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Upsizing Your IPO - What You Need to Know About 430A - Part 2 of 2

Attorneys at Latham & Watkins LLP


Latham & Watkins Attorneys: Brian G. Cartwright, Alexander F. Cohen, Kirk A. Davenport and Joel H. Trotter

Original Title: Upsizing and Downsizing Your IPO

Read Part 1 Here.

Introduction

Filing Fee Issues -- Securities Act Rules 457 and 462(b)

Rule 457

Although Rule 457 deals with the seemingly mundane issue of the calculation of the registration fee, the choice you make under Rule 457 will have a significant impact on your options at the moment of truth.

Sound off on this buzz in the Comments Section.


Remember that you initially filed your registration statement with a fee table, calculated either:

  • Under Rule 457(o) on the basis of the amount of proceeds the issuer wanted to raise, or
  • Under Rule 457(a) on the basis of the number of shares to be sold and a bona fide estimate of the sale price per share.

    Chances are, you opted to calculate the registration fee for purposes of the fee table under Rule 457(o). You could have used Rule 457(a) instead, but since doing so would let the market know the likely per share price (i.e., maximum deal size divided by the number of shares registered), most deal teams opt to use Rule 457(o).[8] It's unusual in our experience for a deal team to elect to tip its hand about the expected price per share at the time the registration statement is first filed.

    When the time comes to file your price range prospectus, you have a choice: either keep using Rule 457(o), or refile your fee table under Rule 457(a).

    If you choose to refile under Rule 457(a), you will not have to pay more filing fees if your offering price per share later increases -- that's baked right into the text of the Rule. You will, however, be required to pay additional filing fees if you later increase the number of shares to be offered, even if the total offering size (number of shares sold times sale price) does not go above the original estimate used to calculate the original filing fee. The added shares will need to be registered, either on an immediately effective registration statement under Rule 462(b) or via a post-effective amendment -- we discuss below how that is done.

    If you stick with Rule 457(o), you will not have to file a new registration statement and pay additional filing fees if your per share price goes down and you increase the number of shares offered so as to maintain the original aggregate offering price. See C&DI 640.05. You will, however, be required to pay additional filing fees if you keep the same number of shares and increase the per share price (thereby increasing the aggregate deal size).

    Which route is preferable? Refiling under Rule 457(a) allows you to increase the price per share (but not the number of shares) without filing an additional registration statement or post-effective amendment. By contrast, staying with Rule 457(o) allows you to increase the number of shares and decrease the price per share so as to maintain overall deal size, without filing an additional registration statement or post-effective amendment. So it all boils down to whether you think you will be upsizing price only (and leaving the number of shares unchanged) or will be playing with both price and number of shares in order to keep the same total aggregate deal size. Many deal teams elect to switch to Rule 457(a) at the time of printing the price range prospectus, because increasing the price per share at pricing is a more likely outcome than increasing the number of shares and decreasing the price.

    Rule 462(b)

    How do you go about adding additional shares (if you are using Rule 457(a)) or increasing the deal size (if you are using Rule 457(o))? You have two choices -- either file an immediately effective registration statement under Rule 462(b), or file a post-effective amendment and wait for the SEC Staff to declare you effective.[9]

    If you can qualify to use Rule 462(b), that is the better route -- it eliminates the additional step of clearing the post-effective amendment with the SEC Staff.[10] Rule 462(b) is available if:

    • You file the new registration statement prior to the time confirmations are sent, and
    • The increase in price and share count together represent an increase of no more than 20 percent of the previous maximum aggregate offering price (as set forth in the fee table at effectiveness).

      There is a curious wrinkle to how the 20 percent amount is calculated for purposes of Rule 462(b), again depending on whether you refiled your fee table under Rule 457(a) or stayed with Rule 457(o). If you are using Rule 457(a), you multiply the number of additional shares by the new offering price and then look to see whether the increase in deal size associated with the added shares is more or less than 20 percent of the deal size in the fee table at effectiveness -- even though that fee table was calculated at the old price per share. See C&DI 640.03. To take an example, imagine that your fee table at effectiveness reflected 11.5 million shares and a price range of $8-$10 per share, for a maximum aggregate deal size of $115 million. At pricing, the number of shares is increased by 1.5 million and the price is increased to $12 per share. The number of additional shares times the price equals $18 million. Since this is less than 20 percent of $115 million (i.e., $23 million), you could use Rule 462(b) to register the new shares. The fact that the entire deal is actually being upsized by more than 20 percent (since $115 million plus 20 percent equals $138 million, and 13 million shares times $12 per share equals $156 million) is disregarded if you are using Rule 457(a).

