Pre-IPO Disclosures – What is the SEC review process? – (59)

complexity of the company’s business and the nature of the issues raised in the review process. Initial comments on Form S-1 are provided in about 30 days—depending on the SEC’s workload and the complexity of the filing, the receipt of first-round comments may take longer.
The SEC’s initial comment letter typically includes about 20 to 30 comments, with a majority of the comments addressing accounting issues. The company and counsel will prepare a complete and often lengthy response. In some instances, the company may not agree with the SEC Staff’s comments, and may choose to schedule calls to discuss the matter with the SEC Staff. The company will file (or confidentially submit) an amendment revising the prospectus, and provide the response letter along with any additional information. The SEC Staff generally tries to address response letters and amendments within 10 days, but timing varies considerably. This timing is the same whether the registration statement is filed publicly or submitted confidentially.
The SEC makes comment letters and responses from prior reviews available on its website, so it is possible to determine the most typical comments raised during the IPO process and, if appropriate, to address them in the first filing. Overall, the SEC Staff looks for a balanced, clear presentation of the information required in the registration statement. Some of the most frequent comments raised by the SEC Staff on disclosure, other than on the financial statements, focus on whether the risk factors are specific to a company and devoid of mitigating language, whether the MD&A addresses known trends and events that affect the company’s financial statements, operations and liquidity, and whether the description of the company’s market position is supportable by third party data. The SEC

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