6-20
  • Table 6-4 : Comparison of Clawback Provisions Under Dodd-Frank Act and Sarbanes-Oxley Act6-21
    • § 6:4.6 : Equity Grant Policy6-22
    • § 6:4.7 : Investment Policy6-24
    • § 6:4.8 : Document Retention Policy6-24
    • § 6:4.9 : Regulatory Compliance Policies6-26
  • § 6:5 : Oversight Role of Company Counsel6-26
    • § 6:5.1 : Impact of SEC Professional Responsibility Rules6-27
    • § 6:5.2 : Reporting “Up the Ladder”6-27
    • § 6:5.3 : QLCC Alternative6-29
Chapter 7: Pre-IPO Acquisitions
  • § 7:1 : Introduction7-2
  • § 7:2 : Business Challenges7-3
    • § 7:2.1 : Generally7-3
    • § 7:2.2 : Challenges of Acquisitions Concurrent with an IPO7-3
      • [A] : Management Distraction7-3
      • [B] : Business Integration7-4
      • [C] : Structuring7-4
      • [D] : Financial Statements7-4
  • § 7:3 : Selected Legal Issues7-5
    • § 7:3.1 : Securities Law7-5
      • [A] : Exemptions from Registration7-5
      • [B] : Securities Law Integration7-6
      • [C] : Antifraud Rules7-6
      • [D] : Resale Restrictions7-7
      • [E] : Cash Earnout As a Security7-7
    • § 7:3.2 : Fiduciary Duties7-8
      • [A] : Deal Protection Provisions7-8
      • [B] : Fiduciary Exceptions Following Omnicare7-8
    • § 7:3.3 : Antitrust Law7-9
      • [A] : Hart-Scott-Rodino Act7-9
      • [B] : Foreign Antitrust Law7-11
      • [C] : Pre-Closing Activities7-12
  • Table 7-1 : Antitrust DOs and DON’Ts Between Signing and Closing7-12
    • [D] : Post-Closing Antitrust Challenges7-13
  • § 7:4 : Tax Considerations7-14
    • § 7:4.1 : Valuation Issues7-14
    • § 7:4.2 : “Golden Parachute” Rules7-14
    • § 7:4.3 : Limitations on Use of NOLs and Tax Credits7-16
  • § 7:5 : Accounting Matters7-17
    • § 7:5.1 : Financial Statement Requirements7-17
    • § 7:5.2 : Acquisition Accounting7-18
    • § 7:5.3 : Sarbanes-Oxley Section 4047-19
  • § 7:6 : Structural Issues in Acquisitions of Venture Capital–Backed Companies7-21
    • § 7:6.1 : Effect of Preferred Stock Rights7-21
      • § 7:6.2 : Indemnification and Escrow Arrangements7-22
    • § 7:6.3 : Treatment of Stock Options, Restricted Stock, and Warrants7-23
  • § 7:7 : Special Considerations in California M&A Deals7-25
    • § 7:7.1 : California Corporations Code’s Business Combination Provisions7-25
      • [A] : Section 1101—Equal Treatment Requirements7-25
      • [B] : Section 1201—Mandatory Class Votes7-26
      • [C] : Section 1203—Fairness Opinion in “Interested Party” Transaction7-26
      • [D] : Section 603—Potential Pre-Closing Notification of Shareholder Action by Written Consent7-26
      • [E] : Section 2115—“Quasi-California” Provisions7-27
    • § 7:7.2 : Deal Lockups7-28
    • § 7:7.3 : Fairness Hearings7-29
    • § 7:7.4 : Non-Competition Agreements7-30
    • § 7:7.5 : Stock Options7-31
    • § 7:7.6 : Jury Trial Waivers7-31
  • § 7:8 : IPO Implications of Concurrent M&A Activity7-32
    • § 7:8.1 : Disclosure of IPO Plans to Target7-32
    • § 7:8.2 : Form S-1 Disclosure Obligations7-32
    • § 7:8.3 : Due Diligence7-33
    • § 7:8.4 : Additional Stockholders7-33
    • § 7:8.5 : Registration Rights7-34
Chapter 8: Financial Planning for Executives of Pre-IPO Companies
  • § 8:1 : Introduction8-2
  • § 8:2 : Loans to Directors and Executive Officers8-3
    • § 8:2.1 : Prohibition on Personal Loans Under Sarbanes-Oxley Section 4028-3
    • § 8:2.2 : Resolving Outstanding Loans8-3
      • [A] : Repayment8-3
      • [B] : Forgiveness8-4
  • § 8:3 : Restricted Stock8-4
    • § 8:3.1 : Description8-4
    • § 8:3.2 : Federal Income Tax Treatment8-5
      • [A] : Section 83(b) Elections8-5
      • [B] : Tax Withholding8-6
      • [C] : Tax Strategies8-7
  • § 8:4 : Stock Options8-7
    • § 8:4.1 : Incentive Stock Options8-7
      • [A] : Requirements8-7
      • [B] : Federal Income Tax Treatment8-8
      • [C] : Tax Strategies8-9
  • Table 8-1 : ISOs: Exercise Now or Later?8-10
    • § 8:4.2 : Non-Statutory Stock Options8-11
      • [A] : Description8-11
      • [B] : Federal Income Tax Treatment8-11
      • [C] : Tax Strategies8-12
    • § 8:4.3 : Reverse-Vesting Stock Options8-12
  • Table 8-2 : NSOs: Exercise Now or Later?8-13
  • § 8:5 : Estate Planning8-13
    • § 8:5.1 : Taxation of Individuals and Assets8-14
      • [A] : Gift Tax8-14
      • [B] : Estate Tax8-14
      • [C] : GST Tax8-14
      • [D] : Income Tax8-15
    • § 8:5.2 : Basic Wealth Transfer Planning Techniques8-15
    • § 8:5.3 : Advanced Pre-IPO Techniques8-16
      • [A] : Irrevocable Trusts8-16
      • [B] : Grantor Retained Annuity Trusts8-17
  • Table 8-3 : Examples of Use of GRAT for Pre-IPO Stock8-18
    • § 8:5.4 : Valuation Issues8-19
    • § 8:5.5 : Transfer Restrictions and Securities Law Issues8-20
    • § 8:5.6 : Related Matters8-21
      • [A] : Will8-21
      • [B] : Healthcare Proxy8-21
      • [C] : Durable Power of Attorney8-22
      • [D] : Asset Protection Techniques8-22
    • § 8:5.7 : Role of Company Counsel8-22
  • § 8:6 : Section 409A8-22
    • § 8:6.1 : General Provisions8-23
    • § 8:6.2 : Application to Deferred Compensation Arrangements8-23
      • [A] : Salary or Bonus Deferrals8-23
      • [B] : Bonus Plans8-24
      • [C] : Severance Arrangements8-24
    • § 8:6.3 : Six-Month Delay for Key Employees of Public Companies8-25
  • § 8:7 : Rule 10b5-1 Trading Plans8-25
    • § 8:7.1 : Requirements8-26
    • § 8:7.2 : Benefits and Drawbacks8-27
  • Table 8-4 : Pros and Cons of Rule 10b5-1 Trading Plans8-27
  • § 8:8 : Antitrust Reporting Obligations8-28
    • § 8:8.1 : Application to Acquisitions of Voting Securities8-28
    • § 8:8.2 : Thresholds for HSR Reporting8-29
    • § 8:8.3 : Exemptions8-30
    • § 8:8.4 : Penalties and Corrective Filings8-31
Chapter 9: Assembling the IPO Team
  • § 9:1 : Introduction9-2
  • § 9:2 : Management and Employees9-3
    • § 9:2.1 : CEO and CFO9-3
    • § 9:2.2 : New Positions9-3
      • [A] : Controller9-3
      • [B] : Additional Finance and Accounting Staff9-3
      • [C] : General Counsel9-4
      • [D] : Investor Relations Personnel9-4
      • [E] : Stock Plan Administrator9-4
      • [F] : Internal Auditor9-5
      • [G] : Webmaster9-5
  • § 9:3 : Board of Directors9-6
    • § 9:3.1 : Board Composition9-6
    • § 9:3.2 : Compensation for Outside Directors9-7
  • § 9:4 : Company Counsel9-8
    • § 9:4.1 : Selection Criteria9-8
    • § 9:4.2 : Sample Questions/Requests for Company Counsel Candidates9-10
  • § 9:5 : Independent Accountants9-12
    • § 9:5.1 : Big 4 or Not?9-12
    • § 9:5.2 : Switching Auditors Prior to an IPO9-13
    • § 9:5.3 : Sample Questions/Requests for Independent Accountant Candidates9-13
  • § 9:6 : Managing Underwriters9-16
    • § 9:6.1 : Identifying Candidates9-17
