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US IPO Guide

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US IPO Guide Subject to improvement and expansion in subsequent editions, dated June 15, 2021 US IPO Guide 2021 EDITION _______________________________________ This is our initial public offering guide. It will help you decide whether an IPO is the right move for your company and, if so, help you make sure your IPO goes off as quickly and as smoothly as possible, without any unpleasant surprises. Prior to this offering, there will have been no public market for your common stock, but we will help you understand what will be required of you as a public company and how to make the transition to life in the limelight. _______________________________________ Undertaking an IPO involves risks. See “Summary” beginning on page 1 to read about common pitfalls and how good advance planning and legal advice can help you avoid them. Per Share Total Price to the public ..................................................................................................................... $ $ Underwriting discounts and commissions(1) .............................................................................. $ $ minute guidance. - Proceeds, before expenses, to us ............................................................................................ $ $ the - _______________________________________ to - (1) The underwriters are crucial players in conducting a successful offering.You and your counsel will be spending lots of quality time with them, their counsel, and your auditors. Closing of your offering should occur approximately 120-180 days after you say “go.” Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of this guide, or passed upon the accuracy or adequacy of this guide. We hope this guide will make the IPO process less mysterious and the goal of going public more attainable. The information in this guide represents only a fraction of our accumulated expertise capital markets transactions and does not constitute legal advice. Never hesitate to check with us for up Athos & Co. Porthos Securities LLC Aramis Inc. Summary ..............................................................................................................................................................1 The IPO Business ..............................................................................................................................................11 Some Basics ................................................................................................................................................... 11 Securities Act of 1933 and Securities Exchange Act of 1934 ..................................................................... 11 JOBS Act .................................................................................................................................................... 11 EGC Status ................................................................................................................................................ 11 Elements of the IPO On-Ramp ...................................................................................................................12 EGCs and the IPO Process ........................................................................................................................12 Testing the Waters .................................................................................................................................12 Scaled Financial Disclosures .................................................................................................................12 Research ....................................................................................................................................................13 Gun Jumping — Restrictions on Communications During the IPO Process ...................................................14 How It All Works Together — The Gun-Jumping Flowchart .......................................................................14 What Is Gun Jumping? ...............................................................................................................................15 Restrictions on Communications During the Quiet Period .........................................................................15 The 30-Day Bright Line Safe Harbor — Securities Act Rule 163A ........................................................16 Pre-Filing Public Announcements of a Planned Offering — Securities Act Rule 135 ............................16 Factual Business Communications by Non-Reporting Issuers and Voluntary Filers — Securities Act Rule 169 ..........................................................................................................................17 Restrictions on Communications During the Waiting Period ......................................................................17 Limited Post-Filing Communications — Securities Act Rule 134 ...............................................................17 Testing the Waters ......................................................................................................................................18 Preliminary Prospectus (Red Herring) ........................................................................................................19 Road Shows ...............................................................................................................................................19 Free Writing Prospectuses (FWPs) ............................................................................................................20 Overview ................................................................................................................................................20 Why Are FWPs Permitted? — Securities Act Rule 164(a) .....................................................................20 Use of FWPs — Securities Act Rule 433(b) ..........................................................................................21 What Can Be in an FWP? — Securities Act Rule 433(c) .......................................................................21 Media FWPs — Securities Act Rule 433(f) ............................................................................................21 When Must FWPs Be Filed? — Securities Act Rule 433(d) ..................................................................22 Certain Failures to File and Failures to Include the Required Legend — Securities Act Rule 164 ............... 22 Restrictions on Communications After Effectiveness of the Registration Statement; Prospectus Delivery ...................................................................................................................................23 Concurrent Private Offerings ......................................................................................................................23 IPO Financial Statements .................................................................................................................................27 What Financial Statements Must Be Included? ..............................................................................................27 What Financial Statements Must Be Included to Begin SEC Review? ...........................................................28 Additional Financial Information That Is Typically Included ............................................................................28 Summary Financial Data ............................................................................................................................29 Recent Financial Results ............................................................................................................................29 Recent Developments ................................................................................................................................29 Non-GAAP Financial Measures .................................................................................................................29 Selected IPO Financial Statement Issues .......................................................................................................30 Cheap Stock ...............................................................................................................................................30 Segment Reporting ....................................................................................................................................30 Internal Control Over Financial Reporting .......................................................................................................31 Upsizing and Downsizing an IPO .....................................................................................................................35 Rule 430A .......................................................................................................................................................35 Instruction to Rule 430A(a) .........................................................................................................................36 C&DI 227.03 ...............................................................................................................................................36 C&DI 627.01 ...............................................................................................................................................37 Section 11 and Section 12 ..............................................................................................................................37
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