anticipated date of effectiveness of the registration statement. This applies in the case of all exchange offers that do not use early commencement, including those that do not qualify for early commencement under the provisions of Rules 13e-4(e)(2) and 14d-4(b) regarding going-private transactions and roll-up transactions. An EGC that commences its exchange offer before
effectiveness of the registration statement pursuant to Securities Act Rule 162 must publicly file the registration statement (including the initial confidential submission and all amendments thereto) at least 21 days before the earlier of: the commencement date of the road show, if any, or the anticipated date of effectiveness of the registration statement, but no later than the date of commencement of the exchange offer in light of the filing requirement under Exchange Act Rules 13e-4(e)(2) and 14d-4(b). For the early commencement of exchange offers subject
only to Regulation 14E, an EGC must file its registration statement at least 21 days before the earlier of the commencement date of the road show, if any, or the anticipated date of effectiveness of the registration statement, but no later than the date of commencement of the exchange offer. An EGC must also make the required filings under
Securities Act Rule 425 (unless it is relying on the Securities Act section 5(d) provision for test-the-waters communications) and Exchange Act Rules 13e-4(c) and 14d-2(b) for pre-commencement tender offer communications. An EGC must also file the tender offer statement on Schedule TO on the date of commencement of the exchange offer under Exchange Act Rules 13e-4(b) and 14d-3(a), as applicable. In a merger where the target company is subject to
Regulation 14A or 14C and the registration statement of the EGC acquirer includes a prospectus that also serves as the target issuer’s proxy or information statement, the acquirer must publicly file the registration statement (including the initial confidential submission and all amendments thereto) at least 21 days before the earlier of the date of commencement of the road show, if any, or the anticipated date of effectiveness of the registration statement. In addition, the acquirer must make the required filings under Securities Act Rule 425 (unless it is relying on the Securities Act section 5(d) provision for test- the-waters communications) and Exchange Act Rule 14a-12(b) for any soliciting material, as applicable.6
Financial statement requirements The SEC has stated that if a target company which does not qualify as a “smaller reporting company” is to be acquired by an EGC that is not a shell company and will
JOBS Act Quick Start 37
present only two years of its financial statements in its registration statement for the exchange offer or merger, the SEC will not object if, in the registration statement filed for the merger or exchange offer, the EGC presents only two years of financial statements for the target company.7
Spin-offs The SEC has also addressed the EGC status of an issuer in the context of spin-offs and similar transactions. In circumstances where a public parent issuer decides to spin- off a wholly-owned subsidiary, register an offer and sale of the wholly-owned subsidiary’s common stock for an initial public offering, or transfer a business into a newly-formed subsidiary for purposes of undertaking an initial public offering of that subsidiary’s common stock, the subsidiary would not necessarily trigger any of the disqualification provisions in sections 2(a)(19)(A)-(D) of the Securities Act, and would thus be considered an EGC if it had less than $1 billion in revenues during its most recently completed fiscal year.8
This analysis is focused on whether
the issuer, and not its parent, meets the EGC requirements. The SEC notes that, based on the particular facts and circumstances, the EGC status of an issuer under these circumstances may be questioned if it appears that the issuer or its parent is engaging in a transaction for the purpose of converting a non-EGC into an EGC, or for the purpose of obtaining the benefits of EGC status indirectly when it is not entitled to do so directly. The SEC recommends that issuers with questions relating to these issues should contact the Division of Corporation Finance’s Office of the Chief Counsel.
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