      The calculation is done differently if you are staying with Rule 457(o). In that case, you multiply all of the shares being offered (including the additional shares) by the new price per share and then look to see if you have increased total deal size by more than 20 percent. See C&DI 640.04. This makes sense, since Rule 457(o) looks to total deal size. To use our example above, 20 percent of the original maximum deal size equals $23 million. Because 13 million shares are being offered at a new price per share of $12, total deal size would be $156 million, which is more than the original deal size plus 20 percent ($115 million plus $23 million equals $138 million). As a result, you could not use Rule 462(b) to register the additional deal size and would instead have to file a post-effective amendment.

      Some Examples of How It All Fits Together

      Is your head spinning at this point? It should be. Let's start with the following basic facts and then try various upsizing and downsizing scenarios to help illustrate how the rules work:
      • Maximum aggregate deal size in the fee table at effectiveness is $115 million
      • The price range prospectus reflects a range of $8-$10 per share, 10 million firm commitment shares and 1.5 million greenshoe shares, for a total of 11.5 million shares (including the greenshoe)[11]
      • The minimum aggregate deal size in the price range prospectus is $92 million (including the greenshoe), while the maximum aggregate deal size in the price range prospectus is $115 million (including the greenshoe)

        Scenario 1: At pricing, the price is increased to $12 but the number of shares stays the same, for a total aggregate deal size of $138 million (post greenshoe).

        This is within Rule 430A's safe harbor, because the increased price per share (from $10 to $12) when multiplied by the number of shares (10 million plus the 1.5 million greenshoe shares) yields a maximum aggregate deal size ($138 million) that does not exceed the maximum aggregate offering size reflected in the fee table plus 20 percent ($115 million plus $23 million equals $138 million). (You include the greenshoe shares in these calculations, because you need to have registered and paid fees for all securities sold in the offering.) You can ignore the price range prospectus for the moment, since the instruction to Rule 430A(a) says you look to the maximum deal size in the fee table to calculate the 20 percent amount for purposes of upsizing. The fee table will always reflect a total deal size that is greater than or equal to the deal size reflected in the price range prospectus (at least if you used Rule 457(o) to compute the fee table), so you can see why the instruction is the way to go in an upsizing scenario -- you get to calculate the 20 percent off a bigger base and hence get a larger increase.

        Because you are within Rule 430A, the new deal size and share price will be deemed to be part of the Section 11 file at the time the registration statement became effective once the final prospectus is filed under Rule 424(b). The Section 12 file can be handled with an oral statement to accounts at the time of confirming orders to the effect that the price is now $12 per share and the maximum deal size is $138 million (post greenshoe). Ideally, the price range prospectus already disclosed what the proceeds would be used for if the deal raised more cash than originally assumed, so there is no need to elaborate on that point.

        There would be no need to pay additional fees via a Rule 462(b) registration statement if you calculated your filing fee for purposes of the fee table using Rule 457(a), because the number of shares to be sold has not changed -- this, as we pointed out above, is the primary benefit of Rule 457(a). If you calculated your filing fee using Rule 457(o), on the other hand, you would need to register the additional deal size, and this could be done by filing a Rule 462(b) registration statement.[12]

        Scenario 2: At pricing, the price is increased to $14 and the number of shares is increased to 12 million (pre greenshoe) and 13.8 million (including the greenshoe), for a total aggregate deal size of $193.20 million (post greenshoe).

        This is outside the Rule 430A safe harbor, since the new total maximum aggregate deal size ($193.20 million) is more than 20 percent above the maximum deal size reflected in the fee table ($115 million plus $23 million equals $138 million). That's not the end of the story, of course. Remember that C&DI 227.03 permits you to pour this information back into the Section 11 file at the time of effectiveness via a Rule 424(b) prospectus even if your deal size changes by more than the 20 percent safe harbor amount, if the increase in deal size does not materially change the disclosure. You might be able to conclude that the changes were immaterial -- for example, if the sensitivity analysis in the price range prospectus gave investors enough information to track the changes through the disclosure -- but in practice this may not matter since you may still need a post-effective amendment to register the additional deal size (as we explain below).

