Incorrect Questions

What do public companies typically have on their website?

"Investor Relations" link that contains stock price information, research analyst coverage, investor presentations, press releases, calendar of investor events, downloadable SEC filings, and company investor relations contact information

What is a "stapled financing"?

"pre-packaged," committed financing structure offered to buyers in support of the target being sold

An issuer has $750 million of voting common stock and $150 million of non-voting common stock worldwide. To meet the market cap test for purposes of qualifying as a WKSI, what is the maximum amount of this stock (voting and non-voting) that may be held by affiliates?

$200mm

An underwriter wishes to engage in stabilization of an issue's price. The offering price is $25 a share and the highest bid for the security in the principal market where it trades is $24. No stabilizing bid may be made at a higher price than

$24 No stabilizing bid can be made at a price higher than the lower of: 1) the offering price; or 2) highest bid for the security in the principal market where it trades.

If a company has net operating profit after tax of $95 million, what will its free cash flow be, assuming capital expenditures of $30 million, depreciation and amortization of $18 million a decrease in working capital of $9 million?

$92 million Free cash flow = NOPAT capex + D&A + decrease in net working capital = $95mm NOPAT- $30mm capex + $18mm D&A + $9mm change in net working capital = $92mm. Note that the decrease in net working capital is a source of cash because the company is either converting its current assets to cash or pushing out its payables

Fixed Charge Coverage Ratio

(EBIT + Lease Payments)/(Interest Payments + Lease Payments) fixed charges typically include interest expense, preferred stock dividends, and lease expenses (such as rent). The definition may be structured to include or exclude non-cash and capitalized interest

Who can and cannot invest in an IPO?

- Employees of broker-dealers and their immediate family members, defined as spouses, parents, in-laws, siblings, and children - A person who owns 25% or more of a broker-dealer - Note who is not immediate family and therefore not restricted: grandparents, aunts and uncles, cousins, nieces and nephews, and ex-spouses

Exceptions to IPO registration for restricted persons

- Employees of the issuer or their family members—even if they would otherwise be restricted - A broker-dealer or registered rep was already an investor in the company prior to its IPO and wants to avoid dilution. - Issuer directed shares

FINRA Rule 2290 contains three required types of written procedures for fairness committees:

1) the method for selecting committee members, 2) qualifications needed to sit on the committee, 3) safeguards to promote a balanced review by the committee. Documentation of the committee's compensation is not required

Criteria for a loss to be declared an extraordinary item?

1) their unusual nature, and 2) by the infrequency of their occurrence

3 WIKSI benefits?

1. Can distribute a FWP (including an offering announcement) prior to filing an S3 2. Can pay filing fees via pay-as-you-go (i.e. when the securities are sold). 3. WKSIs benefit from an automatic shelf, meaning the registration statement is not subject to review by the SEC.

Rule 10b-18 Safe Harbor restrictions

1. Must use a single broker per day 2. Buybacks must be made at time other than the opening of trading or the last half hour of trading. If ADTV of at least $1mm and a public float of at least $150mm, the end of day restriction applies to the last 10 minutes of trading 3. May not purchase at price greater than the highest independent published bid or last independent transaction price, whichever is higher OTC stock price determined by highest independent bid from three independent broker dealers 4. May repurchase up to 25% of ADTV over a 4 week period. One block purchase per week is permitted outside the 25% limit, if no other purchases made the same day

24 broker-dealers will participate in distributing shares of a public stock offering. Only eight are underwriters and the remaining 16 are in the selling group. To how many broker-dealers, at minimum, must the syndicate take reasonable steps to deliver red herring documents?

24 The syndicate must take reasonable steps to deliver sufficient copies of the red herring to each underwriter and broker-dealer expected to participate in a distribution. The SEC expects underwriters to make the red herring conveniently available to all investors

A proposed plant expansion by a manufacturing company will cost $70 million. To evaluate the project, an analyst runs two net present value (NPV) scenarios, each of which assumes the same 10-year series of cash flows to be produced by the project. In one scenario, the company uses a "hurdle rate" of 7%. In the other, it uses a hurdle rate of 8.5%. Which scenario will produce the higher net present value?

7.0% hurdle rate The hurdle rate in NPV analysis may represent the company's required rate of return on investment, or it may represent a cost of capital (e.g., discount rate). In either case, it works the same as a discount rate in discounted cash flow analysis. In NPV, the investment is input as a current cost, a negative number. Cash flows returned are a stream of positive numbers discounted by the hurdle rate. If the sum of all numbers input is positive, the project "clears the hurdle rate" on an NPV basis and is viable. The lower the hurdle (discount) rate is, the more valuable the present value of future cash flows and the higher the NPV will be

What is a "no-shop" provision?

A "no shop" provision refers to a provision between the buyer and seller in which the seller agrees not to seek a better offer from another potential acquirer

Tender offer info

A "squeeze out" of shareholders who do not tender, takes place once 90% of the shares are tendered. Proxies are generally sent out by regular mail or electronically, not certified mail. In a merger vote by proxy, the shareholders are voting on a deal at a specified price. There is no variation in the price that the selling shareholders receive. The fact that a dissenting shareholder can request appraisal rights in a proxy vote, is troublesome, and could lead to protracted litigation.

Selling control stock under 144

A Form 144 must be filed with the SEC, which opens a 90-day window for the affiliate to sell up to the appropriate number of shares. If the securities are sold in the open market, the insider also files a Form 4 within two business days of the sale

What happens if a plan of reorganization doesn't receive the required votes?

A cramdown is possible: - Plan can still be approved if one impaired creditor class accepts it Note: Impaired creditor class vote excludes the votes of any company insiders in that class

What is not a directed selling effort under Regulation S?

A tombstone advertisement in a publication with less than 20% of its circulation in the U.S.

Which of the category of filers must file their Form 10-K within 75 calendar days of fiscal year end?

Accelerated filers, with a non-affiliate worldwide market cap of $75mm (but less than $700mm), have 75 calendar days to file a Form 10-K.

In an M&A sale, at what point are buyers typically granted access to the data room?

Access to the data room is typically granted to those buyers that move forward after first round bids, prior to, or coinciding with, their attendance at the management presentation. Depending on the situation e.g., a compressed timetable buyers may be granted access prior to the management presentation, but only after they have been accepted into the second rou

Debt Service Coverage Ratio

Adjusted EBITDA / Interest Expense Cash flow as a % of debt

Control stock sale volume limitations

Affiliates can sell the greater of: - 1% of the outstanding shares, or - The average reported weekly trading volume during the preceding four weeks

When are 8-k reports filed?

After a definitive agreement and after the closing of the merger

Phil is an investment banker acting as a paid advisor to a public company involved in a tender offer ("the purchaser"). He is not affiliated with the purchaser and is not a dealer-manager working on behalf of the purchaser. Is he considered a "covered person," prohibited from purchasing affected securities during the tender offer, except as part of the tender offer?

An advisor to a covered person is also considered a covered person if his/her compensation depends on the tender offer's completion or success.

A business disruption that results in a loss of income due to a hurricane would be classified as a what and on which financial statement?

An extraordinary loss on the income statement.

Syndicate Expenses & their impact on the spread

Any payments by the issuer to cover syndicate expenses, such as marketing expenses or the underwriter's counsel, are considered additional compensation to the underwriter and would eat into the spread

An underwriter files a preliminary prospectus with the SEC, as required under Rule 424. The underwriter then notices that there are mistakes in the red herring that must be corrected. In which case would the filing of copies of the updated "red herring" be required?

Any substantive changes in a red herring require a re-filing, with five copies of the revised preliminary prospectus sent to the SEC.

Under SEC Rule 145, business combinations such as mergers and acquisitions must be registered if securities holders

Are asked to vote or give consent or agreement

What happens to high-yield bonds as interest rates & inflation rise?

As interest rates rise, high-yield (lower-quality) bonds become more vulnerable to default or downgrade risk.

The CEO of XYZ Corp. attends a banquet with a number of equity research analysts. At the banquet, the CEO intends to make an announcement regarding the company's earnings. Under Regulation FD, when is the company required to release this information to the public?

At the time of the banquet Under Regulation FD, intentional disclosure of material, non-public information, requires simultaneous public disclosure. If the disclosure had been inadvertent, public disclosure would have been required within 24 hours or by the open of the next business day's trading, whichever is later

A foundation has assets of $75 million and is subject to the customer suitability information-gathering standards of FINRA Rule 2111. How can the foundation "opt out" of providing this information?

By affirmatively indicating a desire to forego suitability protections

Which of the following types of entities pays federal income tax on IRS Form 1120?

C Corp

The section of the U.S. Bankruptcy Code that allows individuals to obtain a "fresh start" by discharging debts is

Chapter 7

For which types of securities can a public offering be made at a fixed price, based solely on the judgment of the syndicate manager and without any supply-demand feedback?

