The S-1 “Quiet Period,” starts when a company files an S-1 Registration Statement with the SEC and ends when the SEC staff declares the S-1 “Effective.”
During the S-1 Quiet Period, the federal securities laws place certain limitations on what information a company can release to the public. Companies that fail to comply with S-1 Quiet Period may be found to be “gun-jumping.”
Well-Known Seasoned Issuers and the S-1 Quiet Period
Well-known seasoned issuers, (“WKSI”) include those household names every investor recognize trade on the NYSE or NASDAQ. They are in the regular habit of releasing news anyway and are thus permitted anytime to use oral and written communications, including a “free writing prospectus,” subject to enumerated conditions (including, in some cases, filing with the Commission). WKSI are eligible to file a Form S-3 rather than an S-1.
No OTC Markets or OTC Bulletin Board company is going to fall under the category of a Well-Known Seasoned Issuer, and all Issuers with stock quoted on the over-the-counter markets should be especially careful with all communications during the S-1 Quiet Period.
SEC Reporting Issuers and the S-1 Quiet Period
All SEC reporting issuers are permitted to continue publishing or posting regularly released factual business information and forward-looking information. This applies to those already public companies that are filing an S-1 Registration Statement after already having a trading symbol or “ticker” and after already being subject to the reporting requirements of Section 12 of the Securities Exchange Act of 1934.
This would not apply to a company which is doing its “IPO” or initial public offering, since by nature that company is private, and not yet “fully reporting” under the Securities Exchange Act of 1934. That is, the Company is not yet releasing 10-K, 10-Q, and 8-K filings as required under the 34 Act.
Non-Reporting Issuers and the S-1 Quiet Period
Non-reporting issuers include both private companies filing an S-1 Registration Statement in order to “go public” on the OTC Bulletin Board (“OTCBB”) or OTCQB and those already public voluntary filers, Pink Sheet or Gray Sheet companies that are not SEC filers under the 34 Act.
These Non-Reporting companies can, at any time, continue publishing factual business information that is regularly released and intended for use by persons other than in their capacity as investors or potential investors.
Companies going public on the OTCBB or OTCQB by filing an S-1 Registration Statement should carefully consider the content and tone of all communications, whether they are news releases or simply posts on their blog or website. Any reference to the the pending S-1 Registration Statement, the prospectus, or the offering, is a bad idea during the S-1 Quiet Period and may be considered “gun jumping.”
If Non-Reporting companies feel compelled to release any news during the S-1 Quiet Period they should have such news or press releases reviewed by experienced securities legal counsel prior to such releases. S-1 lawyer Matt Stout can review news releases before they are posted.
Permitted Communications and the S-1 Quiet Period
The key issue to the S-1 Quiet Period is timing. Communications by all Issuers more than 30 days before filing an S-1 Registration Statement will be permitted by the SEC so long as they do not reference a securities offering that is the subject of a pending or contemplated S-1 Registration Statement.
Companies planning to file an S-1 Registration Statement should review all of their past communications to see if they may have inadvertently run afoul of this 30 day guideline, and if so, should consult with an experienced S-1 lawyer like Matheau J. W. Stout, Esq. to decide when the file their S-1 Registration Statement.
S-1 Lawyer Matt Stout Can Advise Companies on the S-1 Quiet Period
Companies interested in going public via S-1 or those public Issuers planning a resale S-1 to register securities already sold in a Private Placement can contact S-1 securities lawyer Matt Stout at (410) 429-7076 or firstname.lastname@example.org.