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© 2013 Morgan, Lewis & Bockius LLPwww.morganlewis.com© 2012 Morgan, Lewis & Bockius LLP
www.morganlewis.com
2013: Rock ‘N Roll Transforms Corporate Finance
Charles EngrosMorgan, Lewis & Bockius LLP
2013 JEGI Media & Technology ConferenceJanuary 17, 2013
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© 2013 Chris Belsito
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© 2013 Morgan, Lewis & Bockius LLP
The JOBS Act
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Jumpstart Our BusinessStartups Act
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© 2013 Morgan, Lewis & Bockius LLP
Crowdfunding• Pending SEC Rules• $1 million limit in 12 months• Investors with Annual Income or Net Worth
– Less than $100,000: $2,000 or 5% of income or net worth
– Equal to or more than $100,000: 10% of income or net worth up to $100,000
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© 2013 Morgan, Lewis & Bockius LLP
Emerging Growth Companies
• Annual Gross Revenue Under $1 billion
• Until 5th Anniversary of IPO
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An Easier Path for Emerging Growth Companies• Less Extensive Disclosure Requirements
• Two Years of Audited Financial Statements
• Exemption from New Accounting Standards
• Testing the Water Permitted
• Confidential SEC Review of IPO Registration Statement
• No Filing Fee for Draft Registration Statement
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© 2013 Morgan, Lewis & Bockius LLP
Other JOBS Act Changes
• General Solicitations in Private Placements– Purchasers must still be accredited investors
• Super Regulation A– $50 million in 12 months
• Securities Exchange Act Registration (§12 (g))– $10 million of assets– 2,000 equity class holders or 500 non-accredited investors– Crowdfunding securities exempted
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© 2013 Morgan, Lewis & Bockius LLP
The JOBS Act Changes M&A
• Sale/IPO Dual Track– Tilting the Playing Field
• Additional Complexities in Acquisitions– Basic Deal Structure
– Public Company Precedents Even More Relevant
– Written Consents by Majority Shareholders
– Increased Litigation Risk
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© 2013 Morgan, Lewis & Bockius LLP
Other News from 2012:Do We Have a Deal or Don’t We?
• Accidental Standstills
• Don’t Ask, Don’t Waive– Force Best Foot Forward
– Forestalling Alternatives
• Disclaimers and Fraud
• Focus on Advisers – the Del Monte Legacy– El Paso and Kinder Morgan
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