    • § 9:6.2 : Bases for Evaluating Potential Managing Underwriters9-17
      • [A] : Track Record9-17
      • [B] : Team Members9-17
      • [C] : Commitment to the Company9-18
      • [D] : Distribution Reach and Mix9-19
      • [E] : Aftermarket Support9-19
      • [F] : Prestige and Reputation9-20
      • [G] : Client Satisfaction9-20
      • [H] : Economic Factors9-20
      • [I] : Financial Strength and Stability9-21
      • [J] : Other Capabilities9-21
    • § 9:6.3 : The Selection Process9-21
      • [A] : Selecting Managing Underwriters9-21
      • [B] : Designating Lead Managing Underwriters9-22
      • [C] : Selecting Co-Managers9-23
      • [D] : Being Evaluated by the Underwriters9-23
      • [E] : Confidentiality Agreements9-23
    • § 9:6.4 : Sample Questions/Requests for Managing Underwriter Candidates9-24
  • § 9:7 : Underwriters’ Counsel9-29
  • § 9:8 : Consultants and Advisors9-30
    • § 9:8.1 : Compensation Consultant9-30
    • § 9:8.2 : Investor Relations Firm9-30
    • § 9:8.3 : Road Show Consultant9-31
    • § 9:8.4 : Accounting Consultant9-31
    • § 9:8.5 : IPO Consultant9-31
  • § 9:9 : Outside Vendors9-32
    • § 9:9.1 : Financial Printer9-32
    • § 9:9.2 : Transfer Agent9-32
    • § 9:9.3 : Banknote Company9-33
    • § 9:9.4 : Virtual Data Room Provider9-33
    • § 9:9.5 : Electronic Road Show Host9-33
    • § 9:9.6 : Option Administrator9-33
  • § 9:10 : Changes in the IPO Team9-33
Chapter 10: An Overview of the IPO Process
  • § 10:1 : Introduction10-2
  • § 10:2 : Securities Law in a (Tiny) Nutshell10-3
  • § 10:3 : Roles of IPO Participants10-3
  • Figure 10-1 : Principal Relationships Among IPO Participants10-4
    • § 10:3.1 : Company Management10-5
    • § 10:3.2 : Board of Directors and Board Committees10-6
    • § 10:3.3 : Company Counsel10-7
    • § 10:3.4 : Independent Accountants10-8
    • § 10:3.5 : Pre-IPO Stockholders10-8
    • § 10:3.6 : Managing Underwriters10-9
    • § 10:3.7 : Research Analysts10-10
    • § 10:3.8 : Underwriters’ Counsel10-10
    • § 10:3.9 : Securities and Exchange Commission10-11
    • § 10:3.10 : Other Participants10-11
      • [A] : FINRA10-11
      • [B] : Financial Printer10-11
      • [C] : Stock Exchange10-12
      • [D] : Transfer Agent10-12
      • [E] : Banknote Company10-12
      • [F] : DTC10-13
      • [G] : CUSIP10-13
      • [H] : Virtual Data Room Provider10-13
      • [I] : Electronic Road Show Host10-13
      • [J] : Compensation Consultant10-13
      • [K] : Investor Relations Firm10-13
      • [L] : Road Show Consultant10-14
      • [M] : Accounting Consultant10-14
  • § 10:4 : Public Company Education10-14
    • § 10:4.1 : Informal and Formal “Schooling”10-15
    • § 10:4.2 : Common Approaches to the “Curriculum”10-15
      • [A] : Potential Liability10-15
      • [B] : Corporate Governance10-16
      • [C] : Sarbanes-Oxley Act; Dodd-Frank Act; JOBS Act10-16
        • [C][1] : Sarbanes-Oxley Act10-16
        • [C][2] : Dodd-Frank Act10-16
        • [C][3] : JOBS Act10-17
      • [D] : Periodic Reporting10-17
      • [E] : Public Communications10-18
      • [F] : Insider Trading and Reporting10-18
      • [G] : Section 16 Reporting10-18
      • [H] : Financial Planning for Executives10-18
      • [I] : Post-IPO Resales10-19
  • § 10:5 : Impact of the JOBS Act10-19
    • § 10:5.1 : Overview10-19
    • § 10:5.2 : “IPO On-Ramp”10-20
      • [A] : Definition of “Emerging Growth Company”10-20
      • [B] : IPO Relief10-21
      • [C] : Post-IPO Relief10-24
  • Table 10-2 : Emerging Growth Company Elections10-25
    • § 10:5.3 : Adoption of Emerging Growth Company Standards10-26
    • § 10:5.4 : General Solicitation in Rule 506 and Rule 144A Placements10-27
    • § 10:5.5 : Required SEC Studies10-28
      • § 10:5.5.A : Streamlining of Registration Process10-28
      • § 10:5.5.B : Decimalization10-29
    • § 10:5.6 : SEC Rulemaking and Market Practices10-30
    • § 10:5.7 : “JOBS Act 2.0”?10-30
  • § 10:6 : Sequence and Timing of Events in the IPO Process10-32
    • § 10:6.1 : Six to Twelve Months Before the Organizational Meeting10-33
    • § 10:6.2 : Three to Six Months Before the Organizational Meeting10-33
  • Figure 10-3 : Illustrative IPO Timetable10-34
    • § 10:6.3 : One to Three Months Before the Organizational Meeting10-35
    • § 10:6.4 : The Organizational Meeting10-36
    • § 10:6.5 : One to Two Months After the Organizational Meeting10-36
    • § 10:6.6 : One to Three Months After the Initial Form S-1 Filing/Confidential Submission10-37
    • § 10:6.7 : Three to Four Months After the Initial Form S-1 Filing/Confidential Submission10-37
  • Table 10-4 : Top Ten List10-39
Chapter 11: The Quiet Period and Other Publicity Issues
  • § 11:1 : Introduction11-2
  • § 11:2 : Legal Framework11-3
    • § 11:2.1 : Section 511-3
      • [A] : Pre-Filing Period11-4
      • [B] : Waiting Period11-4
      • [C] : Post-Offering Period11-5
    • § 11:2.2 : Permissible Communications11-5
      • [A] : Rule 163A—Communications More Than Thirty Days Before Public Filing11-5
      • [B] : Rule 169—Factual Business Communications11-6
      • [C] : Rule 135—Announcement of Intent to Conduct Public Offering11-8
      • [D] : Rule 134—Announcement of Proposed Public Offering After Filing Registration Statement11-8
      • [E] : Section 5(d)—“Test-the-Waters” Communications11-9
    • § 11:2.3 : Free Writing Prospectuses11-10
  • § 11:3 : SEC Enforcement11-10
    • § 11:3.1 : Monitoring for Violations11-10
    • § 11:3.2 : Remedies for Violations11-11
    • § 11:3.3 : Cautionary Tales About Pre-IPO Publicity11-11
    • Table 11-1 : Example of Rescission Risk Disclosure in Prospectus11-13
    • § 11:4 : Planning for the Quiet Period11-15
      • § 11:4.1 : Management Education11-15
      • § 11:4.2 : External Communications Policy11-15
      • § 11:4.3 : Legal Review11-16
      • § 11:4.4 : Adherence to Established Disclosure Practices11-16
      • § 11:4.5 : Coordination with Underwriters11-16
    • § 11:5 : Living with the Quiet Period11-17
      • § 11:5.1 : Public Disclosure of IPO Plans11-18
        • [A] : Pre-Filing Announcements11-18
        • [B] : Post-Filing Announcements11-19
      • § 11:5.2 : Announcement of IPO Plans to Employees11-19
      • § 11:5.3 : Communications with Customers, Suppliers, and Other Third Parties11-20
      • § 11:5.4 : Communications with Existing Investors11-21
      • § 11:5.5 : Press Releases11-21
      • § 11:5.6 : Media Coverage11-22
      • § 11:5.7 : Company Website11-23
      • § 11:5.8 : Blogging11-23
      • § 11:5.9 : Social Networking Websites11-24
      • § 11:5.10 : Industry Trade Shows11-25
      • § 11:5.11 : Scientific Conferences11-25
      • § 11:5.12 : User Conferences11-26
      • § 11:5.13 : Non-Deal Road Shows11-26
