Category Archives: IPO

Helping Emerging Growth Companies ring the exchange bells throughout 2014

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Two obvious statements:

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1.) 2014 was an exceptional year for Emerging Growth Companies (EGCs)

Right about now, the year-end reports start trickling out, and amongst the many disheartening current events reports – the Capital Markets IPO reports deliver Holiday Cheer. The first out of the gate, even before the ball drops in Times Square, is from PwC’s Deals Practice group.

” IPOs raised a total of $83.9 billion, an increase of 47 percent over the $56.9 billion raised in 2013, and approaching the proceeds of $92.6 billion raised in 2000.

q4-2014-ipo-watch-press-release--value-and-volume-of-ipos-by-quarter

The IPO market moderated slightly in the fourth quarter of 2014 as a volatile mid-October crimped new offerings before regaining ground in November. For the quarter, there were 60 public company debuts, as of December 4, representing $13.4 billion in proceeds.  This compares to 77 public listings in the fourth quarter of 2013 ending December 31, with a value of $24 billion in proceeds.”

It’s important to note that the numbers above only address NYSE and NASDAQ listed IPOs. As we report each week, and summarized here, the OTC Markets helps many companies list – and the largest percentage of EGCs ring that bell.

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2.) Going public is a really big deal for an EGC.

Being a public company is a ridiculously complex undertaking. Certainly, this begins right out of the gate drafting your S-1 registration with us. The volleying of the document with the SEC needs careful tracking – this whitepaper download has a step-by-step illustration to that.

One stress release for EGCs, clients have reported, is filing as a confidential IPO. This eliminates the media and prospective investor scrutiny (banter) that can distract and upset the process. It gives an EGC the elbow room to sculpt the best possible (and transparent) offering for investors – without needless armchair quarterbacks.

CHARTAnother complexity EGCs need to be aware of comes very quickly: their annual report and proxy. The labor around this yearly process was painstaking explained this week on our webinar titled Proxy Materials Logistics 101- a primer for small and micro-cap companies. Your brain will hurt try to comprehend all the steps and details involved with this annual undertaking.

And it goes without saying, once public, all issuers have the Herculean tasks of EDGAR, XBRL and continual shareholder communications.

Bottomline, and probably an third obvious statement, is choose your partners wisely. Absolutely this is a sales pitch to work with us, but the objective point is that all service providers – including Vintage – each have a niche they specifically serve. Match that to your company.

Have a great day.

Top SEC transactions law firms: Q1 – Q3 2014

In plain English, a capital markets transaction is an extremely important contract. For a soon-to-be public company, an S-1 is thee most important contract. However, as discussed last week, (read here) there are many types of transactions – across all three main exchanges: OTC Markets, Nasdaq and NYSE.

Total transactions count for the first two-thirds of 2014 is 1,858… and all of these transactions needed a law firm – if not two or more. In fact, the 1,858  transactions counted listed 450 different law firms. Below is a graph of the top twelve, by transaction count.

We carefully track all capital markets transactions as Vintage executes the drafting sessions for law firms. We have become the intelligent value for transactions: in-house, at a corporate or law office and now more increasing, 100% virtual. You can see an in-house drafting session in this video.

CLICK TO ENLARGE

Top twelve, in order of Q3 ranking. Click to enlarge.

If you are interested in this topic, please click here and opt-in to receive a weekly (Monday) update of transactions and law firms via email.

We also have a whitepaper that explains the ping-pong match an S-1 file plays between an issuer and the SEC. Click here to download it.

Have a great week

Total IPO and SEC transactions: Q1 – Q3 2014

2014 is well-celebrated for the return of IPOs to the capital markets, with 207 IPOs counted by industry watchdog Renaissance Capital.

However, important as they are, IPOs are a small percentage of the year’s success. In fact, these 207 IPO S-1 filings are only NYSE and NASDAQ listed – and less than 27% of the total S-1 filings count of 790.

 

The eight key transactions. Click to enlarge.

