5. The Going-Public Process 46

Filing and SEC review
Upon completion of the draft registration statement, it is sent to the printer. You will want to ensure that this draft is somewhat final, so as to avoid unnecessary reprinting/amending costs at the printer. However, it is common for several lengthy drafting sessions to occur at the printer. When the registration statement has been completed, the document, including exhibits, is filed with the SEC
by electronic transmission through EDGAR. The registration statement must contain appropriate signatures in typed form; each signatory must manually sign a signature page acknowledging inclusion of his or her typed signature in the electronic filing. This signature page must be retained by the company for a period of five years.
Once filed with the SEC, registration statements are processed and reviewed by the staff of the Division of Corporation Finance, generally consisting of an attorney, an accountant, and/or a financial analyst. The group may also consult with other staff members familiar with a particular industry (such as mining or petroleum engineers). The staff reviews the documents to determine whether there is full and fair disclosure, particularly to determine whether the document contains misstatements or omissions of material facts. The SEC staff’s review, however, cannot be relied upon to assure the accuracy or completeness of the data.
The review of financial data is performed by a staff accountant who reads the entire prospectus and the remainder of the registration statement to become familiar with the company and its business. The staff accountant may also refer to published annual and interim reports and newspaper articles and the Internet for information regarding the company and its industry. This review is primarily directed at the financial statements, other financial data, and the independent accountant’s report. Its purpose is to determine whether the data complies with SEC regulations and all applicable authoritative accounting literature, as well as with various SEC staff interpretations and policies dealing with accounting and auditing issues.
Although securities law contemplates a review of registration statements filed with the SEC, it does not prescribe the specific review procedures. The SEC staff has developed and adopted review procedures that provide for issuance of comments to registrants (and permit necessary registration statement revisions to be made) without formal proceedings. The informal comment technique has proved to be an effective method of communicating and resolving questions and defects before permitting a registration statement to become effective.
Maintaining open communication with the SEC staff serves to expedite the registration process. To save time, company counsel generally maintains close telephone contact with the SEC staff while the registration statement is
being reviewed.
46
PricewaterhouseCoopers LLP Roadmap for an IPO

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