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Question (Relevant to the Series 24, Series 62, Series 79):
Flash Dance Corporation, a popular web-based dance academy, is issuing new common stock securities. The company went public 5 years ago and has a public float of $80 million. The company is listed on NASDAQ. What form should Flash Dance Corporation fill out to register the new securities?
Answers:
A. S-1
B. S-2
C. S-3
D. S-8
Correct Answer: C
Rationale: The SEC offers forms for companies to use to file their Registration Statement. The S-3 form is briefer, and therefore much more desirable than the S-1 form. S-1 forms are used for initial public offerings or small, unseasoned reporting companies who are issuing new securities. The S-3 form is used for large, seasoned companies that already report with the SEC. These companies must have a public float of at least $75 million or have their securities listed on a public exchange. The public float is the total market value of the company’s stock not held by insiders or affiliates. The S-1 form requires a full prospectus which includes extensive information about the corporation. In contrast, the S-3 form allows a briefer prospectus which only describes the particular offering, and issuers simply refer to annual reports and other reporting documents that have already been filed. The S-2 form is no longer used by the SEC. The S-8 form is used for employee stock purchase plans. Flash Dance Corporation would file an S-3 form because they are listed on a national stock exchange, and they have a public float over $75 million.
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