Remember, an S-1 is not just for an Initial Public Offering. Public companies submit a Secondary Offering S-1 (and sometimes S-3) file to the SEC anytime they issue new stock for public sale. Post IPO, this S-1 registration is typically to refinance or raise more capital for growth. Click here to download our S-1 workflow whitepaper. 

Total transactions for Q1 – Q3 2014 is 1,858. We carefully track all capital markets transactions as Vintage executes the end-to-end registrations tasks for issuers: typesetting to filings to hardcopy printing. You can see a drafting session in this video.

Transaction types:

  • S-1: General form of registration statement for all companies including face-amount certificate companies
  • S-3: Registration statement for specified transactions by certain issuers
  • S-4 Registration of securities issued in business combination transactions
  • N-2: Initial filing of a registration statement on Form N-2 for closed-end investment companies
  • F-1: Registration statement for securities of certain foreign private issuers
  • S-11: Registration statement for securities to be issued by real estate companies
  • 10-12G: Initial general form for registration of a class of securities pursuant to Section 12(g)
  • 10-12B: Initial general form for registration of a class of securities pursuant to Section 12(b)

A last point is to re-emphasize is that the media (i.e. Jim Cramer shouting and honking horns) tends to focus on the NYSE and NASDAQ IPOs. Hundreds of Emerging Growth Companies and large international companies IPO each year on the OTC Markets. Dig deeper to see growth.

Have a great day.

Boy, when Washington says “JUMP,” EGC IPOs jump!

As reported by the New York Times today…

“Companies have been going public this year at a pace not seen since the dot-com bubble. Investors can thank Washington for that.”

JUMPSTART87% of all U.S.-listed initial public offerings this year are Emerging Growth Companies (EGC).

EGCs are defined (partially) as firms with less than $1 billion in annual revenue. These firms are eligible to file under the Jumpstart Our Business Startups Act. You can read more about ECG JOBS qualifications here.

A very important aspect of the JOBS Act is that companies can file a Confidential IPO – to “test the waters.” After that test they can decide to continue to go public or postpone their IPO till their story or the market is more accepting.

In 2013, 88% of all EGC IPOs were confidential. Of course, there is no measurement of the Confidential IPOs that postpone.

We’ve worked with both Confidential (and traditional) EGC IPOs. The flexibility that the Vintage Transaction Team delivers brought an intelligent value for their (precious) dollars. The expertise that the Vintage Transaction Team delivers makes sure the file is executed correctly.

Download our whitepaper to get an understanding of the IPO process workflow with the SEC.

Have a great day.

Larger companies billed 2.3X for financial printing over Emerging Growth Companies

Not here they aren’t.

The new 2014 IPO Study from Proskauer Rose LLP is a must read for those of us in the capital markets business of working with IPOs. Click here to download the study.

The report examines in great detail:

  • The JOBS Act
  • Financial profiles and accounting disclosures
  • SEC comments and timing
  • Corporate governance
  • IPO expenses
  • Deal structure
  • Lock-ups
  • Sponsor-backed companies

Most relevant to Vintage are 1.) the JOBS Act, and the findings regarding Emerging Growth Companies (EGC) confidential IPOs vs. traditional IPOs and of course 2.) IPO expenses. But I will add a third point, the merging of those two as shown in the Proskauer Rose LLP (with added magnifying glass) chart below.

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Generally, the lionshare of our S-1 work is with EGCs. Our intelligent value fee structure has always appealed to micro and small-cap companies. However, it was enlightening to read exactly how intelligent our value can be. A $400,000 delta (savings) is a lot of intelligent value for any size IPO. It’s over 1/10th of the total cost of the entire IPO process for an EGC.

Click here to download the S-1 workflow illustrated whitepaper.

From the Wall Street Journal:

What Proskauer found was that on average, the reported expense of going public as an emerging growth company was $3.7 million last year, versus $5.9 million for non-EGCs.

This could be partly explained by the fact that non-EGCs tend to be bigger companies.

