Pre-IPO Disclosures – What is the waiting period? – (44)

What are “testing-the-waters” communications by or
on behalf of an EGC?
The JOBS Act provides an EGC, or any other person, such as its underwriter, that it authorizes to act on its behalf, with the flexibility to engage in oral or written communications with QIBs and institutional accredited investors in order to gauge their interest in a proposed offering, whether prior to (irrespective of the 30-day safe harbor) or following the first filing of any registration statement, subject to the requirement that no security may be sold unless accompanied or preceded by a Section 10(a) prospectus. An EGC may utilize thetesting-the-waters provision with respect to any registered offerings that it conducts while qualifying for EGC status. There are no form or content restrictions on these communications, and there is no requirement to file written communications with the SEC. In their comment letters on registration statements, the SEC Staff typically requests to see any written test- the-waters materials, which can also provide it with guidance about information that should be included in the prospectus.
What is the waiting period?
The SEC targets 30 calendar days from the registration statement filing or confidential submission date to respond with comments. It is not unusual for the first SEC comment letter to contain a significant number of comments that the issuer must respond to both in a letter and by amending the registration statement. After the SEC has provided its initial set of comments, it is much easier to determine when the registration process is likely to be completed and the offering can be made. In most cases, the underwriters do not begin the formal offering process and distribute a preliminary prospectus

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