When a company conducts an initial public offering (IPO) with the goal of listing its shares on a national securities exchange (e.g., NYSE American, Nasdaq), it must file a Form 8-A12(b) (also known as Form 8-A) with the Securities and Exchange Commission (the “SEC”). This filing registers the IPO shares under the Securities Exchange Act of 1934 (the “Exchange Act”), making the company an Exchange Act reporting company—a requirement for listing on the exchange. When utilizing Regulation A under the Securities Act of 1933 (the “Securities Act”) for an IPO, companies must take care to adhere to the specific timing requirements for filing the Form 8-A.
S-1 Registered IPO – Firm Commitment
In a standard IPO involving a national securities exchange listing, once the company’s Form S-1 registration statement is declared effective by the SEC under the Securities Act, and the IPO is ready to close, the company files a Form 8-A12(b). This is done immediately before the closing, provided the exchange has approved the listing of the shares. This filing is necessary for the company to become an Exchange Act reporting company, which is required for listing. In a firm commitment underwritten offering, where underwriters purchase the shares at closing for immediate resale to IPO investors, the shares typically begin trading on the exchange within one or two days after the SEC declares the registration statement effective.
S-1 Registered IPO – “Best Efforts”
In an S-1 registered “best efforts” IPO, underwriters act as placement agents, selling the company’s shares to investors without being required to purchase any shares themselves. The Form 8-A12(b) is filed with the SEC once the offering is sold and ready to close, which may occur 30 or more days after the SEC declares the Form S-1 effective, depending on how long it takes the placement agents to sell the offering.
Regulation A IPO
More recently, underwriters have begun utilizing Regulation A under the Securities Act for IPOs, allowing companies to leverage a crowd-financed approach to capital raising.
Once the Regulation A Form 1-A offering statement is declared “qualified” by the SEC, the IPO is conducted on a “best efforts” basis. The underwriters, acting as placement agents, sell the shares to investors on an agency basis, a process that can take 30 to 60 days or longer. The Form 8-A12(b) must be filed with the SEC once the offering is sold and ready to close, as this Exchange Act registration is required for the shares to be listed on a national securities exchange.
Important Consideration: Timing of Form 8-A Filing
In a Regulation A IPO with a national securities exchange listing, the timing of the Form 8-A filing is crucial. According to the Form 8-A instructions, Exchange Act registration is not allowed if the Form 8-A is filed more than five calendar days after the SEC qualification of the Regulation A offering statement. In most Regulation A best efforts IPOs, the selling process takes longer than five days, necessitating the filing of a post-qualification amendment (PQA) to the Form 1-A. The SEC must then qualify this PQA, after which the company can file the Form 8-A12(b) within the new five-day window. Once the PQA is qualified, the offering can close, and the shares can begin trading on the exchange, assuming the exchange has approved the listing.
Even if there are no changes to the disclosures in the offering statement (assuming the financials are not outdated), a PQA will still be required in the Regulation A, best effort IPO scenario. Because this PQA does not involve substantive changes, the SEC typically reviews and qualifies it quickly. However, timing is critical—ensure there is sufficient time between the PQA filing, SEC qualification, and the planned IPO closing and start of trading dates. Delays at the SEC could disrupt your offering schedule and negatively impact your IPO.
If you are considering an IPO, whether under Regulation A or by way of the more traditional S-1 path, don’t hesitate to contact Paul Levites at paul@bevilacquapllc.com or 202-869-0888 (ext. 103).
1 Including our client, Digital Offering LLC.
2 A “crowd-financed” offering means an equity financing effort under Regulation A of the Securities Act in which securities are sold to the “crowd,” or retail investors, rather than to institutions. Crowd-financed offerings should not be confused with what is commonly referred to as a “Crowdfunding Offering,” which is a securities offering conducted on a FINRA and SEC-registered funding portal under Regulation Crowdfunding of the Securities Act.
This post contains general information. This post is not intended: (a) to convey or constitute legal advice on any subject matter; (b) to establish an attorney-client relationship; or (c) to be a solicitation. Also keep in mind that prior results in a legal matter do not guarantee a similar outcome in another legal matter.
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