Background

The Securities and Exchange Commission (the "SEC") has adopted amendments to Form S-3 and Form F-3 registration statements under the Securities Act of 1933 (the "Securities Act") that become effective on January 28, 2008. The amendments allow certain domestic and foreign private issuers to conduct primary securities offerings on Forms S-3 and F-3 without regard to the size of their public float or the rating of debt securities they are offering, as long as they satisfy the other eligibility conditions of the respective forms, have a class of common equity securities listed and registered on a national securities exchange and do not sell more than the equivalent of one-third of their public float in primary offerings over any period of 12 calendar months.

Reasons for Form S-3 Amendments

The ability to conduct primary offerings on Form S-3 confers significant advantages on eligible companies. Form S-3 allows companies the ability to conduct primary offerings "off the shelf" under Rule 415 of the Securities Act and affords those companies the ability to raise capital much faster and on more favorable terms, such as lower interest rates on debt, and more control over the timing of the offering, thereby taking advantage of more desirable market conditions.

Amendments to Form S-3

Historically, Form S-3 has been available only to issuers with at least $75 million in public float. The amendments allow a U.S. company with less than $75 million in public float to register primary offerings of its securities on Form S-3. The key restrictions for a company with less than this public float to use Form S-3 are that it:

• has a class of common equity securities that is listed and registered on a national securities exchange;
• does not sell more than the equivalent of one-third of its public float in primary offerings over the previous 12-calendar month period; and
• has not been a shell company for at least 12 calendar months before filing the registration statement.

The restriction on the amount of securities that can be sold over a period of 12 calendar months is calculated by reference to a registrant's public float immediately prior to a contemplated sale, and not to the time of the initial filing of the registration statement. Therefore, although the value of a registrant's float during the period that a shelf registration is effective may, at any given time, be much greater than or less than it was at the time the registration statement was initially filed, only the value of the registrant's float at the time of sale is relevant to determining the amount of securities that can be sold without running afoul of the cap.

Amendments to Form F-3

Form F-3 was designed to allow "foreign private issuers" to register securities offerings under the Securities Act using a form that parallels Form S-3. In order to maintain rough equivalency between Form S-3 and Form F-3, the SEC has adopted amendments to Form F-3 that mirror the changes to Form S-3.

For Further Information

If you have any questions regarding the new rules, including how they may affect your company, please contact one of the members of the Securities Law Practice Group or the lawyer in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.