Corporate bonds In a fixed-price offering, all shares must be sold at the public offering price. They cannot be sold at a discount to any investor. Fixed-price offering are not permitted for exempt securities (e.g., US Treasuries), municipal securities or mutual fund offerings

In which M&A document is the break-up fee detailed?

Definitive Agreement

A registration statement does NOT include?

Detailed shareholder lists When a public acquirer issues shares as part of the purchase consideration for a public target, the acquirer is typically required to file a registration statement/prospectus (S-4) in order for those shares to be freely tradable by the target's shareholders. Similarly, if the acquirer is issuing public debt securities (or debt securities intended to be registered) to fund the purchase, it must also file a registration statement/prospectus. The registration statement/prospectus contains the terms of the issuance, material terms of the transaction, and purchase price detail. It may also contain acquirer and target financial information, including on a pro forma basis to reflect the consummation of the transaction (if applicable, depending on the materiality of the transaction). The registration statement/prospectus does NOT contain a detailed shareholder list.

For a company that wants to generate liquidity for shareholders in a non-dilutive fashion, what would be the best way to do so?

Dividend recap

Tender offers and shorting

During a tender offer, an investor can tender only up to the amount of their net long position. An investor could not tender more than their net long position.

Under Rule 430A, a preliminary prospectus may be filed as part of a registration statement, and omit timely details of the offering, if the securities are offered for cash and the omitted information is contained in a prospectus

Filed within 15 days of the effective date of the registration

Under Rule 14e-5, a "covered person" is not allowed to purchase shares of the target company in a tender offer, except by tendering shares through the offer, during which period?

From the time the tender is publicly announced until it expires

A Chapter 7 bankruptcy filing I. results in the liquidation of an insolvent firm II. allows corporations to discharge debts III. usually wipes out equity holders

I and III only A Chapter 7 bankruptcy case usually results in the liquidation of an insolvent firm, with its assets distributed to creditors and equity holders wiped out. This type of filing allows individuals, not partnerships or corporations, to discharge debts. For this reason, Chapter 7 filings are rare in the corporation world.

Under FINRA Rule 2111, which of the following entities would be considered an "institutional customer" for purposes of gathering customer suitability information? I. Pension fund with assets of $27 million II. Insurance company III. Individual with assets of $60 million IV. Bank

II III & IV An individual can be an institution, if total assets are at least $50 million. A pension fund, foundation or endowment is not considered an institution unless it has assets of at least $50 million

In which two of the following circumstances might a break-up fee be paid? I. The buyer receives a breakup fee from the seller because seller sees business is picking up and kills the deal II. The buyer receives a breakup fee from the seller because the seller terminates the deal to take a better offer III. The seller receives a breakup fee from the buyer because the buyer cannot come up with financing IV. The seller receives a breakup fee from the buyer because the buyer has concerns that business will decline

II and III . Business trends do not typically constitute grounds for termination and receipt of a break-up fee post-signig

Which two of the following typically participate in the site visits? I. Target company CEO II. Local site manager III. Target company general counsel IV. Sell-side adviser

II and IV

The SEC Rule 10b-18 safe harbor applies to open market purchases of an issuers I. Debt securities II. Preferred Stock III. Common stock

III Common stock

Which types of debt does Chapter 7 not allow a debtor to discharge?

IRS tax liens, student loan principal or home mortgage debt

On a day when AHJ Corp. stock is trading at $100 per share, the company executes a block trade, buying back 100,000 of their shares at $103. Assume the par value of the stock is $1 per share. AHJ repurchases the stock reserving the right to reissue the shares in the future. What would be the impact of this transaction on AHJ's balance sheet? How would this differ if they were retiring the shares?

If a company repurchases their stock, it should be recorded at whatever price was paid, not what the fair market value of the stock might be. In this case, it would be $10,300,000. If the stock repurchased was going to be permanently retired, the par value (common stock line) would be reduced by $100,000 ($1 par x 100,000 shares) and the capital surplus line (APIC) would be reduced by $10,200,000 adding up to $10,300,000. Since the shares might be reissued one day, a negative equity account called "treasury stock" will be created for the $10,300,000

Meagan, a client of a broker-dealer, invests in an IPO in which the issuer has a conflict of interest. Is her broker required to disclose this fact to her before she decides to invest?

If an issuer conflict exists, any sale of the new issue to clients requires verbal disclosure prior to the sale and written disclosure no later than settlement

An investment banking firm bases a fairness opinion on information supplied by the client company. The firm must disclose whether it independently verified this information through other sources only if the information

If information provided by the client forms a "substantial basis" for the opinion, the fairness opinion letter must disclose whether or not the information is independently verified.