        Regardless of which approach is taken -- Rule 424(b) prospectus or post-effective amendment -- the Section 12 file will also need to be addressed. This can be done either with an oral statement to accounts at the time of confirming orders or by distributing a Rule 433 free writing prospectus prior to confirming orders to those expected to purchase shares. The decision whether to convey the new information orally or in writing (via a free writing prospectus) will depend on the complexity of the changes.

        Finally, don't forget that you would need to register additional shares and pay additional fees, whether you used Rule 457(a) (since the number of shares being registered has increased) or Rule 457(o) (as a result of the increase in transaction size). On our facts, if you refiled under Rule 457(a) at the time of printing the price range prospectus you would not be able to register the additional shares via an immediately effective Rule 462(b) registration statement, because the additional number of shares (2.3 million) multiplied by the new price per share ($14) equals $32.20 million, which is more than 20 percent of the maximum offering price at effectiveness ($23 million). Similarly, if you used Rule 457(o) you would have to file a post-effective amendment, since the increase in total deal size (from $115 million to $193.20 million) is greater than 20 percent. In both cases, you would have to wait for the SEC Staff to declare your post-effective amendment effective before any sales are confirmed.

        Scenario 3: At pricing, the price is decreased to $6 but the number of shares stays the same, for a total aggregate deal size of $69 million (post greenshoe).

        At first glance, this might appear to be outside the Rule 430A safe harbor since the new total maximum aggregate deal size ($69 million) is less than the maximum deal size reflected in the fee table minus 20 percent ($115 million minusi $23 million equals $92 million). But remember C&DI 627.01, which allows you to focus on the price range in the price range prospectus rather than the amount reflected in the fee table. Following C&DI 627.01, you would calculate the 20 percent threshold by using the high end of the range (20 percent of $115 million equals $23 million) and then deducting that amount from the low end of the range ($92 million). This approach ($92 million minus $23 million) lets you reduce the deal to $69 million with the greenshoe, and gives you maximum flexibility. C&DI 627.01 is your best choice in a downsizing scenario -- you get to decrease deal size beyond the level that the instruction to Rule 430A(a) would otherwise allow. The decreased pricing information can be included in a Rule 424(b) prospectus and will be deemed to be part of the Section 11 file at effectiveness.

        The Section 12 file issues may well be more interesting in this example, depending in part on whether the disclosure in the price range prospectus included sensitivity analysis explaining what the issuer would do if the deal got downsized to such an extent. If it did, an oral explanation of the smaller deal size may be sufficient to provide investors with the missing information. If not, particularly if the use of proceeds will need to change, a free writing prospectus summarizing the changes may be advisable.

        Because there is no increase in aggregate deal size or number of shares being offered, there is no need to pay additional fees or file a Rule 462(b) registration statement. In fact, the question whether additional filing fees are due never comes up in a downsizing scenario.

        Scenario 4: At pricing, the price is decreased to $4 but the number of shares is increased, for a total aggregate deal size of $69 million (post greenshoe).

        The answer to this scenario is the same as scenario 3, since both yield a minimum deal size of $69 million. In other words, the aggregate size of the deal did not decrease by more than 20 percent (calculated using the C&DI 627.01 methodology) because of the increase in the number of shares to be sold. We believe that the SEC Staff would consider this scenario to be within Rule 430A, notwithstanding the steep decrease in the per share price (from $8 to $4).[13]

        Some Additional Things to Bear in Mind

        Negative Assurance Letter Practice

        Negative assurance letter practice among law firms changed following the adoption of the Securities Act reforms in 2005, particularly because of Rule 159's focus on the information in investors' hands at the time of pricing. Negative assurance letters now cover three important items:
        • The registration statement as of its effective date, as measured against the requirements of Section 11 of the Securities Act
        • The final prospectus, as of its date and as of the closing date, as measured against the requirements of Section 12 of the Securities Act, and
        • The "Pricing Time Disclosure Package" as of the time the underwriters commence to confirm orders, as measured against the requirements of Section 12 of the Securities Act.

          This last bullet point was added to address Rule 159. It requires the negative assurance provided by the issuer's and the underwriters' law firms to speak to the collection of information conveyed to prospective purchasers at the time the underwriters begin to confirm orders. The magic of Rule 430A and its permission to go back in time to rewrite history is critical for the negative assurance given in the first bullet point above, which relates to the Section 11 file, but it is of no use for purposes of the third bullet point, which relates to the Section 12 file.

