By Cydney Posner
And speaking of draft registration statements from EGCs, thecorporatecounsel.net blog notes that LegalZoom has publicly filed its S-1 after making a confidential submission shortly after the process became available. The leads are Morgan Stanley and BofA.
Presumably, the prospectus has already through the SEC comment process and reflects revisions required by the staff. Notably, there is an EGC risk factor cautioning that reduced EGC reporting requirements will make the shares less attractive to investors. In addition, this legend is on the front cover of the prospectus: "We are an "emerging growth company" under the federal securities laws and will be subject to reduced public company reporting requirements." As one data point, it appears that the company took advantage of most of the scaled disclosure requirements available to EGCs. While the prospectus includes three years of audited financial statements, there are only three years of selected financial data. With regard to executive compensation, as permitted by the JOBS Act, the prospectus names only three NEOs (not five) and includes only three tables (not seven). There is no section entitled "CD&A," although there is a substantial amount of narrative regarding compensation. For example, there is a paragraph describing the bonuses in some detail, including the metrics and targets. Interestingly, the EGC risk factor states that the company has "irrevocably elected not to avail ourself of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies."