Pre-IPO Disclosures – What disclosures may an EGC make? – (53)

an investment decision. That simple statement is often difficult to apply in practice. An issuer should be prepared for the time-consuming drafting process, during which the issuer, investment bankers, and their respective counsel work together to craft the prospectus disclosure.
What disclosures may an EGC make?
The JOBS Act created an “on-ramp” of scaled disclosure requirements for EGCs. Generally, an EGC has flexibility to choose the scaled disclosures with which it will comply, except with respect to the timing of compliance with new or revised accounting standards.
Financial Statements and MD&A. An EGC is required to present only two years of audited financial statements in its initial public offering registration statement. An EGC may also limit its MD&A to cover only those audited periods presented in the audited financial statements. The SEC will also not object if an EGC presenting two years of audited financial statements limits the selected financial data included in its initial public offering registration statement to only two years. An EGC should consider, together with its advisors, whether it makes strategic sense to include additional years of financial information.
Executive Compensation. An EGC may comply with the executive compensation disclosures applicable to a “smaller reporting company,” which means that an EGC need provide only a Summary Compensation Table (with three rather than five named executive officers and limited to two fiscal years of information), an

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