NOTE: The last page of this should be printed in landscape orientation.

Registration Forms:
Form S-3 Large seasoned Shelf Registration S-2 Seasoned S-1 SB-1&2 Reg S-K Reg S-X Reg C Requirements Large, seasoned cos that have been reporting for at least 1 year and meet float test public cos w/ min $700m float (stock held by non-officers) Requires only transaction-specific disclosure; may incorporate, by reference, registrant-specific info (10K & all other 34 Act reports). Rule 415 S-3 companies can file a short RS for all future securities that may be offered w/in 2 years. Rationale: they already have steady stream of info to mkts and this reduces costs. Reporting cos that have been filing periodic reports for at least 3 years Annual report must accompany the streamlined prospectus May incorporate by reference any info in the annual report & other periodic filings. Most detailed set of instructions Usually used by cos that dont qualify for other forms (e.g., IPO) No incorp by reference. Small biz issuers with annual revenues of less than $25m and public float of less than $25m. SB-1 allows annual regis of up to $10m in sec sold for cash; SB-2 has no limit. Details non-financial filings required under 33 and 34 Acts by various Registration Forms. Note: Franchard held that Reg S-K is not exhaustive list of required material disclosures. Details financial filings required under 33 and 34 Acts. Procedural & mechanical rules for # of copies, where filed, etc. for RS.

Materiality:
1. 2. 3. 4. 5. Historical events: material if substantial likelihood that a reasonable shh would consider it important in deciding how to vote. (TSC) or if alters total mix of information avail to shh/investor Uncertain contingent/future events: Materiality = Probability x magnitude: probability that it will occur * magnitude of harm if it occurs. (Basic) Truth on the market defense (Wieglos, 7th Cir.) MS or omission may be immaterial if correcting info was circulating in the marketplace, known by investors, and affecting securitys price; use w/ EMH and total mix of info definition of materiality. Rule 408: RS must contain all material info, even that other than that required in the registration forms, to make RS as a whole not misleading. Process for thinking about disclosure: A. Is there a duty to disclose: 1) Line item required disclosure? (Reg S-K) 2) Material under Rule 408 or Franchard concept such that disclosure is required?

Soft info and Forward Looking Statements:

1. 2. 3. Soft info: predictions of future mkt values, projections, opinions, forward looking statements. Duty to disclose soft info: arises from overall obligation that announcements not be generally misleading Management Discussion & Analysis (MD&Z): Reg S-K, Item 303

4.

A. Purpose: to give meaningful look at short & long-term analysis of biz of corp through eyes of mgmt B. Required: known trends C. Encouraged: optional forward-looking disclosure anticipating future trends, less predictable impact of a known event, etc FORWARD LOOKING STATEMENTS are encouraged and protected by: A. Statutory safe harbor (33 Act 27A, 34 Act 21E). Covers forward-looking statements re: earnings (e.g., MD&A) if: 1) Identified as forward-looking AND accompanied by cautionary statement identifying risk factors; OR 2) Forward-looking statement is immaterial; OR a) Materiality standard for MD&A under Item 303: a) reasonably likely to occur (lower threshold han 50% prob) and b) if cannot determine whether reasonably likely, then must disclose full magnitude. 3) P fails to prove forward-looking statement made w/ actual knowledge B. Bespeaks caution doctrine: Judicial doctrine covering forward-looking statements by any person (whether or not in SEC filings); allows summary judgment to weed out frivolous cases 1) Statement not material if statement cautions and generally describes possible risk factors a) Requires precise cautionary info; Boilerplate cautionary language insufficient.. . 2) Cts less likely to protect sophisticated investors if statements include words of caution (Kaufman v. Trump) C. SEC Rules 175 and 3b-6: Covers forward-looking statement by issuer in SEC filings 1) Statement not fraudulent, unless shown to be w/o reasonable basis or in absence of good faith basically a recklessness standard. (not necessary to ID risk factors)

Security definition:
1. Howey test factors: A. Investment for profit, not for commodity or service B. Commonality of interest: Horizontal (b/w other investors) required by some cir; others require only vertical (w/ manager) C. Profits: Primary motivation of investment must be expected returns from earnings, not additional contributions D. Efforts of others: Profits must derive predominantly from managerial efforts (Koscot) Alternately: Economic Realities test: A. Not stock security when investment carries none of normal indicia and characteristics of stock (United Housing Foundation) Notes A. Family resemblance test: (Reves) Rebuttable presumption that notes are securities unless falls into exempt category, such as: (see outline) B. Consider factors such as: motivation of seller/buyer, plan of distribution, reasonable expectations of investing public, other factors that reduce risk. C. Note: commercial notes w/ maturity under 9 months are NOT securities See special distinctions for bank instruments, real estate, etc.