          The way to satisfy Rule 159 is to actually convey information to accounts. In the context of a deal that is being upsized or downsized at the last minute, conveying information -- or even preparing the information so that it can be conveyed -- may not be easy to do in a timely manner. As a result, the deal team will be under pressure to make important materiality judgments on a real-time basis.

          FINRA Issues

          IPOs are subject to FINRA Rule 5110 (sometimes referred to as the Corporate Financing Rule). The underwriters of your IPO will be FINRA members, and the Corporate Financing Rule will limit the amount of compensation they (and other distribution participants for that matter) may receive in connection with the IPO. The Corporate Financing Rule also prohibits certain practices that FINRA has determined to be "unfair or unreasonable" and contains filing and disclosure requirements.[14]

          If the type of compensation going to the underwriting group consists only of the "spread" (i.e., the discount off the public offering price), the upsizing or downsizing of an IPO should not trigger additional issues under Rule 5110. However, Rule 5110 includes many other "items of value" received by the underwriters around the time of the IPO in the calculation of aggregate underwriting compensation. If aggregate underwriting compensation exceeds a certain percentage of the total offering proceeds, the underwriters may need to obtain the FINRA "no objections" opinion required by the SEC in order for the registration statement to be declared effective. A change in the size of your deal could potentially change the total underwriting compensation as a percentage of deal proceeds in a manner that would require a visit to FINRA. In practice, that may be difficult to achieve under the timing pressure that always exists at the moment of truth.

          FINRA Rule 2720 contains additional requirements that apply to public offerings in which a participating FINRA member is deemed to have a "conflict of interest" (i.e., an interest in the outcome of the offering beyond its role as an underwriter or selling group member). The rule provides that a conflict of interest exists whenever five percent or more of the net offering proceeds will be directed to a FINRA member or its affiliates or other "related persons." Accordingly, if an offering is downsized, you will need to re-assess whether the conflict of interest provisions of Rule 2720 are triggered. Among other things, Rule 2720 will generally require the participation of a FINRA-approved "qualified independent underwriter" and inclusion of prominent disclosure as to the nature of the conflict in the prospectus.

          NYSE/Nasdaq Issues

          Both the NYSE and the Nasdaq's listing rules exempt "controlled companies" -- that is, companies of which more than 50 percent of the voting power is held by an individual, a group or another company -- from certain listing requirements relating to corporate governance. For example, controlled companies are exempt from the requirement to have a board composed of a majority of independent directors. When you are doing an IPO for a controlled company, you should keep an eye out for the potential effect of selling more shares on the controlled company analysis -- if your deal is upsized at the moment of truth, it's possible that the company will not longer be "controlled" for purposes of this exemption.

          Tying It All Together

          So how does all of this fit together, you ask? Simple, really. The underwriters and the issuer should start the dialogue about how the market is reacting to the deal while the road show is progressing. These are the types of questions that may come up:

          • Is there sufficient demand for the stock within the suggested range?
          • If not, is it possible to get a smaller deal done within the range or may we need to reduce the deal's size and the per share price?
          • If the size of the deal decreases, will the use of proceeds need to change?
          • Is there sufficient excess demand that we can increase the price to a price that is above the top end of the range?
          • Can we increase the price above the range and increase the number of shares being offered?
          • If the deal size increases, what will the extra proceeds be used for?
          • What did we say in the price range prospectus sent to investors about what would happen to our use of proceeds if the deal were to be upsized or downsized?

            It is important to get this dialogue going long before it is time to price the deal so the deal team can plan for every possible outcome. Bear in mind that:

            • A free writing prospectus reflecting new disclosures may need to be drafted and circulated to prospective investors expected to purchase stock in the offering before orders can be confirmed, or a telephone script for the conversation with those investors may need to be prepared
            • A final prospectus containing appropriate disclosure must in any event be drafted and filed under Rule 424(b)
            • The accountants' comfort letters may need to change to reflect the revised disclosure
            • A Rule 462(b) registration statement to register additional shares or transaction size may need to be prepared, and extra filing fees may need to be paid
            • A Rule 462(d) post-effective amendment to add a new Exhibit 5.1 opinion covering additional shares may need to be drafted and filed
            • If there are other changes that do not qualify as pricing information within the meaning of Rule 430A or if Rule 430A's 20 percent safe harbor is not available, a post-effective amendment to the registration statement may need to be prepared and filed, and the SEC Staff must declare it effective, and
            • In the most extreme cases, an entirely new price range prospectus must be drafted and recirculated to all investors expecting to purchase stock in the offering.

