In order to rely on this instruction to make an offer, the corporation cannot be a shell corporation and must not have been a shell corporation for at least 12 calendar months prior to using Form S-3. In addition, if the company was previously a shell company at any given time, it must have filed with the SEC at least 12 calendar months prior to the current information on Form 10 that reflects its status as a non-shell corporation. 4 Failure to file a Form 8-K in a timely manner under the following does not affect a company`s eligibility for Form S-3: The SEC`s Form S-3 is sometimes filed after an initial public offering (IPO) and is generally filed at the same time as common shares or preferred shares. An entity authorized to use Form S-3 for primary offerings pursuant to Section 1.B.1 may use Form S-3 to record the offer and sale of an immediately convertible security and the underlying security. The fact that subsequent conversions may occur at a time when the Company does not comply with the transaction requirements for the conversions described below would not affect the initial recording of the offering of the underlying securities. If it becomes necessary to update the registration statement, the Company may only update by incorporation by reference or subsequent amendment if it meets the requirements for use of the form at that time. Form S-3 is a simplified securities and exchange form that registers corporate securities. To use Form S-3, certain criteria must be met.11 min read To maintain eligibility for Form S-3 after a late filing, you may also apply for an exemption from the eligibility criteria of Form S-3. While these are only granted in certain circumstances, it`s still an option and it`s something you should discuss with an SEC official. Note that this policy may change as the SEC maintains SEC.gov to ensure that the site works efficiently and remains available to all users. Form S-3 is an abbreviated registration statement consisting primarily of information about the transaction in question. Only certain eligible issuers may list an offering of securities on Form S-3 after its initial public offering. Not all publicly traded companies can list securities on Form S-3, even if the issuer is subject to SEC reporting requirements.
If your forms are selected for a full review by SEC staff, you will receive a comment letter from SEC staff approximately thirty days after filing. You will then have to answer all the questions asked by the SEC. If you are notified by the SEC that your company registration statement has not been selected for review, it will take effect within a few days. The ability to use an S-3 registration statement is important for publicly traded companies. An S-3 allows incorporation by reference and can be used, among other things, for shelf recording. The S-3 authorization includes both registrant or business requirements and transaction requirements. In this blog, I will discuss the general business and transaction requirements for a Form S-3. In a separate blog, I will discuss shelving offers. Additional sections that must be included in Form S-3 include, depending on the type of company issuing and the type of securities issued, disclosure of the income to fixed cost ratio, distribution plan and full description of the securities that will be registered. Form S-3 follows a streamlined process.
Form S-1 filings, on the other hand, are used as initial registration for new securities issued by public companies in the United States. The deposit must be completed before the shares can be traded on a national exchange. Most companies file Form S-1 before making it public. A company must meet this eligibility criterion each time it submits an update to the registration statement. Therefore, if the market value decreases between updates, a company should upgrade to an S-1 (or any other form it qualifies for) when submitting an update. Because Form S-3 contains Exchange Act reports by reference, filing a Form 10-K is equivalent to filing a subsequent amendment. This means that if the company is not permitted to use Form S-3 at the time of filing its Form 10-K, it would be required to file a subsequent amendment to the other form that would be available at that time. However, a corporation may use the same Form S-3 (as updated and amended by subsequent reports under the Foreign Exchange Act or after amendments in force) to switch from a baby shelf to a full shelf based on changes in the market value of voting and non-voting share capital held by non-affiliated corporations.
While many investors want companies to use S-3 forms for simplicity and speed, there are a few things that need to be negotiated beforehand between companies and investors. If a business is not authorized to use Form S-3, registered bids must be made in cash on the appropriate registration statement form, usually Form S-1, if your company has a valid registration statement. To use Form S-3 for securities, your company must meet certain requirements: Because a Form 8-K reported only in Item 2.02 (Results of Operations and Financial Condition) or Item 7.01 (Regulatory FD Disclosure) is “filed” and not “filed” with the SEC, a late report under these items also does not affect eligibility for Form S-3. Submissions under Section 8.01 (Other Events) are optional and are not subject to the four-business day period. See Policy I.A.3(b) on Form S-3 and SEC Employee Compliance and Disclosure Interpretations (C&DI) Questions 115.07 and 126.12 for Securities Act forms. In most cases, Form S-3 also includes information on the expertise of the issuer`s accountants and advisers who offer validation of the securities offered for sale. This type of request must be made by the Company via a publicly accessible CORRESP repository. It should be addressed to the SEC, Office of Information Technology, Division of Corporation Finance. There are a variety of other requirements that must be met in order for a business to file Form S-3.
In the 12 months prior to filling, a corporation must have met all debt and dividend requirements. The SEC Act of 1933 also requires these forms to be filed to ensure that material facts about the company are disclosed when the company registers securities. This allows the SEC to provide investors with details of the securities offered and to work to prevent fraudulent sales of those securities. Depending on the amount of securities to be issued in a stock line transaction, a company that meets the eligibility criteria could use a Form S-3 to record the sales shares as a primary indirect offer (Note 1.B.1), baby shelf offer (Instruction 1.B.6) or secondary offer (Instruction 1.B.4).