2. 3.

4.

Resales of Restricted Securities or Resales by Control Persons

1. 2(11) Underwriter definition includes these groups which arent covered under 4(1) and MUST find additional transaction exemption to resell: A. Agent for issuer acts for issuer in connection w/ distribution (Chinese Benevolent) B. One who purchases from issuer with view to distribute Investment intent established if hold for more than 3 years C. Distribution for control persons Distirubtion (by broker, dealer) for control persons (those who direct mgmt/policies of issuer through ownership, position, etc Rule 405)

Reliance? Damages

Limitations /Repose

2) D can show P knew alleged MS was false. No reliance required; except 1 year after earnings statement released, Ps have to prove reliance under 11(a) Measured damages - max dam = public offering price (POP) mkt share price when suit is brought - actual dam = amt paid for security not exceeding POP market price - key: never liable for more than POP * # of shares issued; commencement of suit stops loss of defendants b/c sets market price for dam formula 11(e) w/ negative loss causation defense W/in 1 year of discovery of violation; no later than 3 years after sale 13

Prospectus

No prospectus whatsoever. See FN2. Conditioning the market prohibited: Any hype/publicity that may contrib to conditioning the public or arousing interest (Carl Loeb, SEC Rel. 3844) Timely corporate disclosures permitted. Rule 135: Barebones info: amt & type of securities, manner & purpose of offering. Prohibited: Identification
of prospective UWs, offering price. (Chris-Craft).

No prospectus that does not comply w/ 10 (5(b)(1))

Prospectus defined in 2(10) as basically any selling effort in writing or radio or TV No 10(a) prospectus avail since RS not yet effective.

No prospectus (writing) unless it is a statutory prospectus that complies w/ 10(a). Thus, 10(a) prospectus must accompany or precede: written
offers; supplementary sales lit (e.g., free writing); written confirmations; delivery of securities

Prelim prospectus allowed 10(b) and Rule 430: Contains sae info as final prospectus but omits info on offering price and UW arrangements. Cannot hyperlink to other written materials. Summary prospectus allowed- Rule 431 (rarely used)

10(a) prospectus can be: 1) Rule 434 2-step prospectus: prelim prospec & term sheet; or 2) Rule 430: prelim prospect that is amended then declared effective Delivery obligations: See outline for prospec. delivery oblig. under 4(3) & Rule 174. If prospec. used 9 mo after eff. date, info in prospec. cant be more than 16 mo old. 10(a)(3) Correction of incorrect disclosure: if material but
minor, sticker can be used on prospec. w/ new info; if fundamental, must amend RS and wait for SEC to declare effective

Research reports by broker/dealers:

1. Rule 137: Nonparticipants Dealer who is NOT part of UW group may continue to publish & distrib info, opinions, or recommed. in its regular course of biz IF: registrant files reports under 13 or 15(d) of 34 Act AND dealer does not receive any consideration 2. Rule 138: Issuers other securities Participating UW may publish opinion & info relating solely to X if registrant is permitted to use Form S-2 and is registering Not-X. A. X = one of (nonconvertible preferred stock, debt, common stock) 3. Rule 139: Participants - Dealer or UW (participants or not) acting in regular course of biz may publish info, recommend., or opinions if issuer qualifies to use Form S-3. If doesnt qualify for Form S-3, then allowed under other conditions... see outline

Info releases

Modified tombstone Ad permitted Free writing (sales lit) if accompanied or preceded by statutory prospectus. - 2(10)(b) general info about security, by whom order will be executed, price - identifying statement allowed under Rule 134 See E&E p.131 Roadshows: so long as no written materials other than prelim prospectus is distributed. FN2: Rule 403A allows RS to be declared effective even if contains prospectus that omits info on price, UW syndicate (required for post-effective prospectus); such info must later be disclosed later under Rules 424(b)(1), (4), or 497

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