      • § 11:5.14 : “Test-the-Waters” Communications11-27
      • § 11:5.15 : Investor Conferences11-28
      • § 11:5.16 : Analysts11-30
      • § 11:5.17 : Awards11-30
      • § 11:5.18 : Directed Share Program11-31
      • § 11:5.19 : Employee Stock Purchase Plan11-31
      • § 11:5.20 : IPO Participation Rights11-32
      • § 11:5.21 : Distribution of the Form S-111-33
    • § 11:6 : Leaks11-33
      • § 11:6.1 : How Do Leaks Occur?11-33
      • § 11:6.2 : Responding to Leaks11-33
    • § 11:7 : Restrictions on Research Analyst Coverage11-34
      • § 11:7.1 : FINRA Restrictions11-35
      • § 11:7.2 : Securities Act Restrictions11-37
      • § 11:7.3 : Consequences of Research Quiet Periods11-37
Chapter 12: Potential Liability and the Purposes of Due Diligence
  • § 12:1 : Introduction12-2
  • § 12:2 : What Is Due Diligence?12-3
  • § 12:3 : Purposes of Due Diligence12-3
  • § 12:4 : Potential Liability12-4
    • § 12:4.1 : Section 1112-4
    • § 12:4.2 : Other Sources of Liability12-5
      • [A] : Section 1212-5
      • [B] : Rule 10b-512-6
      • [C] : Section 17(a)12-7
      • [D] : Controlling Person Liability12-7
      • [E] : SEC Enforcement Proceedings12-7
      • [F] : Blue Sky Laws12-8
    • § 12:4.3 : Additional Considerations in Assessing Liability12-8
      • [A] : Rule 15912-9
      • [B] : PSLRA12-9
      • [C] : Punitive Damages12-9
      • [D] : Liability for Plaintiff’s Attorney Fees12-9
      • [E] : Bankruptcy Discharge12-9
  • § 12:5 : The Due Diligence Defense12-9
    • § 12:5.1 : Due Diligence Defense Under Section 1112-10
    • § 12:5.2 : Similar Defenses Under Other Securities Law Provisions12-11
  • § 12:6 : The Company’s Perspective12-12
  • § 12:7 : Directors and Officers12-13
    • § 12:7.1 : Duties and Responsibilities12-13
    • § 12:7.2 : Establishing the Due Diligence Defense12-13
      • [A] : Escott v. BarChris Construction Corp.12-13
      • [B] : Steps Commonly Taken to Establish a Due Diligence Defense12-15
    • § 12:7.3 : Indemnification and Exculpation Arrangements12-16
      • [A] : Corporate Charter and Bylaws12-16
  • Table 12-1 : Establishing a Due Diligence Defense12-16
    • [B] : Indemnification Agreements12-17
    • [C] : Expense Advancement Provisions12-17
    • [D] : Exculpation Provisions12-18
    • [E] : SEC’s Position on Indemnification12-18
    • § 12:7.4 : D&O Insurance12-19
      • [A] : The ABCs of D&O Insurance12-19
      • [B] : Procuring D&O Insurance12-21
    • § 12:7.5 : Putting the Risk of Personal Liability in Perspective12-22
  • § 12:8 : Selling Stockholders12-24
  • § 12:9 : Underwriters12-25
    • § 12:9.1 : Motivations for Diligence12-25
    • § 12:9.2 : Diligence Standards12-27
      • [A] : Regulatory Guidance12-27
      • [B] : Case Law12-28
    • § 12:9.3 : Indemnification of Underwriters12-29
  • § 12:10 : Due Diligence in an IPO12-31
    • § 12:10.1 : Overview12-31
    • § 12:10.2 : The Due Diligence Process12-32
      • [A] : Management Integrity12-32
      • [B] : Retention of Professionals12-32
      • [C] : Information Requests12-33
      • [D] : Diligence Sessions12-33
      • [E] : Independent Verification12-34
      • [F] : Follow-Up12-34
      • [G] : Drafting Coordination12-34
      • [H] : Updating and Bring-Down12-35
      • [I] : Comfort Letters12-35
      • [J] : Legal Opinions12-37
      • [K] : Documentation12-38
    • § 12:10.3 : Company Cooperation and Assistance12-38
Chapter 13: Preparing the Form S-1
  • § 13:1 : Introduction13-2
  • § 13:2 : Contents of the Form S-113-3
    • § 13:2.1 : Prospectus13-3
  • Table 13-1 : Illustrative Emerging Growth Company Comments13-4
    • [A] : Front Cover13-5
    • [B] : Prospectus Summary13-6
    • [C] : Risk Factors13-7
    • [D] : Special Note Regarding Forward-Looking Statements13-8
    • [E] : Use of Proceeds13-8
    • [F] : Dividend Policy13-9
    • [G] : Capitalization13-9
    • [H] : Dilution13-10
    • [I] : Selected Financial Data13-10
    • [J] : MD&A13-11
    • [K] : Business13-13
  • Table 13-2 : Business Section for Technology Company13-14
  • Table 13-3 : Business Section for Life Sciences Company13-14
    • [L] : Management13-16
  • Table 13-4 : Am I an Officer?13-19
    • [M] : Executive Compensation13-21
    • [N] : Related Person Transactions13-24
    • [O] : Principal and Selling Stockholders13-25
  • Table 13-5 : What Will Be Disclosed About Me?13-26
    • [P] : Description of Capital Stock13-27
    • [Q] : Shares Eligible for Future Sale13-28
    • [R] : Material U.S. Tax Considerations for Non-U.S. Holders of Common Stock13-29
    • [S] : Underwriting13-28
    • [T] : Legal Matters13-29
    • [U] : Experts13-30
    • [V] : Where You Can Find More Information13-30
    • [W] : Financial Statements and Notes13-30
    • [X] : Other Sections13-32
    • [Y] : Back Cover13-32
    • [Z] : Emerging Prospectus Practices13-32
    • § 13:2.2 : Length of the Prospectus13-33
  • Table 13-6 : Typical Prospectus Length13-34
    • § 13:2.3 : Cover and Part II of Form S-113-35
    • § 13:2.4 : Material Contracts13-36
      • [A] : Filing Requirements13-36
      • [B] : Confidential Treatment Requests13-37
      • [C] : Representations and Warranties Contained in Exhibits13-39
    • § 13:2.5 : Other Exhibits13-41
    • § 13:2.6 : Signature Requirements13-41
      • [A] : Required Signatures13-41
      • [B] : Powers of Attorney13-41
  • § 13:3 : Plain English13-42
    • § 13:3.1 : Overview13-42
    • § 13:3.2 : Practical Application13-42
    • § 13:3.3 : Words to Avoid13-43
  • Table 13-7 : Words to Avoid13-43
  • § 13:4 : The Organizational Meeting13-44
  • § 13:5 : The Form S-1 Drafting Process13-45
    • § 13:5.1 : The Role of Company Counsel13-46
    • § 13:5.2 : Getting Ready to Draft13-46
    • § 13:5.3 : Staging the Drafting13-47
      • [A] : Business13-47
      • [B] : MD&A and Other Financial Disclosures13-47
      • [C] : Management and Executive Compensation Disclosures13-48
      • [D] : Risk Factors13-49
      • [E] : Exhibits13-50
      • [F] : Balance of Form S-113-50
      • [G] : Pacing Items13-51
    • § 13:5.4 : Drafting Sessions13-51
    • § 13:5.5 : Board and Committee Involvement13-53
    • § 13:5.6 : Document Form and Control13-54
    • § 13:5.7 : Drafting: What Does Not Work13-55
    • § 13:5.8 : A Summary of Drafting Roles13-56
  • Table 13-8 : Traditional Drafting Roles: Which One Will You Be?13-57
Chapter 14: Selling Stockholders
  • § 14:1 : Introduction14-2
  • § 14:2 : Background14-2
    • § 14:2.1 : Registration Rights14-2
    • § 14:2.2 : Nature and Prevalence of Selling Stockholders14-3
  • Table 14-1 : Prevalence of Selling Stockholders14-5
  • § 14:3 : Advantages and Disadvantages14-6
