© 2013 Morgan, Lewis & Bockius LLPwww.morganlewis.com© 2012 Morgan, Lewis & Bockius LLP

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2013: Rock ‘N Roll Transforms Corporate Finance

Charles EngrosMorgan, Lewis & Bockius LLP

2013 JEGI Media & Technology ConferenceJanuary 17, 2013

© 2013 Morgan, Lewis & Bockius LLP 2

© 2013 Chris Belsito

© 2013 Morgan, Lewis & Bockius LLP

The JOBS Act

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Jumpstart Our BusinessStartups Act

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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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