Ch 2 Deck 7 Flashcards
Final Prospectus must contain copies of other relevant documents including
Underwriter agreements,
issuer’s articles of incorporation
indentures
Final prospectus must contain general information about
issuer
Final prospectus must contain information about offering including:
Price range amount of stock offered expenses commissions net proceeds use of proceeds underwriters
Final prospectus must contain information about about the issuer and holdings
including
Names,addresses and holdings of those who own more than 10% of stock
Names, address, and holdings of directors, officers and issuers
Issuer’s capitalization
Info on any other offerings or additional businesses that they have acquired
Final prospectus must contain Financial information about issuer (found in Regulation S-X) including
–Audited balance sheets for most recent two years (if in existence that long)
–Audited cash flow and income statements for last three years
–
Must be prepared by independent auditors according to GAAP principles
Time period between when the registration statement is filed with SEC until registration statement becomes effective
Registration period
Registration period is also called
cooling off period
Registration or cooling off period must at least be
20 days
Period after registration statement becomes effective
Post-effective period
A prospectus may not say that the SEC
“has approved” the statement
Prohibited in the pre-filing period
–Written offers (except FWP by WKSI)
–Oral offers
–Sales
FWP’s are allowed in the pre-filing period
WKSI only
FWP defined as
Free writing prospectus (written offers to sell or solicitation to buy)
Allowed in the pre-filing period: issuer statements
made more than 30 days before registration statement is filed
issuer statements in the pre-filing period may not
refer to the contemplated offering
During pre-filing period, regular business communications by reporting issuers
are allowed (including forward looking projections)
uring pre-filing period, regular business communications by non-reporting issuers
are allowed (but NO forward looking info)
any offer to sell a security before the issue has been registered
Gun Jumping
Why is gun jumping not allowed?
The SEC is trying to protect the investor by requiring that the investor see a prospectus with full disclosure
Prohibited during registration period
sales
some offers
During registration period what types of offers are allowed?
Limited offers, oral offers
During registration period what types of prospectus are allowed?
Preliminary prospectus
FWP
also Generic advertisements
During registration period information about the offering that is not considered a prospectus or a FWP that is allowed includes
price underwriters use of the proceeds description of the offering description of marketing events expected ticker symbol
During registration period communications must state
where preliminary prospectus can be found
Are tombstone ads an offer?
no
During registration period tombstone ads are
allowed
For IPOs listed on an exchange, prospectus must be delivered
Up do 25 days after offering
For IPOs listed on OTCBB and Pink Sheet Securities, prospectus must be delivered
Up to 90 days after offering
For Follow-on offerings listed on an exchange, prospectus must be delivered
(not necessary - only Public offerings required when on an exchange)
For Follow-on offerings listed on OTCBB and Pink Sheet Securities, prospectus must be delivered
Up to 40 days after offering
For IPO’s underwriters must deliver A preliminary prospectus to buyers
at least 48 hours before sending the confirmation of sale
Final prospectus delivery requirements can be met through
access equals delivery model (putting it on website)
Requirements for providing a prospectus under the “access equals delivery” model
- Same content as paper version
- Notify investor in timely manner (by the time paper is out)
- Access (must be able to PRINT and SAVE)
- if it is in .pdf, must provide software!!
- Evidence of delivery (email return receipt or record of download.
