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JOBS Act “goes live” | Deal Insight

With the paucity of time and the concise video analysis leads available from the Networks, this writer has become a lazy beast of burden. Or so it feels as the STOCK ACT of yesterday is followed by the JOBS Act for Emerging Growth companies, I had suggested to be a little snide too as it allows abbreviated filings in Tech IPOs allowing companies to selectively hide information from the public till six months after the IPO. See Quid Pro quo in the JOBS Act here

Among the clauses coming online ( Bloomberg TV) are allowing $1 bln or lesser turnover companies a $2 bln in funding including a $1 mln in crowd funding thru their own portal, allowing these emerging growth companies to file a Draft S1 statement with the SEC The limit for 500 investors in SEC rule 12 (g) of the Securities Exchange Act of 1934 is now for 500 non accredited investors and 2000 investors  are allowed before requiring the company’s registration with the SEC/going public

If the company does not cross the $1 bln threshold ( Hint: REid Hoffman is a Founder Director) in 5 years after going public it stops being an emerging growth company, and also if it becomes an “large accelerated filer” which is more likely  (after reaching issuance of $700 mln in equity)

And some more we relied on other sources:

  1. EGCs will provide only two year’s financials and will not apply new GAAP standards or PCAOB comments and implement suggestions like auditor rotation as they would as a private company
  2. Senior management of the company would not sign off Sarb Ox mandated reports nor any Sarb Ox mandated Auditor reports be required
  3. EGCs will not be required to disclose compensation details like ratio of CEO pay to median employee pay
  4. EGCs will be exemptfrom the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) for separate non-binding shareholder votes on executive compensation arrangements, including golden parachute compensation, during the period of time it qualifies as an emerging growth company—and for up to three years after it no longer qualifies.
  5. Also the private issuer, in his first time, can opt for book building thru solicitation and advertising ( at least using a prospectus to inform investors ) as long as he is careful about investor accredition under Rule 506 or QIB status for 144A

And MLK day / Easter  are not Federal Holidays.

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