A company that has been publicly reporting for 18 months but has a public float of only $50 million wants to conduct a primary offering of common stock. Which statement is most accurate?

AThe company cannot use Form S-3 for a primary offering because its public float is below the $75 million threshold, though it may use S-3 for certain other transaction types✓ Correct answer
BThe company can use Form S-3 because it has been reporting for more than 12 months
CThe company must use Form S-4 because it does not qualify for S-3
DThe company can use Form S-3 if it limits the offering to $50 million

Explanation

Why A — The company cannot use Form S-3 for a primary offering because its public float is below the $75 million threshold, though it may use S-3 for certain other transaction types

For primary offerings on Form S-3, the issuer generally must have a public float of at least $75 million (referred to as the 'General Instruction I.B.1' threshold). A company with a $50 million float would not meet this requirement for a primary offering. However, Form S-3 can still be used for certain transaction types regardless of float size, such as secondary offerings by selling shareholders or offerings of investment-grade debt securities.

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