Pre-IPO Disclosures – What is the waiting period? – (45)

until the SEC has reviewed at least the first filing and all material changes suggested by the SEC Staff have been addressed.
Marketing generally begins during the waiting period although an EGC can make test-the-waters communications even before filing the registration statement. Section 5(b)(1) of the Securities Act requires that written offers must include the information required by Section 10. The only written sales materials that may be distributed during this period are the preliminary prospectus and additional materials known as “free writing prospectuses,” which must satisfy specified SEC requirements. See “What is a free writing prospectus?”. While Section 5(a) of the Securities Act prohibits binding commitments during the period before the registration statement becomes effective, the underwriters will receive indications of interest from potential purchasers that should allow the underwriters to determine the final price and number of shares to be offered. Once SEC comments are resolved, or it is clear that there are no material open issues, the issuer and underwriters will undertake a two- to three-week “road show,” during which company management will meet with prospective investors. Once SEC comments are cleared and the underwriters have assembled indications of interest for the offered securities, the company and its counsel will request that the SEC declare the registration statement “effective” at a certain date and time, usually after the close of business of the U.S. securities markets on the date scheduled for pricing the offering. For more information, see “Marketing the IPO.”

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