Ch 2 Deck 7

Question 1

Final Prospectus must contain copies of other relevant documents including

Answer 1

Underwriter agreements,
issuer’s articles of incorporation
indentures

Question 2

Final prospectus must contain general information about

Answer 2

issuer

Question 3

Final prospectus must contain information about offering including:


Answer 3

Price range
amount of stock offered
expenses
commissions
net proceeds
use of proceeds
underwriters


Question 4

Final prospectus must contain information about about the issuer and holdings
 including



Answer 4

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

Question 5

Final prospectus must contain Financial information about issuer (found in Regulation S-X)
 including

Answer 5


–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

Question 6

Time period between when the registration statement is filed with SEC until registration statement becomes effective

Answer 6

Registration period

Question 7

Registration period is also called

Answer 7

cooling off period

Question 8

Registration or cooling off period must at least be

Answer 8

20 days

Question 9

Period after registration statement becomes effective

Answer 9

Post-effective period

Question 10

A prospectus may not say that the SEC

Answer 10

“has approved” the statement

Question 11

Prohibited in the pre-filing period

Answer 11

–Written offers (except FWP by WKSI)
–Oral offers

–Sales

Question 12

FWP’s are allowed in the pre-filing period

Answer 12

WKSI only

Question 13

FWP defined as

Answer 13

Free writing prospectus (written offers to sell or solicitation to buy)

Question 14

Allowed in the pre-filing period: issuer statements

Answer 14

made more than 30 days before registration statement is filed

Question 15

issuer statements in the pre-filing period may not

Answer 15

refer to the contemplated offering

Question 16

During pre-filing period, regular business communications by reporting issuers

Answer 16

are allowed (including forward looking projections)

Question 17

uring pre-filing period, regular business communications by non-reporting issuers

Answer 17

are allowed (but NO forward looking info)

Question 18

any offer to sell a security before the issue has been registered

Answer 18

Gun Jumping

Question 19

Why is gun jumping not allowed?


Answer 19

The SEC is trying to protect the investor by requiring that the investor see a prospectus with full disclosure

Question 20

Prohibited during registration period

Answer 20

sales

some offers

Question 21

During registration period what types of offers are allowed?

Answer 21

Limited offers, oral offers

Question 22

During registration period what types of prospectus are allowed?

Answer 22

Preliminary prospectus
FWP
also Generic advertisements

Question 23

During registration period information about the offering that is not considered a prospectus or a FWP that is allowed includes

Answer 23

price
underwriters
use of the proceeds
description of the offering
description of marketing events
expected ticker symbol

Question 24

During registration period communications must state

Answer 24

where preliminary prospectus can be found

Question 25

Are tombstone ads an offer?

Answer 25

no

Question 26

During registration period tombstone ads are

Answer 26

allowed

Question 27

For IPOs listed on an exchange, prospectus must be delivered

Answer 27

Up do 25 days after offering

Question 28

For IPOs listed on OTCBB and Pink Sheet Securities, prospectus must be delivered

Answer 28

Up to 90 days after offering

Question 29

For Follow-on offerings listed on an exchange, prospectus must be delivered

Answer 29

(not necessary - only Public offerings required when on an exchange)

Question 30

For Follow-on offerings listed on OTCBB and Pink Sheet Securities, prospectus must be delivered

Answer 30

Up to 40 days after offering

Question 31

For IPO’s underwriters must deliver A preliminary prospectus to buyers

Answer 31

at least 48 hours before sending the confirmation of sale

Question 32

Final prospectus delivery requirements can be met through

Answer 32

access equals delivery model (putting it on website)

Question 33

Requirements for providing a prospectus under the “access equals delivery” model

Answer 33

• 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.