    • § 14:3.1 : The Company’s Perspective14-6
    • § 14:3.2 : The Selling Stockholders’ Perspective14-6
      • [A] : Loss of Upside14-6
      • [B] : Potential Liability14-7
      • [C] : Uncertain Terms14-8
      • [D] : Section 16 Risk14-8
      • [E] : Higher Sales Commission14-9
      • [F] : Other Expenses14-9
  • § 14:4 : Process and Documentation14-9
    • § 14:4.1 : Waivers and Amendments14-9
    • § 14:4.2 : Registration Rights Notice14-10
    • § 14:4.3 : Selling Stockholder Documents14-11
      • [A] : Questionnaires14-11
      • [B] : Power of Attorney14-11
      • [C] : Custody Agreement14-12
      • [D] : Stock Power and Medallion Guarantee14-12
      • [E] : IRS Form W-914-13
  • § 14:5 : Deal Complications14-13
    • § 14:5.1 : Disclosure14-13
    • § 14:5.2 : Pricing14-14
    • § 14:5.3 : Cashless Exercises14-15
    • § 14:5.4 : Logistics14-15
    • § 14:5.5 : Foreign Selling Stockholders14-15
Chapter 15: Stock Exchange Listing; and Appendix 15A
  • § 15:1 : Introduction15-2
  • § 15:2 : Listing Choices15-2
    • § 15:2.1 : Background15-2
    • § 15:2.2 : The Hegemony of Nasdaq and the NYSE15-3
      • [A] : Nasdaq15-4
      • [B] : New York Stock Exchange15-5
  • § 15:3 : Selecting an Exchange15-5
    • § 15:3.1 : Selection Criteria15-5
      • [A] : Listing Standards15-6
      • [B] : Cost15-6
      • [C] : Prestige15-7
      • [D] : Image15-7
      • [E] : Volatility, Liquidity, and Trading Execution15-7
      • [F] : Competitor Listings15-7
      • [G] : Insider Sales15-7
    • § 15:3.2 : Current Picture15-8
  • § 15:4 : Listing Requirements15-9
    • § 15:4.1 : Quantitative Listing Standards15-9
    • § 15:4.2 : Corporate Governance Standards15-10
  • § 15:5 : Listing Process and Documentation15-11
    • § 15:5.1 : Overview15-11
    • § 15:5.2 : Phases of the Listing Process15-12
      • [A] : Eligibility Review15-12
      • [B] : Initial Application and Supporting Materials15-12
      • [C] : Review of Application15-13
      • [D] : Selection of Market Makers15-14
      • [E] : Listing Approval15-14
      • [F] : Final Documentation15-14
      • [G] : Opening Day15-15
  • § 15:6 : Related Matters15-15
    • § 15:6.1 : Trading Symbol15-15
    • § 15:6.2 : Transfer Agent15-16
    • § 15:6.3 : DTC Eligibility15-17
    • § 15:6.4 : DRS Eligibility15-17
    • § 15:6.5 : CUSIP Number15-17
    • § 15:6.6 : Exchange Act Registration15-18
  • § 15:7 : Voluntary and Involuntary Delisting15-18
  • Appendix 15A : Summary of Stock Exchange Listing Requirements and FeesApp. 15A-1
Chapter 16: Initial Filing or Confidential Submission of the Form S-1
  • § 16:1 : Introduction16-2
  • § 16:2 : “At the Printer”16-2
  • § 16:3 : EDGAR Filer Codes16-3
  • § 16:4 : SEC Registration Fee16-6
  • § 16:5 : Filing the Form S-116-7
    • § 16:5.1 : Formatting16-8
    • § 16:5.2 : Final Pre-Filing Review16-9
    • § 16:5.3 : EDGAR Transmission16-9
    • § 16:5.4 : Confidential Submission16-10
      • [A] : Overview16-10
      • [B] : Eligibility16-11
      • [C] : Advantages and Disadvantages16-11
      • [D] : Accounting Standards Election16-12
      • [E] : Submission Mechanics16-13
      • [F] : Confidential Treatment Requests16-13
  • Table 16-1 : Comparison of Confidential Submission and Public Filing of Form S-116-14
  • § 16:6 : Required Consents16-15
    • § 16:6.1 : Auditors16-15
      • [A] : Initial Form S-1 Filing16-15
      • [B] : Form S-1 Amendments16-15
      • [C] : Prospectuses16-16
      • [D] : Dating of Auditor Consents16-16
    • § 16:6.2 : Counsel16-16
    • § 16:6.3 : Other Experts16-17
    • § 16:6.4 : Director Nominees16-17
    • § 16:6.5 : Customers16-18
    • § 16:6.6 : Industry Analysts16-18
  • § 16:7 : Confidential Treatment Request16-19
  • § 16:8 : Related Filings16-20
    • § 16:8.1 : FINRA Filing16-20
    • § 16:8.2 : Stock Exchange Listing16-21
    • § 16:8.3 : CUSIP Number16-21
    • § 16:8.4 : Exchange Act Registration16-21
    • § 16:8.5 : Blue Sky Filings16-21
  • § 16:9 : Evolution of EDGAR System16-22
  • § 16:10 : Board and Committee Approvals16-22
    • § 16:10.1 : Items for Board Approval16-22
      • [A] : Governance Matters16-23
      • [B] : IPO Matters16-23
      • [C] : Other IPO Preparation Matters16-24
      • [D] : Public Company Matters16-25
    • § 16:10.2 : Role of Committees16-25
    • § 16:10.3 : Sequencing and Other Considerations16-26
  • § 16:11 : Stockholder Approvals16-27
    • § 16:11.1 : Generally16-27
    • § 16:11.2 : Delaware Considerations16-28
  • § 16:12 : Immediate Next Steps16-29
    • § 16:12.1 : Press Release16-29
    • § 16:12.2 : Employee Announcement16-29
Chapter 17: The SEC Review Process
  • § 17:1 : Introduction17-1
  • § 17:2 : SEC Overview17-2
    • § 17:2.1 : SEC Structure, Functions, and Players17-2
    • § 17:2.2 : Corp Fin17-3
  • § 17:3 : The Review Process17-5
    • § 17:3.1 : Overview17-5
      • [A] : Generally17-5
      • [B] : Review of Confidential Submissions17-6
    • § 17:3.2 : Standard of Review17-7
  • Table 17-1 : Mustang Ranch: Too Much Disclosure?17-8
    • § 17:3.3 : Initial Comments17-8
    • § 17:3.4 : The Company’s Initial Response17-11
    • § 17:3.5 : Subsequent Comments and Responses17-14
    • § 17:3.6 : “Appeals” and Waivers During the Review Process17-15
    • § 17:3.7 : Timing and Comment Data17-19
  • Table 17-2 : Elapsed Time Between Form S-1 Filings (or Confidential Submissions) and SEC Comment Letters, 2010–201317-20
  • Table 17-3 : Distribution of SEC Comments, 2007–201317-21
  • § 17:4 : Tips for a Smooth Review Process17-21
    • § 17:4.1 : Working with the Staff17-21
    • § 17:4.2 : Managing the Timeline17-22
  • Table 17-4 : Tips for a Good Relationship with SEC Examiners17-23
  • § 17:5 : What SEC Review Does and Does Not Mean17-23
  • § 17:6 : Confidentiality Issues17-24
    • § 17:6.1 : Public Release of Comment Letters and Responses17-25
    • § 17:6.2 : Confidential Treatment Requests Under Rule 8317-27
    • § 17:6.3 : Return of Supplemental Materials Under Rule 418(b)17-32
Chapter 18: Marketing the Offering
  • § 18:1 : Introduction18-2
  • § 18:2 : Preliminary Prospectus18-3
    • § 18:2.1 : Printing and Distribution18-3
    • § 18:2.2 : Determining Price Range and Number of Shares18-4
    • § 18:2.3 : Flash Results18-6
  • § 18:3 : Free Writing Prospectuses18-10
    • § 18:3.1 : Requirements18-10
    • § 18:3.2 : Use of Free Writing Prospectuses18-13
  • Table 18-1 : Illustrative Timeline for Use of Post-Effective Free Writing Prospectus to Convey Updated Offering Information18-14
  • Table 18-2 : Illustrative Timeline for Use of Pre-Effective Free Writing Prospectus to Convey Material Company Developments18-15
  • § 18:4 : Road Show18-16
    • § 18:4.1 : Overview18-16
    • § 18:4.2 : Requirements18-17
