Public companies that engage in capital raising activities from time to time must consider whether it is advisable to have an effective shelf registration statement on Form S-3 on file in advance of raising capital, or whether to simply wait to file a Form S-3 until such time that the company desires to raise capital.

Background

As background, shelf registration statements may be utilized by public companies eligible to use Form S-3 (which generally requires, among other things, that an issuer have at least $75 million in non-affiliate common equity public float and have filed all required SEC reports over the last 12 months), to register the issuance of various classes of the company’s securities on a delayed or continuous basis, to be issued in public offerings from time to time, either by the issuer or selling security holders.  At the time of an offering, these securities are then sold in a “take down” off the shelf utilizing a prospectus supplement describing (among other things) the terms of the offering and incorporating by reference information about the issuer.  Shelf registration statements generally only remain effective for three years.

Continue Reading Form S-3: To File or Not to File, That is the Question . . .

I recently presented to the Corporate & Securities Law Committee of the Association of Corporate Counsel (ACC) on the topic entitled “Behind the SEC Curtain: Practical Tips for Interacting with the SEC Staff.

The presentation offered practical tips from me, a former SEC staffer, on the following topics:

  • How to interact with the SEC staff
  • The screening and review process for registration statements
  • Periodic reports and proxies
  • Recent areas of focus
  • Current developments at the Commission and staff

I appreciated the positive feedback on the presentation and have posted the PowerPoint for our readers’ benefit.

Click to view the presentation.

Recently, the house panel approved to raise the Reg A+ IPO limit to $75 million designed to bolster capital-raising efforts. The “moving up [to $75 million] could have a positive impact for smaller companies because it may attract some of the more traditional underwriters to the process. By attracting more sophisticated parties to the transaction, that could help facilitate raising capital.”

The full article, “House Panel Approves Bill Lifting Reg A+ IPO Limit To $75M,” was published by Law360 on November 16, 2017, and is available online.

Now that the SEC’s new rules on exhibit hyperlinks are live as of September 1, 2017, we have updated our March blog post with the frequently asked question below regarding exhibit indexes.

Where should we put the exhibit index now? Can we combine the list of exhibits and the exhibit index?

In connection with the SEC’s March 2017 amendments implementing the hyperlink requirement, the SEC also amended the rules pertaining to the placement of the exhibit index, which had previously required the exhibit index to “precede immediately the exhibits filed with such registration statement.” As amended, Rule 102(d) of Regulation S-T and Rule 601(a)(2) of Regulation S-K now require the exhibit index to “appear before the required signatures in the registrant statement or report.” Although exhibit index practice has varied, there is some ambiguity as to whether the new rules require a separate exhibit index before the signature page and the exhibits themselves. For example, while some companies are combining the exhibit table with the exhibit index and placing the latter before the signature page, others have been retaining a separate exhibit table and exhibit index and move the latter above the signatures.

As a result of this ambiguity and variance in practice, we reached out to the SEC staff to get interpretive guidance on how the list of exhibits (including the exhibit index) should now be presented in registration statements and reports. According to the SEC Staff in the Office of Chief Counsel, it is permissible to combine the exhibit table with the exhibit index and only present one list of exhibits with hyperlinks, and a separate exhibit index is not required. I think this is a good, practicable outcome and should dispense with the notion of having two lists of exhibits.

Click here to view an example of the approach applied on an 8-K.

If you have other questions about the SEC rules on exhibit hyperlinks, please contact me or another member of our Corporate & Securities Practice Group.

FAQs ABOUT REGULATION A+ SECURITIES OFFERINGSIt seems that lately there has been a noticeable uptick in Regulation A+ activity, including several recent Reg A+ securities offerings where the stock now successfully trades on national exchanges. In light of this activity, we have published a set of FAQs about Regulation A+ securities offerings to help companies better understand this “mini-IPO” offering process, as well as pros and cons compared to a traditional underwritten IPO.

What is Regulation A+?

Regulation A+ is the colloquial name given to a recently adopted SEC rule that amended and expanded a rarely used offering exemption named Regulation A. Regulation A+ can be thought of as an alternative to a small registered IPO and as either an alternative or a complement to other securities offering methods that are exempt from registration under the Securities Act of 1933.

