Last week, a few conversational planets aligned here on the topic of a company’s self-filing of their IPO. To be exact, in this blog post, the definition of self-filing is the use of a DIY XBRL platform (what our fleXBRL offers- click here) to create and work an S-1 file completely through to final public offering.
If you are not familiar with the workflow of an S-1 with the SEC, this whitepaper – click here – will guide you to understand. We execute hundreds of transactions each year.
One conversation came about in context to our being a NYSE-approved provider of shareholder communications services to their IPOs. The question arose… should we / could we help a soon-to-be-NYSE company DIY their S-1 as they can with their quarterly XBRL? Fair question, but to date, no one had worked in our fleXBRL program for an S-1. Why would they? Regardless, we needed an example.
The next task was to identify any S-1 that self-filed via an XBRL portal. (This identification can be done by researching the publicly filed SEC records.) A single, recent example was brought to my attention, however as it was not our account, the details of the workflow are backwards forensics from the public record.
The conversation next went to why was the openly published S-1 filing fee to the client so high for a DIY portal? What also stood out was that the price was too high even for a traditional S-1: almost twice what we generally bill a micro/small-cap company for full service IPO drafting and registration.
The forensics tell a story: I have changed all identifiers.
|July 22, 2013||Form D||Law Firm|
|Sept 10, 2013||S-1||Corporation themselves via DIY portal|
|Sept 15, 2013||S-1/A||Corporation themselves via DIY portal|
|Sept 24, 2013||S-1/A||Corporation themselves via DIY portal|
|Oct 4, 2013||S-1/A||Traditional S-1 filing provider|
|Oct 8, 2013||8-A12B||Corporation themselves via DIY portal|
|Oct 11, 2013||S-1/A||Traditional S-1 filing provider|
|Oct 12, 2013||FWP||Traditional S-1 filing provider|
|Oct 13, 2013||CERTNAS||(SEC posting)|
|Oct 13, 2013||S-1MEF||Traditional S-1 filing provider|
|Oct 14, 2013||EFFECT||(SEC posting)|
|Oct 14, 2013||424B1||Traditional S-1 filing provider|
|Oct 19, 2013||8-K||Corporation themselves via DIY portal|
It seems they started the S-1 themselves, but after two amendments, called in “a pro.”
Why the October 4th switch to a traditional S-1 filing provider – like Vintage Filings? Another “SEC Filings CSI” data point we uncovered is the company filed as a JOBS Act Confidential IPO.
Our professional speculation is that once the company publicly declared their intent to IPO on Oct 4th, their Confidential IPO 21-day disclosure window came into play. Safe to assume that the added burden, public scrutiny and needed attention to detail – plus perhaps pressure from their banks and lawyers – advocated the issuers’ management team hand-off the S-1 to an experienced filer. Going public is VERY stressful…senior executives need to focus on the business, not on typesetting.
AKA: Brides should not bake their own wedding cake. (this video demonstrates what a drafting session looks like – phew)
Fiscal forensics: The S-1 file hand-off may have caused the dramatic fee increase. The company paid for both DIY and traditional service. Even if Vintage Filings was given the hand-off, we’d also have to re-key the entire S-1 into our filing (typesetting/editing/filing) workflow platform. In this exact case, had the company worked with us from the initial S-1 to pricing, they would have cut their costs in half and more importantly, not burned their valuable time.
XBRL portals are excellent for filing XBRL. XBRL portals are especially excellent for companies who have in-house accounting experts. We have dozens of clients who work as such via our fleXBRL. We also have clients who prefer (need) full service.
Our view? Don’t self-file an S-1. Too many steps. Too many cooks. If you are organized, the cost can be very contained. At least with Vintage Fillings.
Have a great day.