              All these steps take time. There is no substitute for advance planning, which comes in two phases -- before and during/after the road show. Before the road show, it is very handy if the price range prospectus is drafted to include appropriate sensitivity analysis along the lines discussed above. Good advance planning and carefully crafted disclosure in the price range prospectus may make it possible to conclude that a change in deal size is not a material change in the disclosure, taken as a whole. During and after the road show, as soon as it becomes clear that an upsizing or downsizing is even a possibility, the deal team should be reviewing the options under the rules described above and preparing revised disclosure, free writing prospectuses, telephone scripts, etc., as needed.

              Timing is critical and there is little margin for error. Be prepared!

              Summary

              This is tricky stuff. However, with appropriate advance planning and carefully crafted disclosure in the price range prospectus, it is possible to navigate the many technical requirements and focus on the judgment calls. What is a material change to the disclosure depends in part on what was disclosed in the first instance, so the advance planning really begins at the first drafting session. Those who are thinking ahead to pricing from the very beginning will have an easier time when they get there, even if the deal changes materially at the moment of truth.


              Brian G. Cartwright, Senior Advisor, brian.cartwright@lw.com

              Brian G. Cartwright is Senior Advisor to Latham & Watkins LLP and has offices with the firm in both Los Angeles and Washington D.C. He is also a Fellow of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University.

              Mr. Cartwright served as General Counsel of the US Securities and Exchange Commission from 2006 to 2009, following a 23-year career at Latham & Watkins. As SEC General Counsel, he was responsible for counseling the Commission on all matters brought before it, including all enforcement actions and all rulemakings. Mr. Cartwright also supervised all cases litigated by the SEC in the United States Courts of Appeals and advised on all adjudications appealed to the Commission. During his service at the SEC, Mr. Cartwright also served as a senior advisor to the Chairman and other Commissioners and helped shape the Commission's major policy and regulatory initiatives.

              Alexander F. Cohen, Partner, alex.cohen@lw.com

              Alex Cohen is a corporate partner in the Washington, D.C. office of Latham & Watkins and co-chair of the firm's Capital Markets Practice Group. His practice focuses on a broad range of US securities regulation and enforcement matters.

              Mr. Cohen is a former senior official of the US Securities and Exchange Commission. He joined the SEC staff in 2006 as Deputy General Counsel for Legal Policy and Administrative Practice and later served as Deputy Chief of Staff. As Deputy Chief of Staff and senior legal counsel in the Chairman's Office, Mr. Cohen advised the SEC Chairman on highly sensitive questions across all aspects of the agency's work, including the SEC's response to the 2008 financial crisis. He also served as the Chairman's liaison to Commissioners and senior agency staff in connection with rulemaking, enforcement matters and special projects.

              Kirk A. Davenport, Partner, kirk.davenport@lw.com

              Kirk A. Davenport is the Co-Chair of the firm's global Capital Markets practice group and a member of the firm's Executive Committee. He has practiced law since 1984 and joined the firm in 1985. His practice centers around capital markets, mergers and acquisitions and general securities and corporate matters. His clients include domestic and foreign investment banks, New York Stock Exchange listed companies, foreign corporations, leveraged buy-out funds and mezzanine investment funds.

              Mr. Davenport has represented underwriters, placement agents, initial purchasers and issuers in public and private high yield, convertible note and equity offerings of all kinds in a broad array of industries. He was instrumental in developing the firm's high yield and Rule 144A forms and in the development of commitment letter forms for bridge loan financings. Mr. Davenport has also represented broker-dealers in all manner of other engagements, including dealer manager and consent solicitation agent engagements, and has represented issuers and broker-dealers in tender and exchange offer transactions, both domestically and abroad, as well as prepackaged bankruptcy solicitations. He has also participated in public and private financings for independent power producers and other project sponsors. In the lending arena, he has represented senior and mezzanine lenders in acquisition financings. Mr. Davenport's practice also includes merger and acquisition transactions, representing buyers and sellers in both public and private transactions.