Bass, Berry & Sims Releases Guide for Companies Considering Regulation A+

Our publication is organized in an easy to read FAQ format detailing the two types of Regulation A+ offerings, requirements, process and more.

Below is a sample of the questions that we answer in the document attached.

  • Which companies are eligible to use Regulation A+?
  • What is the general process for a Regulation A+ offering?
  • What are the differences between a Tier 1 and a Tier 2 offering?
  • Are there any ongoing reporting requirements?
  • Can the company also list its securities on the NYSE or NASDAQ trading?

On a related note, earlier this month the House of Representatives approved a bill that would permit existing SEC reporting companies to use Tier 2 of Regulation A+. (Currently, the exemption is not available to Exchange Act reporting companies.)

Download: FAQs About Regulation A+ Securities Offering Download Blueprint for an IPO

If you would like to be mailed a hardcopy, please email us.

Last week, the SEC’s Division of Corporation Finance issued updated guidance on processing procedures for draft registration statements. Below is a FAQ summary table we have prepared related to this new guidance.

There are some nuances in the guidance, so please consult with outside securities counsel before omitting any financial statements in your filing. Contact any member of our Corporate & Securities practice for more information.

Continue Reading 7 Answers to FAQs About the New SEC Guidance for Draft Registration Statements

With the September 1, 2017, deadline fast approaching for complying with the SEC’s new rules on exhibit hyperlinks, we have updated our March blog post with the frequently asked question below.

How does one link to an exhibit in a 30-year old registration statement that was filed as one gigantic ASCII file? The only available “link” would be to the whole file.

Based on recent informal Staff discussions relating to this question, we were instructed that the filer should hyperlink to the ASCII filing containing the exhibit and clearly identify the hyperlinked exhibit that is being incorporated by reference from the ASCII filing. By way of example, the hyperlink description could look something like this:

3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Form S-1 Registration Statement filed with the SEC on XX XX, XXX) (File No. XXX-XXXXXX)

Alternatively, the registrant could voluntarily choose to re-file the old exhibit with the present filing.

If you have other questions about the SEC rules on exhibit hyperlinks, please contact me or another member of our Corporate & Securities Practice Group.

The firm recently released an updated Blueprint for an IPO, a guide to help companies understand the process of going public and the new challenges they will face once their securities are publicly traded. An IPO is at the same time exciting and very demanding on a company’s management team. IPO candidates face for the first time the expansive regulatory scheme administered by the Securities and Exchange Commission (SEC) and must deal with corporate governance processes that are much different than what they had as private companies.

The newly released guide is organized in an easy to use Q&A format detailing many of the ongoing obligations a company will face after it becomes a public company.

Below is a list of the types of questions that are answered in the newest edition of the Blueprint for an IPO.

Continue Reading Bass, Berry & Sims Releases Updated Blueprint for an IPO

Last month, the Staff of the SEC’s Division of Corporation Finance announced that, as part of the Division’s ongoing efforts to facilitate capital formation, all issuers are now permitted to submit draft registration statements relating to IPOs and Exchange Act Section 12(b) registration (e.g., spin-offs) to the Staff for nonpublic (i.e., confidential) review.

Previously, nonpublic review was available only to emerging growth companies (EGCs), as authorized by the JOBS Act, and in certain circumstances to foreign private issuers. Nonpublic submission of registration statements makes it possible for companies to avoid alerting the market of offering plans before the company is certain that it will move forward with any offering.

Continue Reading SEC Extends Confidential Review of Certain Registration Statements to Non-EGCs

The most recent edition of The Business Lawyer, published by the ABA’s Business Law Section, includes its Annual Review of Federal Securities Regulation prepared by its Subcommittee on Annual Review from the Committee on Federal Regulation of Securities. The Review outlines significant developments in federal securities law and regulation during 2016. The Review is divided into three sections:

  • Regulatory actions
  • Accounting statements
  • Case law developments

I currently chair the Subcommittee and wish to give special thanks to all of its distinguished authors that contributed content, including a special thanks to William Lay and Talley Wood from Bass, Berry & Sims for helping draft and edit portions of the Review.

The Review is available here.