    • § 18:4.3 : Management Preparation18-17
    • § 18:4.4 : The Launch18-19
    • § 18:4.5 : Schedule18-20
  • Table 18-3 : Illustrative Road Show Schedule18-21
  • § 18:5 : Electronic Road Show18-21
    • § 18:5.1 : Overview18-21
    • § 18:5.2 : Requirements18-22
  • § 18:6 : Rules of the Road18-23
    • § 18:6.1 : Legal Review18-24
    • § 18:6.2 : Availability of Documents18-24
    • § 18:6.3 : Consistency with Preliminary Prospectus18-24
    • § 18:6.4 : Q&A Sessions and Other Investor Follow-Up18-25
    • § 18:6.5 : Attendance18-25
    • § 18:6.6 : Forward-Looking Statements18-26
    • § 18:6.7 : Presentation Slides18-26
    • § 18:6.8 : Potential Liability18-26
  • § 18:7 : Impermissible Offering Communications18-27
  • § 18:8 : Pre-Marketing Activities18-28
    • § 18:8.1 : “Test-the-Waters” Communications18-28
    • § 18:8.2 : Preliminary Road Shows18-30
  • § 18:9 : Unconventional Marketing Techniques18-31
    • § 18:9.1 : Underwritten IPOs18-31
  • Table 18-4 : Underwritten IPOs with Unusual Marketing Twists18-32
    • § 18:9.2 : Direct IPOs18-33
  • § 18:10 : Directed Share Programs18-35
    • § 18:10.1 : Overview18-35
    • § 18:10.2 : Potential Risks18-35
    • § 18:10.3 : Minimizing the Risks18-36
  • § 18:11 : Insider Purchases in IPO18-37
    • § 18:11.1 : Regulation M18-38
    • § 18:11.2 : Disclosure Requirements18-38
    • § 18:11.3 : FINRA Restrictions18-39
    • § 18:11.4 : Underwriter Loans18-40
    • § 18:11.5 : Other Considerations18-40
  • § 18:12 : Lockup Agreements18-41
    • § 18:12.1 : Purpose18-41
    • § 18:12.2 : Parties18-42
    • § 18:12.3 : Timing18-43
    • § 18:12.4 : Duration and Exceptions18-43
    • § 18:12.5 : Releases18-44
Chapter 19: Demystifying the Underwriting Process
  • § 19:1 : Introduction19-2
  • § 19:2 : Underwriting Basics19-3
    • § 19:2.1 : The Players19-3
      • [A] : Principal Players19-3
      • [B] : Key Personnel19-4
    • § 19:2.2 : Basic Structure19-5
      • [A] : Overview19-5
      • [B] : Share Distribution and Purchase Price Discounts19-5
  • Table 19-1 : Different Purchase Prices in the Distribution Chain19-6
    • [C] : Evolving Industry Practices19-6
    • [D] : Underwriting Discounts19-7
  • Table 19-2 : Median Underwriting Discount by Offering Size, 2007–201319-8
    • § 19:2.3 : Contractual Arrangements19-8
      • [A] : Overview19-8
      • [B] : Agreement Among Underwriters19-9
      • [C] : Selected Dealers Agreement19-10
  • § 19:3 : Distribution and Bookbuilding Process19-10
    • § 19:3.1 : Forming the Underwriting Syndicate19-10
    • § 19:3.2 : Preparing the Sales Forces19-11
    • § 19:3.3 : Building the Book19-12
  • Table 19-3 : Example of Bookbuilding19-14
    • § 19:3.4 : Confirming Sales; Aftermarket Price Stabilization19-15
    • § 19:3.5 : Share Allocations19-17
  • § 19:4 : Underwriting Agreement19-19
    • § 19:4.1 : Purchase and Sale of the Shares19-20
    • § 19:4.2 : Representations and Warranties19-21
      • [A] : Purposes19-21
      • [B] : Company Representations19-22
      • [C] : Selling Stockholder Representations19-24
      • [D] : Underwriter Representations19-25
    • § 19:4.3 : Closing Arrangements19-25
    • § 19:4.4 : Default Provisions19-27
    • § 19:4.5 : Company Covenants19-27
    • § 19:4.6 : Payment of Offering Expenses19-29
    • § 19:4.7 : Disclaimer of Fiduciary or Advisory Relationship19-30
    • § 19:4.8 : Indemnification and Contribution Arrangements19-31
      • [A] : Indemnification Obligations of the Company19-31
      • [B] : Indemnification Obligations of Selling Stockholders19-32
      • [C] : Indemnification Obligations of the Underwriters19-33
      • [D] : Enforcing Indemnification and Contribution Obligations19-33
    • § 19:4.9 : Miscellaneous Provisions19-35
  • § 19:5 : Economics of Underwriting19-35
    • § 19:5.1 : Allocating Underwriting Compensation19-35
  • Table 19-4 : Illustrative Breakdown of Underwriting Discount19-37
    • § 19:5.2 : Profitability19-38
  • § 19:6 : FINRA Review of Underwriting Arrangements19-38
    • § 19:6.1 : Corporate Financing Rule19-40
    • § 19:6.2 : Prohibited Arrangements19-41
    • § 19:6.3 : Mandatory Underwriter Lockup19-42
    • § 19:6.4 : Conflicts of Interest19-43
  • § 19:7 : Research Analysts19-44
    • § 19:7.1 : Separation of Research Analyst and Investment Banking Functions19-46
      • [A] : Research Reports19-47
      • [B] : Compensation of Analysts19-47
      • [C] : Solicitation of Investment Banking Business19-47
      • [D] : Analyst Participation in Offering Process19-48
      • [E] : Research Quiet Periods19-48
      • [F] : Restrictions on Personal Trading19-49
      • [G] : Expanded Disclosures19-49
    • § 19:7.2 : Implications for IPOs19-49
      • [A] : Relationships with Analysts19-50
      • [B] : Due Diligence19-50
      • [C] : Timing of Managing Underwriter Selections19-50
      • [D] : Analyst Participation in IPO Process19-51
      • [E] : Timing of Research Reports19-51
      • [F] : IPO Scheduling19-52
      • [G] : Relationships with Investment Bankers19-52
      • [H] : Avoiding Violations19-52
Chapter 20: Effectiveness, Pricing, Trading, and Closing; and Appendices 20A-20C
  • § 20:1 : Introduction20-2
  • § 20:2 : Overview20-3
  • § 20:3 : Effectiveness of the Form S-120-4
    • § 20:3.1 : Timing of Effectiveness20-4
    • § 20:3.2 : Acceleration Requests20-5
      • [A] : Acceleration Request Requirements20-5
      • [B] : SEC Consideration of Acceleration Requests20-6
    • § 20:3.3 : Avoiding Premature Effectiveness20-8
  • § 20:4 : Form 3 Filings20-9
    • § 20:4.1 : Who Is Required to File20-9
    • § 20:4.2 : Filing Considerations20-10
  • § 20:5 : Pricing20-10
  • § 20:6 : Conveying Updated Information Prior to Time of Sale20-12
  • § 20:7 : Pricing Outside the Range or Changing the Offering Size20-14
    • § 20:7.1 : Overview20-14
    • § 20:7.2 : Pricing Below the Range or Reducing the Offering Size20-18
    • § 20:7.3 : Pricing Above the Range or Increasing the Offering Size20-20
    • § 20:7.4 : Pre-Effective Amendments to Reflect Offering Changes20-23
    • § 20:7.5 : Post-Effective Amendments to Reflect Offering Changes20-24
    • § 20:7.6 : Preparing for Offering Changes20-24
  • § 20:8 : Final Prospectus20-25
    • § 20:8.1 : Adding Price-Dependent Information to Final Prospectus20-25
    • § 20:8.2 : Final Prospectus Filing and Delivery Requirements20-26
  • § 20:9 : Trading20-27
    • § 20:9.1 : First-Day Trading20-27
    • § 20:9.2 : Stock Performance Expectations and Results20-28
    • § 20:9.3 : Insider Purchases in the Aftermarket20-29
  • § 20:10 : Closing20-30
    • § 20:10.1 : IPO Settlement Cycle20-30
    • § 20:10.2 : Closing Actions20-30
      • [A] : Typical Closing Deliveries20-31
