Yes, Consumer, Real Estate, and Business Finance Companies, You Too Can Take the IPO On-Ramp

Yes, Consumer, Real Estate, and Business Finance Companies, You Too Can Take the IPO On-Ramp

by Phillip J. Kardis II, Robert K. Smith, and Barry Spatzer

Excerpt:

Just as HOV lanes were created to ease the commuting burden for those who meet certain requirements, the recently enacted Jumpstart Our Business Startups ("JOBS") Act created the "IPO On-Ramp" to ease the burden of becoming and being a public company. To hop on the ramp, all you have to do is meet certain requirements, and unlike HOV lane limitations, the requirements are not very restrictive. You just need to be an "Emerging Growth Company."

In this EIA, we explore what it means to be an "Emerging Growth Company"; the benefits of the "IPO On-Ramp"; and the benefits from the JOBS Act once you become a public company. The JOBS Act, however, does more than just create the "IPO On-Ramp" - it restructures much of the landscape for raising private capital as well. If you would like to learn more about the JOBS Act see the EIA on Capital Raising Alternatives.

What is an "Emerging Growth Company"? Sounds like High-Tech, but it's not

An emerging growth company ("EGC") can be a high-tech company, a consulting company, a finance company (including consumer finance), or a real estate investment trust ("REIT"). An emerging growth company is not defined by its industry, its growth rate, or its prospects, but simply based on the size of its revenues. If your revenues for your most recently completed fiscal year are less than $1 billion, you are an EGC: simple as that. And you remain an EGC (with full benefits) until the earliest of (i) the end of the fiscal year in which your revenues equal or exceed $1 billion; (ii) the end of the fiscal year following the fifth anniversary of your IPO; (iii) the date on which you have issued more than $1 billion in non-convertible debt over the prior three-year period; and (iv) the date on which you become a "large accelerated filer" under the Exchange Act (which means, among other things, your public float is at least $700 million). [footnote omitted]

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This Emerging Issues Analysis was authored by attorneys at K&L Gates LLP. .

Phillip J. Kardis II is a partner at K&L Gates. Mr. Kardis has a broad range of experience in assisting clients with complex corporate, securities and financing transactions, especially transactions involving mortgage REITS and financial assets (such mortgage loans, servicing rights, auto loans, and SBA Loans), including public offerings (debt and equity), private placements, private equity, asset-back secured lending, joint ventures and other investment vehicles, mergers and acquisitions, asset-backed securitizations, going private transactions, REIT conversions, and debt offerings. He has represented several Wall Street investment banks, mortgage and specialty auto finance companies, REITs, broker-dealers and a variety of technology companies. Mr. Kardis also advises companies on compliance with Regulation AB and is a frequent speaker on Regulation AB matters.

Robert K. Smith is of counsel in the firm's Washington, D.C. office. He focuses his practice on corporate and securities matters, including a broad range of capital markets activities (including representing both issuers and underwriters in securities offerings, including IPOs), securities regulatory and compliance advice, corporate governance matters, restatements, merger and acquisition transactions and general corporate matters.

Barry Spatzer focuses his practice on securities offerings, mergers and acquisitions, and other general corporate matters.

This Emerging Issues Analysis is for informational purposes and does not contain or convey legal advice. 2012 K&L Gates LLP, All Rights Reserved.

Comments

Anonymous
Anonymous
  • 10-08-2012

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Anonymous
Anonymous
  • 10-20-2012

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