Unit 7 Checkpoint

All of the following are exempt issuers except A) the Southwest Railroad Co. B) Alta Loma Community Foundation. C) the City of Alta Loma. D) Modulux, Inc., a home manufacturer.

D) Modulux, Inc., a home manufacturer.

Modulux, Inc., a NYSE listed manufacturing company, was founded by Clarence Mod. Clarence is now 82 years old and is looking to divest his significant interest in Modulux to capitalize the Mod Family Foundation, a charity. He has enlisted the help of Seacoast Securities, a FINRA member broker-dealer based in Seattle, to run the sale. Seacoast Securities is acting as A) an issuer. B) an investment banker. C) a dealer. D) an owner.

B) an investment banker.

Cypress Care Nurseries, Inc., owns and operates a chain of nurseries and is headquartered in Cypress, California. The company is considering selling shares of the company to the public in California. In order to be exempt from registration with the SEC, under Rule 147 it would need to meet several criteria. Which of these is not a listed criterion under Rule 147? A) 80% of the issuer's customers must be located in the state of California. B) 80% of the issuer's proceeds will be used in the state of California. C) 80% of the issuer's assets are located in the state of California. D) 80% of the issuer's revenue must be generated from the state of California.

A) 80% of the issuer's customers must be located in the state of California.

The Big Shoe Sneaker Company is a small manufacturer of athletic shoes. It is selling $100 million of its stock. This will be its first public offering. It will use the money to enhance both marketing and production with a plan to grow the business and obtain a Nasdaq listing in two or three years. After the initial sale of the new shares, buyers of the stock in the over-the-counter market should expect to receive the final prospectus for how many days? A) 90 B) Buyers in the secondary market are never entitled to the IPO prospectus C) 25 D) 40

A) 90

During the cooling-off period the disclosure document that may be delivered to interested parties is called the A) preliminary prospectus. B) summary prospectus. C) final prospectus. D) cool off period prospectus.

A) preliminary prospectus.

The preliminary prospectus for the IPO of the Big Shoes Sneaker Company indicates that the number of shares sold may be increased as much as 15% if market demand is sufficient. This is called a A) Flex offering B) Green Shoe option C) Secondary IPO offering D) Shelf offering

B) Green Shoe option

The ABC Chemical Corporation wishes to advertise its upcoming offering of common stock in a tombstone advertisement that they, the issuer, will place. When placing the tombstone advertisement, which of the following would be least likely to appear? A) The expected price range of the offering B) The names of the investment bankers underwriting the issue C) The total number of shares being offered D) The name of the issuer

B) The names of the investment bankers underwriting the issue

Modulux, Inc., a NYSE listed manufacturer, is offering 5,000,000 shares to the public, which will raise capital to build a new plant. The new technology and design should allow Modulux to increase market share significantly in the modular home business. This offer is A) a secondary offering. B) an APO. C) an IPO. D) a venture offering.

B) an APO.

The Mod Family Foundation is a $500,000,000 charitable foundation headed by Clarence Mod. The foundation is seeking to purchase a large block of WeariTech, Inc., a Nasdaq listed company, for the foundation's portfolio. Seacoast Securities is assisting with this secondary market transaction. In this example, the Mod Family Foundation is A) an issuer. B) an institutional investor. C) a retail investor. D) a venture capitalist.

B) an institutional investor.

GEMCO Oil and Gas, a non-NMS stock, wishing to sell up to $100 million of convertible debt as market conditions permit, files a shelf registration statement with the SEC. Which of these statements are true? I. For securities offered via a shelf registration, a supplemental prospectus must be filed with the SEC before each sale. II. The registration statement is effective upon completion of the cooling-off period. III. Shelf registration allows the issuer to sell portions of a registered shelf offering over a 2-year period without having to reregister the security. IV. Shelf registration allows the issuer to sell portions of a registered shelf offering over a 4-year period without having to reregister the security. A) II and III B) I and IV C) I and III D) II and IV

C) I and III

The SEC has established rules regarding delivery of a prospectus when a secondary market transaction occurs after the effective date. Which of these comply with those rules for initial (IPO) and additional (APO) public offerings? I. An IPO of a stock to be listed on the NYSE requires delivery for a period of 25 days. II. An IPO of a stock that will not be listed nor quoted over Nasdaq requires delivery for a period of 40 days. III. An APO of a stock listed on the NYSE requires delivery for a period of 25 days. IV. An APO of a stock that will not be listed nor quoted over Nasdaq requires delivery for a period of 40 days. A) I and II B) II and III C) I and IV D) III and IV

C) I and IV

Modulux, Inc., a NYSE listed manufacturing company, was founded by Clarence Mod. Clarence is now 82 years old and is looking to divest his significant interest in Modulux to capitalize the Mod Family Foundation, a charity. He has enlisted the help of Seacoast Securities, a regional investment banker based in Seattle, to run the sale. This is an example of A) an IPO. B) an APO. C) a secondary offering. D) a CRUT.

C) a secondary offering.

A corporation seeking to raise funds in order to expand its manufacturing capacity would do so in A) the funding market. B) the currency market. C) the capital market. D) the secondary market.

C) the capital market.

Seacoast Securities is a syndicate member for the initial public offering of WeariTech, Inc., WeariTech is a hot new issue in the wearable technology space. The S-1 registration statement has been filed but the effective date has not yet been released. This is A) the posteffective period. B) the mandated waiting period. C) the cooling-off period. D) the pre-filing period.

C) the cooling-off period.

Which of these may be found in the final prospectus that is not in the preliminary prospectus? Next year's sales Public offer price Release date Planned use of the proceeds A) I and IV B) I and II C) II and IV D) II and III

D) II and III