      • [B] : Exercising the Over-Allotment Option20-32
      • [C] : Other Closing Matters20-32
  • § 20:11 : Related Matters20-33
    • § 20:11.1 : Transfer Agent Arrangements20-33
    • § 20:11.2 : Press Releases20-33
    • § 20:11.3 : Form 4 Filings20-34
    • § 20:11.4 : Section 13 Filings20-34
    • § 20:11.5 : Investor Relations Section of Website20-35
    • § 20:11.6 : Registration Statement on Form S-820-35
    • § 20:11.7 : Exchange of Stock Certificates20-35
  • § 20:12 : Looking Beyond the Closing20-36
    • § 20:12.1 : Post-Offering Quiet Period20-36
    • § 20:12.2 : Investor Relations20-37
  • § 20:13 : Pricing But Not Closing20-37
    • § 20:13.1 : Failure to Close Due to External Events20-37
    • § 20:13.2 : Failure to Close Due to Adverse Company Developments20-38
  • Table 20-1 : Firm-Commitment IPOs That Priced But Did Not Close20-38
    • § 20:13.3 : Failure to Close Due to Underwriter Issues20-40
  • § 20:14 : Abandoning the IPO20-40
    • § 20:14.1 : When an IPO Is Canceled20-40
    • § 20:14.2 : When an IPO Is Delayed20-41
    • § 20:14.3 : Aftermath of a Failed IPO20-42
  • Appendix 20A : Examples Of Pricing Below The Range Or Reducing The Offering SizeApp. 20A-1
  • Appendix 20B : Examples of Pricing Above the Range or Increasing the Offering SizeApp. 20B-1
  • Appendix 20C : How Do You Compare? Some Facts About The IPO MarketApp. 20C-1
Chapter 21: Out-of-the-Ordinary IPOs—Special Issues for Special Issuers
  • § 21:1 : Introduction21-5
  • § 21:2 : Dual Tracks21-5
    • § 21:2.1 : Rationale21-5
    • § 21:2.2 : Challenges and Implications21-6
      • [A] : Importance of Confidentiality21-6
      • [B] : Disclosure Issues21-6
      • [C] : Selection of Legal Advisors21-6
      • [D] : Selection of Financial Advisors21-7
      • [E] : Potential for Conflicted Motivations21-7
      • [F] : Board Duties21-7
      • [G] : Valuation Impact21-8
      • [H] : Timing Considerations21-8
      • [I] : Contractual Arrangements with Bidders21-8
      • [J] : Sale Terms21-9
      • [K] : Emerging Growth Company Considerations21-9
      • [L] : Unwinding the IPO21-10
      • [M] : Extra Effort and Expense21-10
    • § 21:2.3 : Outlook21-10
  • § 21:3 : Issuers Subject to Reduced Disclosure Requirements21-11
    • § 21:3.1 : Emerging Growth Companies21-11
    • § 21:3.2 : Smaller Reporting Companies21-12
      • [A] : Background21-12
      • [B] : Relaxed Disclosure Rules21-13
        • [B][1] : Overview21-13
        • [B][2] : Gaining and Losing Eligibility21-14
        • [B][3] : Scaled Disclosure21-15
  • Table 21-1 : Scaled Disclosure Under Regulation S-K21-16
    • [C] : Implications for IPO Companies21-19
    • [D] : Relationship of Smaller Reporting Company Category to Other Public Company Categories21-21
    • [E] : Outlook21-22
  • § 21:4 : Issuers Facing Special Considerations21-22
    • § 21:4.1 : Venture Capital–Backed IPOs21-23
      • [A] : Overview21-23
      • [B] : IPO Considerations21-23
        • [B][1] : Heightened Urgency21-24
        • [B][2] : Investor Involvement21-24
        • [B][3] : Selling Stockholders21-24
        • [B][4] : Committee Membership21-24
        • [B][5] : Transition in Board Membership21-25
        • [B][6] : Section 16 Issues21-26
        • [B][7] : Potential Conflicts of Interest21-26
      • [C] : Outlook21-27
    • § 21:4.2 : Life Sciences IPOs21-27
      • [A] : Overview21-27
      • [B] : IPO Considerations21-28
        • [B][1] : Complex Operations21-28
        • [B][2] : IPO Challenges21-29
        • [B][3] : Advisors21-29
        • [B][4] : Post-IPO Funding21-29
      • [C] : Outlook21-30
    • § 21:4.3 : Private Equity–Backed IPOs21-30
      • [A] : Overview21-30
      • [B] : IPO Considerations21-30
        • [B][1] : Company Profile21-31
        • [B][2] : Prior Public Company History21-31
        • [B][3] : Capital Structure and Needs21-31
        • [B][4] : Possible Exemptions from Corporate Governance Requirements21-31
        • [B][5] : Captive Relationships21-31
        • [B][6] : Disclosure Issues21-32
        • [B][7] : Potential Conflicts of Interest21-32
      • [C] : Outlook21-32
    • § 21:4.4 : Special Purpose Acquisition Companies21-33
      • [A] : Overview21-33
      • [B] : General Characteristics21-34
        • [B][1] : Management Team21-34
        • [B][2] : Insider Ownership and Restrictions21-34
        • [B][3] : Proposed Acquisition21-34
        • [B][4] : Stockholder Approval21-35
        • [B][5] : Transformation of Stockholder Base21-35
        • [B][6] : Liquidation and Return of Funds21-36
      • [C] : Advantages and Disadvantages21-36
      • [D] : IPO Terms and Process21-37
        • [D][1] : Offering Terms21-37
        • [D][2] : Prospectus Disclosures21-38
        • [D][3] : Marketing the Offering21-39
        • [D][4] : Regulatory Review21-39
        • [D][5] : Post-Offering Matters21-39
      • [E] : Outlook21-40
  • § 21:5 : Non-Traditional IPOs21-40
    • § 21:5.1 : Spin-Off IPOs21-40
      • [A] : Overview21-40
      • [B] : IPO Considerations21-41
        • [B][1] : Transaction Planning21-41
        • [B][2] : Establishment of Subsidiary21-42
        • [B][3] : Parent-Subsidiary Relationship21-42
        • [B][4] : Controlled Company Rules21-42
        • [B][5] : Separate Counsel21-42
        • [B][6] : Additional Form S-1 Disclosures21-43
      • [C] : Outlook21-43
    • § 21:5.2 : Form 10 IPOs21-43
      • [A] : Overview21-43
      • [B] : Advantages and Disadvantages21-44
      • [C] : Offering Process21-46
        • [C][1] : Pre-Financing Preparation21-46
        • [C][2] : The Private Placement21-46
        • [C][3] : Public Company Preparation21-46
        • [C][4] : Governance Preparation for Stock Exchange Listing21-47
        • [C][5] : Form 10 Registration Statement21-47
        • [C][6] : PIPE Financing21-47
        • [C][7] : Resale Form S-121-48
        • [C][8] : Over-the-Counter Trading21-48
        • [C][9] : Stock Exchange Listing21-48
      • [D] : Outlook21-48
    • § 21:5.3 : Rule 144A IPOs21-49
      • [A] : Overview21-49
      • [B] : Advantages and Disadvantages21-49
      • [C] : Private Trading Performance21-51
      • [D] : Offering Process21-51
        • [D][1] : The Placement Process21-52
        • [D][2] : Public Company Preparations21-53
      • [E] : Outlook21-53
    • § 21:5.4 : Reverse-Merger IPOs21-54
      • [A] : Overview21-54
      • [B] : Transaction Considerations21-55
        • [B][1] : Merger Agreement21-55
        • [B][2] : Due Diligence21-55
        • [B][3] : SEC Filing and Review21-55
        • [B][4] : Blue Sky Laws21-56
      • [C] : Outlook21-56
    • § 21:5.5 : Tracking Stock IPOs21-56
      • [A] : Overview21-56
      • [B] : IPO Considerations21-57