When do selling shareholders vote by proxy?

If stock is given as consideration and increases share count by 20%

Voting on a plan of reorganization

In a Chapter 11 bankruptcy, a plan of reorganization must be approved by creditor vote. This requires: 1. 2/3 vote of the dollar amount claims, and 2. 1/2 the number of claims

ABC Enterprises has been in business for four years, and it now wishes to raise capital via crowdfunding, by selling its shares. How must it disclose key financial data to prospective investors?

Investors can research financial data of the issuer by going to an intermediary (broker-dealer or registered funding portal) and looking for Form C, which must be filed with the SEC. The Form C disclosures include selected financial data of the issuer for the current year and prior year, including assets, cash, debt, sales, taxes and net income.

To qualify for a short-form S-3 registration filing, a company must meet several requirements. One requirement is that it must not have sold more than what percentage of its public float under S-3 filings over the previous 12 calendar months?

It may help you remember this by mentally associating S-3 with 33.3%. Also, remember the "previous 12 calendar months" restriction, as both are important. Note that the 33.3% limit is for "public float" of issuer common stock.

Two prospective investors, Joe and Jane, each attend separate distributions of the same electronic road show, scheduled one week apart. The version of the road show attended by Joe is substantially similar to the one attended by Jane one week later. Which version of the road show must be filed with the SEC?

It must be the version presented to Joe, or else a version presented prior to that date A recorded road show must be made available no later than the date of first use. It also must be filed with the SEC prior to viewing. Variations in electronic road shows are permissible, as long as all investors receive the same "core presentation." Also, this filing is considered free-writing a prospectus.

For a company with steadily rising earnings, what will be the relationship between the forward P/E multiple and the LTM P/E multiple?

LTM P/E multiple will trade higher. The numerator in both ratios is the same current stock price. The denominator in the forward P/E multiple is analysts' estimates (or consensus) for earnings in the future, which will be higher than current or trailing earnings. The forward P/E ratio for a steadily growing company will therefore be lower than the trading multiple at a given point in time

Which of the following is not a listing requirement for Nasdaq? A. Bid Price B. Number of market makers C. Average daily trading volume D. Average monthly trading volume

Nasdaq does have a minimum monthly trading volume requirement but not a minimum daily trading volume requirement

Is a prospectus that describes the characteristics of a new equity security considered a research report?

No--by definition, a prospectus is not considered an equity research report

An investment banking firm is receiving a fee of $25,000 for writing a fairness opinion and providing other advice pertaining to an M&A transaction. In which case must the amount of the fee be disclosed?

None. The existence of a fee needs to be disclosed if its payment is contingent on deal closing. Even then though, the amount of the fee does not require disclosure.

Would a husband and wife be considered one or two shareholders in an s-corp?

One shareholder

Just prior to going public, a streaming media company releases financial projections for future subscriber growth. Is this a violation?

Only if it is not part of their regular business activities

In the event the lead bookrunner of a follow-on offering seeks to exercise an overallotment option, at what point is the distribution deemed completed?

Only when all of the securities have been distributed, and after any stabilization and trading prohibitions have been terminated, can the distribution be deemed completed. If an overallotment option is exercised at a later date, the distribution is still deemed completed, unless the overallotment is exercised for an amount greater than any short position by the syndicate at exercise.

What do public companies typically not provide on their website?

P/E or EV/EBITDA multiples.

Company Y, with $60mm EBITDA, buys Company Z, with $10mm EBITDA. Post-transaction, Company Y's balance sheet shows the following balances: -Accounts Payable: 10mm -Deferred Liabilities: 12mm -current maturities: 25mm -Secured Debt: 50mm -Deferred Tax Liabilities: 45mm -Debenture bonds: 100mm Assuming Company Y's Debt / EBITDA cannot exceed 4x, how must additional leverage could it incur, post-acquisition?

Post-transaction EBITDA = 60mm + 10mm = 70mm Current debt = 25mm current notes + 50mm secured debt + 100mm debentures = 175mm 70mm EBITDA can support debt of up to 280mm (4 x 70) Therefore, the company could take on 105mm of additional debt (280 max - 175 already outstanding)

A registered rep has noticed that a particular stock has had strong revenue growth recently and the stock has risen consistently for the past eight months. The rep would be most likely to recommend this stock to an investor whose objective is

Price momentum Price momentum investors seek out stocks that have recently performed well and try to "hop on board" to benefit from continued gains. Although the objective is somewhat like growth investing, the differentiating factor (and hence correct answer here) is based on the stock having recently gone up consistently over the past eight months.

