At-The-Market Offerings

by Laura Anthony, Esq. on May 02, 2012 in Crowdfunding, JOBS ACT, Reverse Mergers, Securities Attorneys, Uncategorized

Anyone that reads the trade journals knows that at-the-market offerings, or ATM’s as they are now known, have recently gained in popularity and are expected to continue to do so.  An ATM is the offering of securities by an Issuer either directly or through an underwriter, which securities are offered and distributed at the existing trading price.  In layman’s terms, an ATM occurs when an already public trading Issuer registers and sells additional securities to the public at the existing trading price, as opposed to a fixed price.  Accordingly, the price that shares sell at in an ATM will vary with the market price on any given day, or even throughout the day.

Under an ATM offering program, an exchange-listed company incrementally sells newly issued shares into the trading market through a designated broker-dealer at prevailing market prices, rather than via a traditional underwritten offering of a fixed number of shares at a fixed price all at once.  To complete an ATM, an Issuer must qualify to use Form S-3 for a shelf registration.  Although there are many ways for a larger company to qualify to use an S-3, generally an Issuer must have a public float valued in excess of $75 million.

Generally, the Issuer enters into a sales agreement with a market maker or broker dealer that agrees to “place” the shares that have been registered under the shelf registration statement when requested by the Issuer.  The Issuer must keep the shelf registration statement current until the offering is completed.

An ATM is a fantastic vehicle for both the qualifying Issuer and placement agent.  The qualifying Issuer can raise money on an as needed basis, basically there stock as a form of currency.  The placement agent can earn a fee for placing the stock, without the risk associated with a firm commitment underwriting.

 

The Author

Attorney Laura Anthony,
Founding Partner, Legal & Compliance, LLC
Securities, Reverse Mergers, Corporate Transactions

Securities attorney Laura Anthony provides ongoing corporate counsel to small and mid-size public Companies as well as private Companies intending to go public on the over the counter market including the OTCBB and OTCQB. For almost two decades Ms. Anthony has dedicated her securities law practice towards being “the big firm alternative.” Clients receive fast and efficient cutting-edge legal service without the inherent delays and unnecessary expense of “partner-heavy” securities law firms.

Ms. Anthony’s focus includes but is not limited to crowdfunding, registration statements, PIPE transactions, private placements, reverse mergers, and compliance with the reporting requirements of the Securities Exchange Act of 1934 including Forms 10-Q, 10-K and 8-K and the proxy requirements of Section 14. Moreover, Ms. Anthony represents both target and acquiring companies in reverse mergers and forward mergers, including preparation of deal documents such as Merger Agreements, Stock Purchase Agreements, Asset Purchase Agreements and Reorganization Agreements. Ms. Anthony prepares the necessary documentation and assists in completing the requirements of federal and state securities laws and SRO’s such as FINRA and DTC for corporate changes such as name changes, reverse and forward splits and change of domicile.

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