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Preparing to go public<br />
on their relationship with the company,<br />
industry expertise, research analyst<br />
capabilities and market-making ability.<br />
Underwriters’ counsel: The bookrunners,<br />
on behalf of the underwriters, will select<br />
a counsel to act for them in connection<br />
with the IPO. This role includes advising<br />
the underwriters generally on managing<br />
their own liability in connection with the<br />
IPO, including ensuring that the offering<br />
disclosure does not contain any material<br />
misstatements or omissions, and that<br />
any issues that arise in due diligence are<br />
thoroughly and appropriately dealt with,<br />
whether by disclosure or otherwise. In<br />
addition, underwriters’ counsel prepares<br />
drafts of the underwriting agreement<br />
and lock-up agreements and negotiates<br />
them with company counsel, as well as<br />
negotiating the terms of the comfort<br />
letter to be delivered to the underwriters<br />
by the company’s auditors.<br />
Other advisors: In addition to the above,<br />
it may be appropriate to appoint various<br />
other advisors in connection with the<br />
IPO, such as a compensation consultant<br />
(to advise the company on the structure<br />
of its stock-based compensation and<br />
related disclosures in the registration<br />
statement), a roadshow coach (to advise<br />
the management team, alongside the<br />
underwriters, on the most effective way of<br />
presenting the company and its business<br />
during the roadshow), and an investor<br />
relations firm.<br />
Other service providers: Aside from the<br />
advisory team, the company will require<br />
the services of a number of service<br />
providers in connection with its IPO:<br />
Financial Printers and Data Room Providers:<br />
The company will need to appoint a<br />
specialist firm of financial printers<br />
to typeset and format its registration<br />
statement and deal with the submission of<br />
it to the SEC via EDGAR, as well as process<br />
subsequent changes to the registration<br />
statement resulting from SEC comments<br />
and general updates. The financial printer<br />
is also likely to provide virtual data<br />
room services to the company, enabling<br />
documents required for the due diligence<br />
process to be uploaded and viewed<br />
electronically by the working group.<br />
Transfer Agent: To list its stock on the<br />
NYSE, the company will need to appoint<br />
a transfer agent that complies with the<br />
connectivity and insurance requirements<br />
to operate within the direct registration<br />
system of the Depository Trust Company<br />
(DTC).<br />
Electronic Roadshow Provider: Companies<br />
undertaking an IPO typically use an<br />
electronic roadshow for both the<br />
institutional and retail parts of the<br />
offering. This consists of a taped version<br />
of the roadshow, available for viewing<br />
electronically, and is usually arranged<br />
by the underwriters on behalf of the<br />
company.<br />
Stock Option / Equity Administrator: Either<br />
before or, if not, upon becoming a public<br />
company, it is common for the company<br />
to appoint a third party to manage and<br />
administer its stock option program(s).<br />
2.2 Financial information<br />
KPMG LLP<br />
(a) Registration statement<br />
An entity making an offering of securities<br />
registered with the SEC under the<br />
Securities Act of 1933 (the Securities<br />
Act) must file a registration statement<br />
and distribute a prospectus in connection<br />
with the offering. The registration<br />
statement and prospectus must contain<br />
financial statements and other financial<br />
information regarding the financial<br />
condition of the company and the results<br />
of its operations.<br />
The Securities Act and the related<br />
rules and regulations set out the<br />
requirements that the company must<br />
follow when making an offer to sell<br />
securities that do not meet one of the<br />
limited exceptions from registration.<br />
This framework includes the use of<br />
forms for registrations of offers (in<br />
particular, Forms S-1, S-3, S-4 and S-11).<br />
These forms specify the information<br />
that must be disclosed under Regulation<br />
S-X and Regulation S-K. Regulation S-X<br />
generally deals with financial statement<br />
form and content, while Regulation<br />
S-K generally deals with nonfinancial<br />
statement disclosures in the body of the<br />
registration statement. Form S-1 is the<br />
basic registration form used for a U.S.<br />
company’s IPO. Form S-3 is generally<br />
used for the registration of securities by<br />
a company that already has securities<br />
registered with the SEC, while Form S-4<br />
is generally used for the registration of<br />
debt or equity securities issued in relation<br />
to a merger or acquisition. Form S-11 may<br />
be used for the registration of securities<br />
issued by certain real estate companies,<br />
including real estate investment trusts<br />
or securities issued by other companies<br />
whose business is primarily that of<br />
acquiring and holding for investment<br />
interests in real estate.<br />
The SEC has specific and complex<br />
rules regarding the financial statements<br />
and other financial information that must<br />
be presented in a registration statement<br />
for an IPO. Some of the significant<br />
financial statement information that may<br />
be required includes:<br />
• audited annual financial statements for<br />
recent fiscal years;<br />
• unaudited interim financial statements<br />
for the most recently completed<br />
interim period and the corresponding<br />
period of the preceding year;<br />
• selected financial information (usually<br />
summarized from the company’s<br />
financial statements) for the past<br />
five fiscal years and most recently<br />
completed subsequent interim period<br />
and its comparative period;<br />
• separate audited annual and unaudited<br />
interim financial statements for<br />
businesses that have been acquired<br />
or will probably be acquired that<br />
meet certain significance thresholds<br />
(described below). Depending on the<br />
significance of the acquisition, the<br />
company may be required to present<br />
one to three years of audited financial<br />
statements;<br />
• separate audited or unaudited annual<br />
financial statements for significant<br />
investments accounted for under<br />
the equity method that meet certain<br />
significance thresholds;<br />
• financial statements of guarantors of<br />
securities being offered and affiliates<br />
whose securities collateralize the<br />
securities being offered;<br />
• pro forma financial information<br />
giving effect to certain events such<br />
as significant business acquisitions/<br />
dispositions, reorganizations, unusual<br />
asset exchanges and debt restructurings;<br />
NYSE IPO Guide<br />
15