      • [C] : Outlook21-57
    • § 21:5.6 : Post-Bankruptcy IPOs21-58
      • [A] : Overview21-58
      • [B] : IPO Considerations21-58
        • [B][1] : Fresh-Start Accounting21-58
        • [B][2] : Bankruptcy Disclosures21-58
        • [B][3] : Offering Limitations21-58
        • [B][4] : Additional “Underwriter” Disclosures21-59
        • [B][5] : Exchange Listing21-59
      • [C] : Outlook21-59
  • § 21:6 : Cross-Border IPOs21-59
    • § 21:6.1 : Foreign Companies Conducting IPOs in the U.S. Market21-60
      • [A] : Overview21-60
      • [B] : “Foreign Private Issuer” Status21-60
      • [C] : American Depositary Shares21-61
      • [D] : Relaxed Disclosure Requirements for Foreign Private Issuers21-62
        • [D][1] : IFRS Financial Statements21-62
        • [D][2] : Modified Disclosure in Form F-121-63
        • [D][3] : Partial Relief from Corporate Governance Requirements21-64
        • [D][4] : Less Extensive Exchange Act Reporting21-65
        • [D][5] : Other Exemptions21-66
        • [D][6] : Confidential SEC Review21-66
      • [E] : Increased Burdens for Foreign Companies21-67
      • [F] : Termination of Reporting Obligations21-67
      • [G] : Outlook21-68
    • § 21:6.2 : U.S. Companies Conducting IPOs in Foreign Countries21-68
      • [A] : Overview21-68
      • [B] : Advantages of a Foreign Market21-69
      • [C] : Drawbacks of a Foreign-Market IPO21-69
        • [C][1] : U.S. Securities Law Issues21-69
        • [C][2] : Reincorporation21-70
        • [C][3] : Additional Challenges and Limitations21-71
      • [D] : Outlook21-72
    • § 21:6.3 : Listing on AIM21-72
      • [A] : Overview21-72
      • [B] : Admission Process21-73
        • [B][1] : No Regulatory Review21-73
        • [B][2] : Nomad Arrangements21-73
        • [B][3] : Appointment of Market Maker21-74
        • [B][4] : Pre-Offering Publicity Practices21-74
        • [B][5] : Due Diligence21-75
        • [B][6] : Placement Arrangements21-75
        • [B][7] : Scope of Disclosure21-75
        • [B][8] : Investor Agreements21-75
      • [C] : Outlook21-75
Chapter 22: First Days As a Public Company; and Appendix 22A
  • § 22:1 : Introduction22-3
  • § 22:2 : Company Reporting Obligations22-3
    • § 22:2.1 : Classification of Public Companies22-4
    • § 22:2.2 : Exchange Act Reporting22-6
      • [A] : Annual Reports on Form 10-K22-6
  • Table 22-1 : Principal Exchange Act Filings and Due Dates22-7
    • [B] : Quarterly Reports on Form 10-Q22-9
  • Table 22-2 : The First Earnings Release22-11
    • [C] : Current Reports on Form 8-K22-12
  • Table 22-3 : Form 8-K Triggering Events22-14
    • [D] : Annual Reports on Form 11-K (Employee Savings and Similar Plans)22-15
    • [E] : Transition Reports22-16
    • [F] : Form 12b-25 (Late Filings)22-17
    • [G] : Form SD (Specialized Disclosure Report)22-18
    • § 22:2.3 : Additional Information Requirements22-19
      • [A] : Proxy Statements22-20
        • [A][1] : Overview22-20
        • [A][2] : SEC Filing Requirements22-20
        • [A][3] : Contents of Annual Meeting Proxy Statement22-20
        • [A][4] : E-Proxy Rules22-22
        • [A][5] : Stockholder Proposals and Proxy Access22-23
      • [B] : Annual Reports to Stockholders22-24
      • [C] : Provision of Proxy Statement and Annual Report to Plan Participants22-24
  • Table 22-4 : The First Annual Meeting of Stockholders22-25
    • [D] : California Disclosure Requirements22-27
    • § 22:2.4 : Use of Plain English in Exchange Act Filings22-28
    • § 22:2.5 : SEC Review of Exchange Act Reports22-28
    • § 22:2.6 : EDGAR Submissions As a Public Company22-30
  • § 22:3 : Non-GAAP Financial Measures22-30
    • § 22:3.1 : Overview22-30
    • § 22:3.2 : Requirements and Prohibitions22-31
    • § 22:3.3 : Industry Practices22-33
    • § 22:3.4 : SEC Interpretive Guidance22-33
  • § 22:4 : Officer Certification Requirements22-34
    • § 22:4.1 : Section 302 Certification22-35
    • § 22:4.2 : Section 906 Certification22-36
    • § 22:4.3 : Sub-Certifications22-37
  • § 22:5 : Preparation and Certification of SEC Filings22-38
    • § 22:5.1 : The High Stakes of Disclosure Obligations22-38
    • § 22:5.2 : Development and Documentation of Process22-39
    • § 22:5.3 : Formation of Disclosure Committee22-39
    • § 22:5.4 : Evaluation of Controls and Procedures22-40
    • § 22:5.5 : Preparation of SEC Filings22-42
    • § 22:5.6 : Review of Draft SEC Filings22-45
    • § 22:5.7 : Timetable for Timely Quarterly Reporting22-47
  • Table 22-5 : Illustrative Quarterly Reporting Timetable22-47
  • § 22:6 : Individual Reporting and Liability22-49
    • § 22:6.1 : Applicability of Section 1622-49
    • § 22:6.2 : Reporting Beneficial Ownership22-50
      • [A] : Ownership That Must Be Reported22-52
      • [B] : Trusts22-52
      • [C] : Transition Periods22-53
      • [D] : Procedures for Preparing, Filing, and Posting Section 16 Reports22-54
      • [E] : Sanctions22-54
    • § 22:6.3 : “Short-Swing” Profits22-55
      • [A] : Generally22-56
      • [B] : Directors and Officers22-56
      • [C] : 10% Stockholders22-56
      • [D] : “Purchase” and “Sale”22-57
      • [E] : Determination of “Profit”22-57
      • [F] : Common Exemptions22-57
    • § 22:6.4 : Short Sales22-58
    • § 22:6.5 : Cashless Option Exercises Under the Sarbanes-Oxley Act22-58
    • § 22:6.6 : Trading Restrictions During Pension Fund Blackout Periods22-59
    • § 22:6.7 : Section 13 Reporting22-60
      • [A] : Beneficial Ownership22-60
      • [B] : Schedule 13D22-61
      • [C] : Schedule 13G22-61
      • [D] : Sanctions22-62
  • § 22:7 : Insider Trading22-62
    • § 22:7.1 : Generally22-62
    • § 22:7.2 : Definition of Material Nonpublic Information22-64
    • § 22:7.3 : Rule 10b5-1 Trading Plans22-65
    • § 22:7.4 : Sanctions22-65
    • § 22:7.5 : Insider Trading Policy22-66
  • § 22:8 : Section 162(m)22-66
    • § 22:8.1 : Transition Rules22-66
    • § 22:8.2 : Performance-Based Compensation22-67
  • § 22:9 : Inadvertent Investment Company Issues22-69
    • § 22:9.1 : Overview22-69
    • § 22:9.2 : Investment Company Status22-70
    • § 22:9.3 : Avoiding Investment Company Regulation22-70
      • [A] : Private Investment Companies22-71
      • [B] : One-Year Safe Harbor22-71
      • [C] : R&D Safe Harbor22-71
      • [D] : 45% Asset/Income Test22-72
      • [E] : SEC Exemptive Relief22-73
    • § 22:9.4 : Planning Considerations22-73
  • Appendix 22A : Summary of Public Company Obligations and ConsequencesApp. 22A-1
Chapter 23: Investor Relations and Other Public Communications
  • § 23:1 : Introduction23-2
  • § 23:2 : Legal Background23-3
    • § 23:2.1 : Duties to Disclose, Update, and Correct23-3
    • § 23:2.2 : Antifraud Rules23-4
