Client Alert
How to Maintain Access to Capital Markets After the Loss of WKSI Status: Making the Transition from Automatic Shelf Registration Statements
February 04, 2009
Mark Schonberger and Smriti Nakhasi
Due to recent volatility in the U.S. stock markets, many issuers have experienced substantial decreases in the trading prices of their common stock, resulting in reduced market capitalization. As a result, upon the filing of their next annual report on Form 10-K or 20-F, many current well-known seasoned issuers (WKSIs) may no longer meet the WKSI definition and no longer be eligible to use an automatic shelf registration statement (ASR). While many issuers may still be eligible to use a Form S-3 or F-3, issuers that anticipate being unable to realize (within 60 days of the filing date of their Form 10-K/20-F) the worldwide public float necessary to maintain WKSI status (at least $700 million) should consider how to manage the transition process from an ASR to a non-automatic shelf registration statement in order to preserve the ability to access the U.S. public capital markets.