Purpose
Form S-3 is a registration statement filed with the Securities and Exchange Commission (SEC) by reporting company issuers to issue shelf offerings (Law.cornell.edu, n.d.). Shelf offerings allow securities to be registered for an offering to be made on a continuous or delayed basis in the future (Securitieslawyer101.com, 2020).
Key Facts
- Purpose: Form S-3 is used by companies to register securities with the SEC under the Securities Act of 1933 for U.S.-based companies only.
- Eligibility Criteria: In order to use Form S-3, companies must have already satisfied all reporting requirements of the Securities Exchange Act of 1934 from sections 12 or 15(d) and have some form of security filed with the SEC.
- Simplified Reporting: Form S-3 provides a simplified reporting process for issuers of registered securities. It requires less disclosure compared to other registration statements.
- Shelf Offerings: Form S-3 enables shelf offerings, which means securities can be registered for an offering to be made on a continuous or delayed basis in the future.
- Content: Form S-3 consists of two parts. Part one includes a cover page, risk factors, and a prospectus that will be made available to potential investors. Part two includes exhibits, undertakings, and other disclosures that are not typically distributed to investors but are made available to the public through the SEC’s EDGAR system.
- Incorporation by Reference: Form S-3 allows issuers to incorporate by reference information from their current and future periodic reports and proxy statements filed with the SEC, making the registration statement automatically updated.
Eligibility Criteria
To be eligible to file a Form S-3, companies must meet the following criteria:
- Have a class of securities registered under Section 12, or have been subject to Section 15(d), of the Exchange Act for the past 12 months (Securitieslawyer101.com, 2020).
- Have timely filed all Exchange Act reports required to be filed during the past 12 months (Securitieslawyer101.com, 2020).
- Not have defaulted on any material debt or long-term lease since the end of the most recent fiscal year (Securitieslawyer101.com, 2020).
- Not have failed to pay any dividend or sinking fund installment on preferred stock since the end of the most recent fiscal year (Securitieslawyer101.com, 2020).
- Have filed with the SEC and posted on its corporate website all interactive data files (XBRL information) required to have been filed during the past 12 months (and any portion of the month in which the issuer intends to file the registration statement) (Securitieslawyer101.com, 2020).
Simplified Reporting
Form S-3 provides a simplified reporting process for issuers of registered securities (Investopedia, 2021). It requires less disclosure compared to other registration statements (Securitieslawyer101.com, 2020).
Content
Form S-3 consists of two parts (Securitieslawyer101.com, 2020):
Part I: Includes a cover page, risk factors, and a prospectus that will be made available to potential investors.
Part II: Includes exhibits, undertakings, and other disclosures that are not typically distributed to investors but are made available to the public through the SEC’s EDGAR system (Securitieslawyer101.com, 2020).
Incorporation by Reference
Form S-3 allows issuers to incorporate by reference information from their current and future periodic reports and proxy statements filed with the SEC (Securitieslawyer101.com, 2020). This makes the registration statement automatically updated every time the issuer files a new Exchange Act report or other filing incorporated by reference (Securitieslawyer101.com, 2020).
Sources
- Investopedia. (2021, January 02). SEC Form S-3: Definition, Parts, When to Use It, and How to File. https://www.investopedia.com/terms/s/sec-form-s-3.asp
- Law.cornell.edu. (n.d.). Form S-3. https://www.law.cornell.edu/wex/form_s-3
- Securitieslawyer101.com. (2020, January 01). Form S-3 Registration Statement Eligibility and Requirements. https://www.securitieslawyer101.com/2020/form-s-3-registration-statement-eligibility-requirements/
FAQs
What is Form S-3 used for?
Form S-3 is a registration statement filed with the SEC by reporting company issuers to issue shelf offerings. Shelf offerings allow securities to be registered for an offering to be made on a continuous or delayed basis in the future.
Who is eligible to file a Form S-3?
To be eligible to file a Form S-3, companies must meet the following criteria:
- Have a class of securities registered under Section 12, or have been subject to Section 15(d), of the Exchange Act for the past 12 months.
- Have timely filed all Exchange Act reports required to be filed during the past 12 months.
- Not have defaulted on any material debt or long-term lease since the end of the most recent fiscal year.
- Not have failed to pay any dividend or sinking fund installment on preferred stock since the end of the most recent fiscal year.
- Have filed with the SEC and posted on its corporate website all interactive data files (XBRL information) required to have been filed during the past 12 months (and any portion of the month in which the issuer intends to file the registration statement).
What are the benefits of using Form S-3?
Form S-3 provides a simplified reporting process for issuers of registered securities. It requires less disclosure compared to other registration statements. Additionally, Form S-3 allows issuers to incorporate by reference information from their current and future periodic reports and proxy statements filed with the SEC, making the registration statement automatically updated.
What are the drawbacks of using Form S-3?
The main drawback of using Form S-3 is that it is only available to eligible issuers. Additionally, Form S-3 requires issuers to have a public float of at least $75 million.
What is the difference between Form S-3 and other registration statements?
Form S-3 is a simplified registration statement that is used by eligible issuers to register securities for shelf offerings. Other registration statements, such as Form S-1, are more comprehensive and are used by issuers that are not eligible to use Form S-3.
How do I file a Form S-3?
To file a Form S-3, you must first meet the eligibility criteria. Once you have met the eligibility criteria, you can file the Form S-3 with the SEC through the EDGAR system.
What happens after I file a Form S-3?
Once you have filed a Form S-3, the SEC will review the filing. If the SEC has any questions or concerns, they will contact you. Once the SEC has approved the filing, you will be able to sell the securities that are registered on the Form S-3.