      • [A] : Rule 10b-523-4
      • [B] : Entanglement and Adoption23-4
    • § 23:2.3 : PSLRA Safe Harbor23-5
      • [A] : Applicability23-5
      • [B] : Written Statements Versus Oral Statements23-5
    • § 23:2.4 : Regulation FD23-6
      • [A] : Company Representatives Subject to Regulation FD23-7
      • [B] : Recipients Triggering Public Disclosure Obligation23-7
      • [C] : Disclosures Not Subject to Regulation FD23-7
      • [D] : Intentional and Non-Intentional Disclosures23-8
      • [E] : Manner of Required Public Disclosure23-9
        • [E][1] : General Requirements23-9
        • [E][2] : Website Postings and Social Media23-9
      • [F] : Liability and Enforcement23-11
  • § 23:3 : Interactions with Securities Analysts and Investors23-12
    • § 23:3.1 : Conference Calls with the Investment Community23-12
  • Table 23-1 : Sample Disclaimers for Conference Calls23-14
    • § 23:3.2 : One-on-One Calls or Meetings23-15
    • § 23:3.3 : Limited-Access Forums23-17
    • § 23:3.4 : Other Interactions with Securities Analysts23-18
      • [A] : Review of Analyst Reports23-18
      • [B] : Distribution of Analyst Reports23-19
      • [C] : Endorsement of Analyst Projections23-19
      • [D] : Confidential Disclosure to Analysts23-19
  • § 23:4 : Guidance on Future Financial Results23-20
    • § 23:4.1 : Electing to Provide Guidance23-20
    • § 23:4.2 : Minimizing the Potential Risks of Providing Guidance23-21
  • § 23:5 : Press Releases23-23
    • § 23:5.1 : Press Release Versus Form 8-K; Timing23-23
    • § 23:5.2 : Press Release Guidelines23-23
  • § 23:6 : Media Relations23-26
  • § 23:7 : Company Website23-27
    • § 23:7.1 : Overview23-27
    • § 23:7.2 : Posting of Governance Information and SEC Filings23-28
      • [A] : Section 16 Reports23-28
      • [B] : Accelerated Filers23-28
      • [C] : Code of Ethics23-28
      • [D] : Audit Committee Charter23-29
      • [E] : NYSE Rules23-29
      • [F] : Other Governance Materials23-29
    • § 23:7.3 : Administration of the Website23-29
    • § 23:7.4 : Website Content23-31
    • § 23:7.5 : Third-Party Links23-32
    • § 23:7.6 : Legends and Disclaimers23-34
  • § 23:8 : Social Media23-35
Chapter 24: Post-IPO Liquidity, Fundraising, and Acquisitions
  • § 24:1 : Introduction24-3
  • § 24:2 : Registration Statements on Form S-824-3
    • § 24:2.1 : Overview24-3
    • § 24:2.2 : Resales24-3
    • § 24:2.3 : Timing Considerations24-4
  • § 24:3 : Rule 14424-4
    • § 24:3.1 : Overview24-4
    • § 24:3.2 : Sales by Affiliates24-5
      • [A] : Current Public Information24-5
      • [B] : Holding Period for Restricted Securities24-6
      • [C] : Limitation on Amount of Securities Sold24-6
      • [D] : Manner of Sale24-7
      • [E] : Notice of Sale24-7
    • § 24:3.3 : Sales by Non-Affiliates24-8
    • § 24:3.4 : Special Rule for Shell Companies24-8
  • § 24:4 : Rule 70124-8
  • § 24:5 : Other Resale Considerations24-9
    • § 24:5.1 : Threshold Issues24-9
    • § 24:5.2 : Insider Trading24-10
    • § 24:5.3 : Section 16 Liability24-10
    • § 24:5.4 : Reporting Obligations24-11
  • § 24:6 : “Short-Form” Registration on Form S-324-11
    • § 24:6.1 : Advantages24-11
    • § 24:6.2 : Eligibility24-12
      • [A] : Company Requirements24-12
      • [B] : Transaction Requirements24-13
        • [B][1] : Primary Offerings of Securities24-13
        • [B][2] : Primary Offerings of Non-Convertible Securities (Other Than Common Stock)24-13
        • [B][3] : Rights Offerings, Reinvestment Plans, Conversions, and Exercises24-14
        • [B][4] : Secondary Offerings24-14
  • § 24:7 : Secondary Public Offerings24-14
    • § 24:7.1 : Overview24-14
    • § 24:7.2 : Registration Requirements24-15
    • § 24:7.3 : Deal Process24-15
  • § 24:8 : Follow-On Public Offerings24-17
    • § 24:8.1 : Registration and Disclosure Requirements24-17
      • [A] : Form S-124-17
      • [B] : Form S-324-18
      • [C] : Shelf Offerings24-18
      • [D] : WKSI Shelf Offerings24-18
      • [E] : At-the-Market Offerings24-19
      • [F] : Hybrid Public-Private Offerings24-19
    • § 24:8.2 : Stockholder Approval24-21
    • § 24:8.3 : FINRA Clearance24-22
      • [A] : Exempt Offerings24-23
      • [B] : Non-Exempt Offerings24-23
        • [B][1] : Shelf Offerings24-23
        • [B][2] : WKSI Shelf Offerings24-24
        • [B][3] : Non-Shelf Offerings24-24
    • § 24:8.4 : Deal Process24-24
    • § 24:8.5 : Outlook24-26
  • § 24:9 : Rule 144A Placements24-26
    • § 24:9.1 : Deal Process24-27
    • § 24:9.2 : Stockholder Approval24-28
    • § 24:9.3 : Private Resales of Rule 144A Securities24-28
    • § 24:9.4 : Exchange Offers; Public Resales of Rule 144A Securities24-29
    • § 24:9.5 : Advantages24-29
    • § 24:9.6 : Outlook24-30
  • § 24:10 : PIPE Financings24-31
    • § 24:10.1 : Deal Process24-31
    • § 24:10.2 : Stockholder Approval24-34
    • § 24:10.3 : Outlook24-34
  • § 24:11 : Private Debt Financing24-34
  • § 24:12 : Selected Public Company M&A Issues24-36
    • § 24:12.1 : General Considerations24-36
  • Table 24-1 : Tips to Minimize Litigation Risk24-37
    • § 24:12.2 : Due Diligence24-38
    • § 24:12.3 : Merger Agreement24-38
    • § 24:12.4 : SEC Involvement24-39
    • § 24:12.5 : Stockholder Approval24-40
    • § 24:12.6 : Cash Tender Offers24-41
  Glossary
  Organizational Meeting Agenda and Checklist
  Timetable and Responsibility Checklist (Non-Emerging Growth Company)
  Timetable and Responsibility Checklist (Emerging Growth Company)
  Due Diligence Request List
  Filing Checklist
  Confidential Submission Checklist
  Road Show Launch Checklist
  Effectiveness and Pricing Checklist
  Closing Checklist
  Director, Officer, and 5% Stockholder Questionnaire (NASDAQ Company)
  Director, Officer, and 5% Stockholder Questionnaire (NYSE Company)
  Selling Stockholder Questionnaire
  FINRA Questionnaire (Issuer)
  FINRA Questionnaire (Individual)
  Executive Compensation Questionnaire
  Audit Committee Charter (NASDAQ Company)
  Audit Committee Charter (NYSE Company)
  Compensation Committee Charter (NASDAQ Company)
  Compensation Committee Charter (NYSE Company)
  Nominating and Corporate Governance Committee Charter (NASDAQ Company)
  Nominating and Corporate Governance Committee Charter (NYSE Company)
  Corporate Governance Guidelines (NYSE Company)
  Code of Business Conduct and Ethics
  Insider Trading Policy
  Related Person Transaction Policy
  Disclosure Policy
  Disclosure Controls and Procedures
  Restated Certificate of Incorporation (Public Delaware Corporation)
  Amended and Restated Bylaws (Public Delaware Corporation)
  Table of Initial Public Offerings
  Table of Cases
  Index

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