In a departure from prior practice, this year’s SEC Government-Business Forum, an annual event typically held at the SEC’s offices in Washington, DC, will be held in partnership with the Herb Kelleher Center for Entrepreneurship, Growth, and Renewal at the McCombs School of Business at The University of Texas at Austin.  The Forum generally provides an opportunity for an engaged discussion on capital formation and other issues for smaller reporting companies.  See the release:  https://www.sec.gov/news/press-release/2017-197.

On October 17, 2017, the staff (the “Staff”) of the SEC’s Division of Corporation Finance issued two new compliance and disclosure interpretations (“C&DIs”) on the use of non-GAAP financial measures in forecasts for business combination transactions. In the first C&DI, the Staff clarified that financial measures provided to a financial advisor, including financial measures included in forecasts used in connection with a business combination transaction, would be excluded from the definition of non-GAAP financial measures, and therefore not subject to Item 10(e) of Regulation S-K and Regulation G, if and to the extent:

  • the financial measures are included in forecasts provided to the financial advisor for the purpose of rendering an opinion that is materially related to the business combination transaction; and
  • the forecasts are being disclosed in order to comply with Item 1015 of Regulation M-A or requirements under state or foreign law, including case law, regarding disclosure of the financial advisor’s analyses or substantive work.

Therefore, assuming these two conditions are satisfied, the guidance should provide comfort to M&A deal participants that the disclosure of management forecasts in merger registration statements, proxy statements and tender offer statements would not be subject to Item 10(e) of Regulation S-K and Regulation G. In the second C&DI, the Staff clarified that the exemption from Item 10(e) of Regulation S-K and Regulation G for non-GAAP financial measures disclosed in communications relating to a business combination transaction does not extend to the same non-GAAP financial measures disclosed in registration statements, proxy statements and tender offer statements.

The new C&DIs are available here.

Tuesday, October 31, 2017
12:00 p.m. – 1:30 p.m. EDT
5:00 p.m. – 6:30 p.m. BST

Token sales, also known as “ICOs,” represent a new capital-raising method that is being explored by a variety of companies in the market. In the past few months, the U.S. Securities and Exchange Commission (SEC) has provided guidance concerning token sales. Although the SEC did not declare that all digital tokens constitute securities, it cautioned, among other things, that certain tokens may be securities and that existing securities frameworks apply to token sales, notwithstanding that digital tokens may be distributed via distributed ledger technology. In addition, the IRS has published guidance relating to tokens that are “convertible virtual currencies” and has indicated that such tokens generally are treated as property for U.S. federal income tax purposes. Token sales, and the legal and regulatory landscapes in the United States and around the world with respect to digital tokens, continue to evolve.

This webinar will explore the current legal, regulatory and tax landscape relating to token offerings and will consider the following:

  • What are digital tokens and how are they typically used and sold?
  • What guidance has the SEC provided regarding token sales, and what is the significance of that guidance?
  • What guidance has the IRS provided regarding tokens, and what tax considerations are relevant to tokens and token sales?
  • What are some of the other legal matters that token issuers and their counsel should be aware of when contemplating launching token sales?

Speakers:

CLE credit is pending for California and New York.

For more information, or to register, please click here.

Since ATMs were first undertaken in the mid-1990s, there has been tremendous growth in adoption of this financing alternative.  Approximately 210 ATM offering programs were filed last year, and this year promises to exceed that.  Energy companies, utilities, and REITs remain among the most active users of ATM programs.  However, in recent years, there has been increased use of ATMs by life sciences companies.  Morrison & Foerster’s Anna Pinedo gives the basics of ATMs, as well as some of the legal and regulatory considerations, in this ThinkingCapMarkets podcast.

Our recently updated FAQs can be accessed here: Frequently Asked Questions about At-the-Market Offerings.

 

 

 

 

 

 

 

Since ATMs were first undertaken in the mid-1990s, there has been tremendous growth in adoption of this financing alternative.  Approximately 210 ATM offering programs were filed last year, and this year promises to exceed that.  Energy companies, utilities, and REITs remain among the most active users of ATM programs.  However, in recent years, there has been increased use of ATMs by life sciences companies.  We review the basics of ATMs, as well as some of the legal and regulatory considerations in our recently updated FAQs, available here: Frequently Asked Questions about At-the-Market Offerings

 

 

 

 

 

 

*Data provided by Raymond James & Associates, Inc.

 

NASDAQ Private Markets and Morrison & Foerster recently discussed Rule 504, a safe harbor for smaller offerings.  In this video blog, Anna Pinedo discusses the recent amendments to Rule 504 that, among other things, increase the offering threshold, as well as the general conditions for reliance on Rule 504.

To watch this video, visit the NASDAQ Private Markets Resource Center.

In recent months, there has been an active dialogue regarding the regulatory burdens for public companies and whether these burdens have contributed to the decline in the number of U.S. initial public offerings (“IPOs”) and companies listed on U.S. securities exchanges. One of the burdens cited by commentators relates to the extensive disclosures required under the rules and regulations of the Securities and Exchange Commission (the “Commission” or the “SEC”) for companies seeking to register IPOs under the Securities Act of 1933 and also for public-reporting companies in their filings made pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”). Long before the days of the recent presidential order seeking to limit new regulations and eliminate existing regulations, the Commission had already embarked on its own disclosure effectiveness initiative; however, in recent months, the “push” for regulatory burden relief has become a shove.

Yesterday’s release by the Commission of proposed amendments to certain Regulation S-K requirements, which we summarize in this alert, are likely just the first of several disclosure-related amendments to be issued.

Read our client alert.

As previously reported, the U.S. markets have experienced a 35% year-over-year increase in volume, with 111 IPOs completed in the first nine months of 2017, raising $26.5 billion.  A recent PwC report noted that the pharma and life sciences sectors accounted for 31% of the IPOs conducted in 2017’s third quarter with 11  IPOs raising $1.1 billion.

In Renaissance Capital’s Quarterly Report on the U.S. IPO Market, biotech IPOs are in the spotlight once again.  Renaissance reported 10 biotech IPOs conducted this past quarter.  This continues a substantial increase from the first quarter of 2017, which hit a four year-low with only three biotech IPOs completed.

Private equity-backed IPOs have fallen to their lowest volume since the first quarter of 2016.  PE-backed IPOs accounted for seven IPOs, which raised $1.4 billion across a variety of sectors.   Venture capital-backed IPOs remained steady with 13 IPOs raising $1.7 billion.  Tech companies only accounted for two of the 13 VC-backed IPOs raising $330 million, a five quarter low.

Renaissance also reports that the third quarter of 2017 saw 49 new IPO filings, a 23% increase from 2017’s second quarter.  There are now 77 companies in the IPO pipeline with 47 having filed in the past 90 days.  We will continue to monitor the IPO market on this blog.

The U.S. Department of the Treasury issued its second report (of four reports), titled “A Financial System that Creates Economic Opportunities, Capital Markets.”  The Report was issued in response to Presidential Order 137772 setting forth the Core Principles that should guide regulation of the U.S. financial system. The Report addresses various elements of the capital markets, from the equity and debt markets, to the U.S. Treasury securities market, and to derivatives and securitization.  The recommendations relating to the U.S. IPO market and reducing the regulatory burdens for companies seeking to undertake an IPO as well as for smaller public companies may be very familiar to readers of this blog, since many of the measures are included in the Financial CHOICE Act or otherwise addressed in proposed legislation or in rule proposals from the SEC.

See our alert, which may be accessed here.