No, says Proskauer’s Frank Lopez, co-head of the capital markets practice. While he couldn’t pinpoint the reasons, he explained that “larger companies [expenses] can be just as simple, but just generating more money [ROI],” implying that costs should be pretty standard across all deals.

Yes, cost should be standard across all deals. Pinpointing the reasons for financial printing cost control is easy as there are only a few, meaningful variables.

  • Accuracy of typesetting is NOT NOT NOT a variable: the S-1 is either accurate or not. And not is not an option or upgrade.
  • The SEC comments and revisions process can be a variable, but no direct trend was found in the report other than some sectors seem to have more comments than other sectors.
  • Physical printing is a variable, with large high-profile IPOs needing paper, ink and postage.

The last variable to highlight is that many IPOs are handed an “overabundance” of rush charges from rush changes. Vintage clients, fortunately, don’t face that: we have always believed that “rush” is inherent within the S-1 registration process – and not an add-on billable cost. It is the job.

Click here to learn more about our capital markets services.

Have a nice day.

How Vintage became the intelligent value for public companies

The feedback we received from clients, partners and other stakeholders regarding the relaunch of Vintage was affirming. We have become the industry’s intelligent value. Depending on whom you ask here, we’re either the Honda of XBRL, the Target Store of IR services or the Jetblue / Southwest of IPO transactions.

What is intelligent value? For a Vintage client, it’s the flexibility to receive a superior service at the appropriate scale to their business goal. And what is that appropriate scale?  That’s for a client to decide, but generally it is the Venn middle of cost-effective and intrinsic-importance.

VENN

 

Case examples:

An OTC Markets-listed company is a SEC reporting organization. They are doing all they can to be transparent while finding new investors. Unfortunately, the fee quoted for XBRL from an old-school financial printer seems “aggressive” and will drain an inordinate percentage of budget for the size of the issuer – reducing their overall budget for shareholder communications. Wisely, above cost, the issuer is equally concerned about quality and don’t want to switch to an “XBRL garage band” vendor nor a new, untried firm. Our fleXBRL Core solution delivers their intelligent value.

BONUS: They also find additional intelligent value by negotiating a bundle that includes shareholder communications (news distribution and their IR website)  with the XBRL.

A NASDAQ-listed mid-cap is going to issue more shares. They need to draft and file a new S-1 registration with the SEC, but as they have been public for quite a while, the registration is not as “passionate” as their IPO. It’s just paperwork. The S-1 working group is very small and don’t require to meet face-to-face. They don’t need the indulgence of a mahogany conference room. They do need accurate typesetting. A 100% Virtual Transaction delivers intelligent value.

BONUS: Fortunately for them, they are an existing PR Newswire client, which gives them a buying power boost.

Each day, more examples are being created. The bottomline for all these clients (and prospects) is be creative and precise with what you require to receive as intelligent value. Address your business goals. Don’t buy more than you need, but certainly don’t settle for less.

Are we the Kleenex of EDGAR? I can’t answer that really, but we are the #3 largest filer.

Have a great day.

How Investors Consume Content Q#8: Have you ever bought an IPO stock on its first day trading in the market?

Without question, “IPO” has been the capital markets buzz word for investors throughout 2014 —with 70 pricings each in Q1 and Q2. What’s also notable is that the JOBS Act “confidential IPO” process for Emerging Growth Companies (EGC) may be creating a stronger, more stabilized environment.

From Morrison Foerster:

… almost 60% priced within or above the stated price range—this is fairly consistent with the experience of the last several quarters. Perhaps it is too early to assess, but some have speculated that test-the-waters meetings for EGC [confidential] IPOs are providing useful information regarding pricing and that is contributing to more deals pricing within the filing range compared to pre-JOBS Act periods.

So that begged the question – are investors taking advantage of this trend? Yes, up five percent since we asked this question in late summer 2013.

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Click image to enlarge.

What’s our role in this upbeat story? Delivering intelligent value – right from the initial S-1 drafting session to getting the financial brand crisp online.

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Have a great day.