A foreign issuer wishes to raise $100 million in the US without going through SEC registration of its securities. What type of private offering is it permitted to sell to accredited US investors?

Regulation D

In a successful M&A process, at what point is the press release with the transaction announcement typically issued?

Shortly following the signing of the definitive agreement The press release with transaction announcement is typically issued as soon as practicable following the signing of the definitive agreement. While the company typically issues a press release upon the receipt of HSR and regulatory approvals, this comes after the press release with transaction announcement. Similarly, while the company typically issues a press release upon deal closing, this usually comes weeks after the transaction announcement. It is important to note that any of these communications between signing and closing are considered a prospectus and are required to be filed with the SEC.

Why might a buyer prefer an asset sale to a stock sale?

Tax benefits If structured properly, an asset sale may result in meaningful tax benefits for the buyer. In this instance, the assets are written up to a higher value and future depreciation expense results in a tax shield, which provides additional value to the buyer

When a company files for Chapter 11 bankruptcy, what happens to the Board of Directors?

The board remains in tact

FCF Yield

The free cash flow yield is an overall return evaluation ratio of a stock, which standardizes the free cash flow per share a company is expected to earn against its market price per share FCF Yield = FCF per share / Mkt price of share Generally, the lower the ratio, the less attractive the investment is and vice versa. The logic behind this is that investors would like to pay as little price as possible for as many earnings as possible.

For a broker dealer to qualify for the Rule 139 exclusion of issuer-specific research reports, so that publishing these reports is not considered an offering, which issuer requirements must be met? I. The issuer must be a well-known seasoned issuer II. The issuer must meet requirements for using Form S-3 or F-3 III. The issuer must have filed all periodic reports over the last 12 months

The issuer must have filed all periodic reports over the preceding 12 months and the issuer must meet requirements for using Form S-3 or F-3. Seasoned issuers or WKSIs can meet these requirements.

How does a competitive bidding process impact gross spread and coupon?

The process fosters competition among underwriters, thereby driving down gross spread as well as coupon

Credit turnover ratio

The same as A/P turnover ratio COGS/ Accounts payable

Which fee bucket are stabilization fees deducted from?

The underwriting fee All syndicate expenses, including stabilization expenses, are deducted from the underwriting fee.

Tangent Corp. wants to return money to its shareholders. It sells for $25 million a building that it owns and leases the building back at a competitive rent. The $25 million is then distributed to shareholders through a special dividend. How will the company's debt to equity ratio be impacted?

This transaction has the impact of reducing retained earnings (via the dividend payment), which is a component of shareholder's equity. Thus, the ratio will increase i.e., be negatively impacted.

Who is never required to receive an offering circular under a primate placement?

Under 144A, Qualified Institutional Buyers (QIBs) are never required to receive an offering circular. Under Regulation D,

Under the FINRA Corporate Finance Rule, underwriters receiving stock as compensation are required to hold the shares for how many days before they can be sold?

Under FINRA Rule 5110, shares received as compensation are subject to a 180 day holding period before they can be sold. An exception is available if the number of shares being received as compensation is no more than 1% of the total deal size. In that case, there would be no holding period

Which of the following types of domestic issuers may use a free writing prospectus for offerings registered on Form S-3? I. Well-known seasoned issuer (WKSI) II. Seasoned issuer III. Unseasoned issuer

WKSIs and seasoned issuers qualify to use Form S-3 and may use a free writing prospectus. However, only WKSIs are not required to have filed a registration statement and full prospectus prior to publishing the free writing prospectus

Which sorts of bonds are more vulnerable when interest rates and inflation are rising?

When interest rates and inflation are rising, the prices of long-term bonds are more vulnerable to declines than prices of short-term bonds

A FINRA member firm is a syndicate member for a follow-on offering. During the distribution period it is prohibited from which of the following: buying at any price, selling at any price, distributing research, or all of the above?

While underwriting a follow-on offering, Reg M allows a firm to act as a passive market maker and bid no higher than the highest independent bid for the security. Note that the firm is permitted to sell shares and publish research (as long as it is not initiating coverage) during the restricted period.

Company B is pursuing a takeover of Company S. B has entered into previous financing arrangements that require it maintain a maximum net debt to EBITDA ratio of 5X. B has the following: total outstanding debt of 320 million; EBITDA is 100 million; net income of 40 million; current discount rate on debt of 7.5%; and cash and cash equivalents of 25 million. What is the most that B can borrow to acquire S?