              Joel H. Trotter, Partner, joel.trotter@lw.com

              Joel Trotter is the Deputy Chair of the Corporate Department in the Washington, D.C. office. His practice focuses on corporate finance, mergers and acquisitions, securities regulation and general corporate matters. Mr. Trotter represents major New York Stock Exchange listed companies and counsels both issuers and underwriters in the public offering process and in corporate compliance matters involving SEC reporting and disclosure requirements. He also serves as special counsel for boards of directors, audit committees and special committees on governance issues, corporate crises and business combination proposals.

              Mr. Trotter is the co-author of the chapters of The Practitioner's Guide to the Sarbanes-Oxley Act (American Bar Association) on "Disclosure of Internal Control over Financial Reporting" and "Corporate Internal Investigations after Sarbanes-Oxley" and is a contributor to Securities Law Techniques (Matthew Bender). He has also published articles on securities law issues in Insights and The Corporate Governance Advisor and has authored Client Alerts on topics including the SEC's securities offering reform rules and financial statement requirements for securities offerings.

              Latham & Watkins LLP

              With approximately 2,000 attorneys in 30 offices around the world, Latham & Watkins is a global firm with internationally recognized practices in a wide spectrum of transactional, litigation, corporate and regulatory areas. Representing private companies, publicly traded multinationals, private equity firms, sovereign wealth funds and investment banks, the firm's corporate practice offers transactional clients vast resources across a network of offices around the globe.

              [8] There is a technical reason why it is generally preferable to chose Rule 457(o) at the outset. The SEC Staff informally takes the position that if you raise your price range in a preliminary prospectus contained in a pre-effective amendment from the range used to calculate the filing fee and you originally elected to proceed under Rule 457(a), then the 20 percent safe harbor contemplated by the instruction to paragraph (a) of Rule 430A is calculated on the basis of the original maximum aggregate offering price and not the offering price range contained in the price range prospectus distributed to investors. This qualification can be eliminated if you "voluntarily" pay an additional filing fee when you increase your offering range, but doing so defeats the primary benefit of Rule 457(a) (i.e., you do not need to go back to the SEC if you increase your estimated price per share). This SEC Staff position can be a trap for the unwary issuer who elected to use Rule 457(a) originally to calculate the filing fee and later seeks to upsize. There is no such hidden problem for users of Rule 457(o), as they are required to pay additional filing fees at the time they upsize their deal, and they know it.

              [9] Whichever route is chosen, you will also need to remember to include a new Exhibit 5.1 opinion on the legality of the additional securities being registered. This can be done by means of an immediately effective post-effective amendment under Rule 462(d).

              [10] Note, by the way, that Rule 462(b) works for an increase in transaction size in a Rule 457(o) deal, even though the text of Rule 462(b) speaks only of "registering additional securities." See C&DI 640.04.

              [11] The "greenshoe" is jargon for the underwriters' over-allotment option -- that is, the contractual right to purchase some number of additional shares from the issuer after the closing of the offering. "It is so named because it was first used in connection with a 1963 secondary offering of shares of common stock of The Green Shoe Manufacturing Company, the Boston-based manufacturer of Stride-Rite shoes (not green shoes for leprechauns as some have supposed)." Charles J. Johnson, Jr. and Joseph McLaughlin, Corporate Finance and the Securities Laws at 2-38 (4th ed. 2009).

              [12] When calculating the increase in deal size for Rule 462(b) purposes, do not overlook the underwriters' overallotment option - you will need to register a sufficient number of shares (and pay enough fees) to cover both the primary as well as any option shares to be sold in the IPO.

              [13] Having said that, you would need to be comfortable that the price range in the price range prospectus circulated to investors (and included in the registration statement at the time of effectiveness) was in fact a "bona fide" price range as required by Regulation S-K Item 501(b)(3).

              [14] Among other things, the Corporate Finance Rule limits the greenshoe to 15 percent of the amount of securities being offered in the IPO (excluding the greenshoe). See FINRA Rule 5110(f)(2)(J).

              Material in this work is for general educational purposes only, and should not be construed as legal advice or legal opinion on any specific facts or circumstances. For legal advice, please consult your personal lawyer or other appropriate professional. Reproduced with permission from Latham & Watkins LLP.