Underwriting or Commissions Expense Listed in Registration Statement Part II

Item 511 of Regulation S-K requires the issuer to furnish a reasonably itemized statement of all expenses in connection with the issuance and distribution of the securities to be registered, other than underwriting discounts and commissions.  The General Instructions of registration statement Form S-1 instructs registrants to furnish the information required by Item 511 in Part II, Item 13 (Other Expenses of Issuance and Distribution).

Although the Item 511 requirement explicitly excludes underwriting expenses from mandatory disclosure, and the blank Form S-1 reserves Part II for disclosure of information not required in the prospectus (which constitutes the Part I disclosure), recent filers have included underwriting or commission expenses in the list of fees found in Item 13.  It might be that SEC comment letters called for this disclosure, but any comment letters for the offers discussed below are not yet publically available. 

NGL Energy Partners LP went public on May 12 and began trading on the NYSE (ticker: NGL).  The initial Form S-1 for the offering was filed February 11 (SEC file no. 333-172186), but it was not until Amendment No. 3 on April 28 that NGL disclosed a structuring fee equal to 0.5% of the gross proceeds payable to Wells Fargo Securities, LLC, one of the joint book-running managers for the deal.  Such disclosure was made as a footnote regarding underwriting discounts and commissions on the red-herring prospectus cover page and reference is made to it in Use of Proceeds discussions in Part I.  That is not unusual, but what is unusual is that this fee is quantified ($350,000) and listed as an expense in Part II, Item 13.

Other recent registrants report offering expenses on the prospectus cover page and in other Part I disclosures, but take the further step of quantifying the dollar amount and listing it in Item 13.  Juhl Wind, Inc. has registered $15M of common stock on a shelf basis and estimates up to $875,000 payable as commissions or discounts for a best efforts offering (file no. 333-173791).  On May 13, Vanguard Energy Corporation registered 7,000,000 units for an IPO (333-174194).  Vanguard has agreed to pay Paulson Investment Company, Inc., the representative of the underwriters, a non-accountable expense allowance equal to 3% of the total public offering price, and includes the $283,500 expense allowance with the other expenses of issuance and distribution listed in Part II.