It’s a tale as old as time for many small- and mid-cap biotech companies…you file a new Form S-3 shelf registration statement in connection with your Form 10-K filing in late February or March and are eager to do a shelf takedown after some promising investor meetings. The SEC confirms that it is not reviewing the Form S-3 and you are able to go effective, but wait! As a non-WKSI, you must have your proxy information on file (either through Part III of your Form 10-K or by filing your proxy within 120 days of year end) in order to take your Form S-3 effective and begin using the shelf. Companies have historically had three choices to resolve this dilemma: (i) quickly pull together a Form 10-K/A to include Part III information in the Form 10-K filing, (ii) accelerate the proxy filing timing or (iii) wait until the proxy is on file. Options (i) and (ii) will put unwanted pressure on the legal and finance teams and under option (iii) each passing day could mean the difference between an equity raise and losing interested investors.
This story now has a new ending. Effective March 20, 2025, companies are no longer required to have proxy information on file in order to take a non-WKSI Form S-3 effective, which is consistent with the treatment of automatically effective WKSI Form S-3s. Now, if a company files a new Form S-3 shelf registration statement in connection with its Form 10-K filing, the Form S-3 may go effective as soon as it is cleared by the SEC – opening up a window for shelf takedowns that could have been closed for more than six weeks under the prior guidance.
To effect this change, Securities Act Forms CDI 114.05 and Securities Act Rules CDI 198.05 were both updated, and Securities Act Forms CDI 123.01 was withdrawn.