With a max net debt to EBITDA ratio of 5X, Company B carry borrow up to 500 million (100 million EBITDA x 5). With its current net debt of 295 million (net debt = 320 million total debt - 25 million in cash and cash equivalents) Company B can borrow up to 205 million and remain within the 5X ratio as required.

A banker's acceptance is issued by a bank holding company. It has a maturity of 30 days. Is it exempt from federal registration?

Yes, bankers acceptances are types of monkey market securities & money market securities with a maturity of <270 days are exempt from registration A banker's acceptance is a money market security issued by a bank or bank holding company. If it is issued by a bank that is supervised by a federal or state authority, it is automatically exempt. If it is issued by a bank holding company, it must have a maturity of 270 days or less to be exempt.

Carol is the placement agent for a private placement, with responsibility for introducing qualified investors to the offering. She invites seven qualified investors to a pitch meeting, at which the investment is presented. If a few of these investors want to bring their friends to the same meeting, is this allowed?

Yes, but only if they are also qualified investors

Company O enters into a Definitive Agreement to purchase Company N. Company O plans to execute the merger via a two-step merger, beginning with a tender offer to Company N shareholders, including the CEO. Contingent on the closing of the deal, the CEO will also be receiving a compensation package for taking on a new role at Company O. This compensation package would be permitted only with approval from

a majority of Company O's compensation committee. If an investor tendering shares also receives additional compensation, such as an employment package, approval is required from the compensation committee of the board who provided the compensation

Control Stock

any security owned by an insider or affiliate (officer, director, or >10% shareholder) of that company. The sale of control stock is subject to volume limitations.

During a contingency underwriting, a Qualified Financial Institution (QFI) is named to hold certain funds in escrow. It is permissible to invest these funds in:

bank savings accounts and bank money market accounts. It is not permissible for escrow funds to be held in money market mutual funds

The founder of ABC Corp., a public company, wants to sell 100,000 of his own shares in a follow-on offering. For the underwriter and investor, what is an advantage of using a private non-competitive block sale, as opposed to a competitive block trade?

better execution at a predictable price In a competitive block trade follow-on offering, the shares will be purchased by a broker-dealer and offered to the public market at the prevailing price. The appearance of a large supply of shares for sale on the tape could negatively impact the share price. This can be avoided by arranging a private non-competitive block sale at a stated price. The downside of this approach can include more concentrated ownership of shares and more regulatory red tape related to a private sale

In an underwriting, a competitive bid is generally used

by primary dealers when purchasing government securities in Treasury auctions. Competitive bids may be used in IPOs and other offerings, though they are typically structured on a negotiated basis. Underwriters retain the risk of distributing the securities if their competitive bids are filled

A broker-dealer uses a fairness committee to review and approve its fairness opinions. What is not required to be documented in written procedures?

how fairness committee members will be compensated, and steps taken to prevent conflicts when such compensation is contingent on deal closing

Under a tender offer scenario, restricted shares

may be tendered without compliance with Rule 144

In a business combination that requires a vote of shareholders to approve a proposed deal, involving a change of securities, a prospectus

must be delivered prior to the vote SEC Rule 153a requires that a prospectus be delivered prior to the vote, in business combinations that depend on a shareholder vote and involve a change of securities

The red-herring for Steelpoint Inc.'s IPO states that the company was founded by two brothers in 2010. After the registration but before the effective date, the company wishes to clarify this information by stating that one brother did not join the company until 2013. Can this correction be made in a free writing prospectus?

no, because it conflicts with information in the red-herring A free writing prospectus is designed to supplement information in the registration and red-herring. It cannot be used to make corrections to material facts in those filings i.e., when it is in conflict with them. The registration and red-herring will need to be amended with the correct facts, and then the free writing prospectus can be used to clarify.

Non-accredited investors and offering circulars for private placements

non-accredited investors are required to receive an offering circular unless it is under Rule 504 (i.e. less than $5mm). In that case, an offering circular is not required for any investors.

Bona Fide Issuer Expenses & their impact on the spread

printing fees, blue sky fees (i.e. state registration) and accounting fees are not considered compensation and therefore don't decrease the spread

The largest portion of the underwriting spread is the

selling concession

A free writing prospectus is required to contain a legend informing investors that

the issuer has filed a registration and prospectus, which should be read before investing legend must be similar to this one: "The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering."

Who populates the data room in an M&A deal?

the sell side advisor