|
Hypothetical
5--WAITING PERIOD--FACTS/QUESTIONS |
||
| SECTION 1 HOME ON LINE LINKS SEARCH TABLE CONTENTS SECTION 2 SECTION 3 SECTION 4 |
AnimatEASE Corp. hired Smith and Jones LLP as its SEC counsel to prepare the initial draft of the registration statement. After completion of the initial draft, several drafting sessions are held, generally attended by Richard Abbot, John Baker, who is the Chief Financial Officer of AnimatEASE Corp., John Smith, a partner of Smith and Jones, and two associates working with him, issuer's in-house counsel, underwriter's counsel and an associate working with her, G.G. George, and other personnel of Silicon Securities who collectively are the working group responsible for the preparation of the registration statement. The working group reviewed the most recent draft of the registration statement and are in accord except as to a few loose ends as to its content. The close to ready to file registration statement is delivered to Insight Printers, a financial printer. Insight sets the registration statement in type, prepares proofs, which are collectively reviewed at Insight's conference room by the working group the following morning. The working group make last minute revisions, taking care, among other things, of the loose ends. The registration statement is filed electronically by Insight Printers, which is an EDGAR filing agent, with the SEC (via EDGAR) early afternoon, and overnight the preliminary prospectus is printed. We aren't prepared yet to prepare the registration statement, but to get a feel for what is involved review the Netezza links in the background to this hypothertical and for a change of scenery and a local feel we look at the cover page of the registration statement and cover page filed by Domino's Pizza at various stage of the process. Use the bookmarks to navigate from the S--1, to Amendments 1 and 4 of the prospectus, and the final prospectus. Note as to the cover page of all prospectuses through Amendment 4, on which the registration went effective that each is a preliminary prospectus. Note that the cover page of the prospectus included as part of the initial S-1 filed on April 13, 2004, leaves the number of shares to be offered, the range of the offering price as well as the pricing table (price per share-total etc.) are blank. Note also the statement that the company intends to apply for listing on the New York Stock Exchange. Although this also moves us ahead, note that Regulation S-K, Item 501(b)(3), Instruction (1) provides as follows: Instructions to paragraph 501(b)(3)
A preliminary prospectus that is required under this Instruction to include the estimated range of the offering price and does not, is know colloquially as a "pink prospectus." Many IPOs do not include the range until they have received comments from the staff and responded by filing Amendment No. 1. In the cases of Salesforce.com Form S-1 the offering range was not included until Amendment No 3. Since Domino Pizza like virtually all IPOs was a non-reporting company, could it have circulated among broker-dealers the preliminary prospectus included in the initial registration statement? What about Netezza? When could it circulate its preliminary prospectus? We will see that the SOR places other limitations on IPOs if the company has failed to file a registration statement including on the cover page of the prospectus the offering price range. Domino Amendment No. 1 filed on May 19,, 2004 includes the number of shares being offered (24,062,500) of which only 9,375,000 are being included by the company, indicates a range between $15. to $17. a share as the estimated offering price. The cover page of the prospectus of amendment No. 4 filed on July 9, 2004 on which the company went effective is unchanged, but the prospectus dated July 14, 2004 increases the shares being offered to 24,221,929 shares (increase all attributed to selling shareholders) and the offering is price at $14.00 a share with an underwriting commission S0.96 per share (approximately 6.86%). The cover page also states that the shares have been approved for listing on the New York Stock Exchange. See Regulation S-K, Item 501 that specifies the content of the prospectus cover page. (a) The day the registration statement is filed with the SEC, the Syndication Department of Silicon Securities sends a package to fifty investment bankers throughout the United States inviting them to participate in the underwriting syndicate. The package includes a copy of the registration statement as filed, an unexecuted copy of the underwriting agreement expected to be entered into, a copy of an agreement among underwriters expected to be entered into, and a power of attorney. Consider again the Section 2(a)(3) definition of sale? (b) The Syndication Department of Silicon Securities sends a letter to 50 securities dealers throughout the country offering them an opportunity to participate as a member of the selling group. The letter on the stationery of Silicon Securities reads as follows: Gentlemen: We are transmitting to you herewith a copy of a Selected Dealers Agreement relating to an offering of 10 million shares of the no par value common stock of AnimatEASE Corp. expected to be offered at a price of between $10 and $12 a share. The offering is a new issue and represents new financing. Selling dealers will receive 60% of the underwriting discount as will be set forth in the definitive prospectus. AnimatEASE Corp. is engaged in the business of developing animation software applications for use by amateur and professional animators.. We are acting as the managing underwriter of the offering, which is expected to commence on or about February 15. Please indicate on the detachable coupon below your interest in participating in the offering and the amount of shares you desire to be allocated to you. A copy of the preliminary prospectus can be obtained from the undersigned. Very truly yours, Syndicate Manager, Silicon Securities ------------------------------------------------------------------------------------------------------------------------ To Silicon Securities: The undersigned dealer is interested in participating as a member of the selling group in the offering of 10 million shares of the common stock of AnimatEASE Corp. in accordance with the terms of the Selected Dealers Agreement. Please allocate ___________ shares to the undersigned. _____________________________ By___________________________, Authorized Officer A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE, AND ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME PRIOR TO NOTICE OF ITS ACCEPTANCE GIVEN AFTER THE EFFECTIVE DATE. AN INDICATION OF INTEREST IN RESPONSE TO THIS ADVERTISEMENT WILL INVOLVE NO OBLIGATION OR COMMITMENT OF ANY KIND. (c) The same letter is sent to several other dealers, but without the detachable coupon and without the sentence referring to the detachable coupon. (d) Richard Abbot and George travel to several cities where they hold meetings with prospective members of the selling group and financial advisers to several institutional investors. Richard Abbot and George verbally describe the company, its product, the experience of the officers and directors. A copy of the preliminary prospectus is given to each attendant. George takes and records verbal indications of interest from a number of the dealers present and institutional investors. (e) Ten days after the registration statement is filed with the SEC, AminatEase Corp. enters into a contract with Itshibishi Corp. of Nagoya, Japan, under which Itshibishi will become the exclusive distributor of the ANIMATE product line in Japan. Itshibishi committed to purchase, after the first year of marketing, software appliations with an annual retail value of $20 million. This commitment is subject to a number of conditions, including the ability of ANIMATEASE Corp. to ship specified quantities on a schedule set forth in the Agreement and ANIMATE II meeting a number of performance specifications within twelve months. On the day the contract is executed, Easy and Associates, on behalf of AnimatEASE Corp. sends a release to the Wall Street Journal, a number of other publications, and Business Wire, all of which reprint it in substance. The Release states as follows: Mr. Richard Abbot, President of ANIMATEASE Corp., developers of ANIMATE software appliations, announced today that ANIMATEASE Corp. has entered into an agreement with Itshibishi Corp. of Nagoya, Japan, under which Itshibishi will become the exclusive distributor of ANIMATE in Japan. Itshibishi has committed to purchase, after the first full year of marketing the product in Japan, product with an annual retail value of $20 million. This commitment is subject to a number of conditions, including the ability of ANIMATEASE Corp. to ship specified quantities on a schedule set forth in the Agreement and ANIMATE II, presently a prototype beta version, meeting a number of performance specifications. Mr. Abbot expressed confidence that with the new financing in progress AnimatEASE Corp. will be able to meet the schedule and the specifications. f. Assume the same release, but with the last sentence deleted. g. Assume the same release, with the last sentence deleted transmitted by email to all the companies suppliers, licensees, and users of its products. h. Assume the same press release referred to in e. after the company has gone public and become a reporting company in connection with a follow on registered offering and one that adds the following sentence: Mr. Abbot noted that the company recently released guidance in accordance with its past practice that it expects total revenues for the current year of between $150 and $160 million. Review Rule 168 and Rule 169 in
addition to Part 5. background. Take into Account Rule 134 to the extent relevant. Note this the amended Rule 134 that went into effect December 1, 2005. Compare the old Rule 134.
We do not consider at this point the provisions of SOR relating to a media free writing prospectus.
|
|