Using Existing Registration Statements After A Decline In Market Capitalization

Article by Ettore A. Santucci P.C. , Daniel P. Adams , John O. Newell and David H. Roberts

Substantial decreases in the trading prices of many companies' common stock in recent months have left these companies with reduced market capitalization. This may have a variety of effects, such as failure to satisfy continued stock exchange listing standards or to meet covenants based on market capitalization in debt obligations. Significant effects can be loss of status as a well-known seasoned issuer ("WKSI") and/or eligibility to use Form S-3 for unlimited primary offerings of securities, both of which are based in part on the value of the company's public float¹ on any day selected by the company during the 60 days prior to the date on which the company files its Form 10-K. A company's ability to access public securities markets, raise capital and meet its contractual securities registration obligations may be significantly affected by its WKSI status and its