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September 25, 2023

“Emerging Growth Company” Manchester United Ltd. Not Quite Ready to Take Advantage of All the Reporting Exemptions Under the JOBS Act

As you know, the Jumpstart Our Business Startups Act was made law earlier this year, in part, to exempt "emerging growth companies" (or "EGC" for you acronym junkies) from certain reporting and disclosure requirements. "Emerging growth companies" being those with less than $1 billion in revenues in a fiscal year and the best known exemption allowed to these EGCs is the requirement for an independent auditor to assess the company's internal controls over financial reporting.  

For the international sports enthusiasts out there, you're probably aware that the Premier League's Manchester United are filing an IPO to be listed on the New York Stock Exchange and their prospectus (and its subsequent amendments and other filings) are available for your viewing pleasure. If you want a quick rundown of the most interesting highlights, you can check out Michael Bertin's special to ESPN but we'll call attention to part of the filing that is most relevant here and this is the Club (that was founded in 1878) considers itself – YEP! – an emerging growth company under the JOBS Act.

That means they get access to all the exemption goodies but oddly, they aren't quite ready to do that. From the F-1:

We have not taken advantage of any of these reduced reporting burdens in this prospectus, although we may choose to do so in future filings and if we do, the information that we provide shareholders may be different than you might get from other public companies in which you hold equity.

And sure enough, they admit later that, yeah, we'll be excusing ourselves from these at some point:

[W]e intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). 

Okay, maybe that lack of assurance won't sit well with investors but hey, at least they didn't use as their "agent of service."

F-1 [SEC via ESPN]

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