Registration Statements

What it is

These are documents filed by prospective private companies that are seeking to proceed with an initial public offering (IPO) to get listed on a public exchange and offer shares to the public. The documents include the prospectus, which is the selling document that includes information about the business operations as well as the legal offering of shares.

How to Read a Registration Statement

Form S-1 is a comprehensive prospectus report filed with the SEC that provides insights into the business for investors to review. It contains the following information: business summary, risk factors, management and compensation, stock offering, use of proceeds and management’s discussion and analysis of financial condition and results of operations.

Things to Look Out For

Just like reading an annual report, investors should read through the S-1 document very closely, especially if they are participating in the IPO. Investors should compare financials to publicly traded industry peers as well as determine if there is a powerful sector theme in play. Make note of any misstatements as these can incur liability on the persons who signed off on the registration statement and the underwriters, which could delay or even derail the IPO.