A piggyback registration agreement, also known as a “shelf registration,” is a legal document that allows a company to register securities for sale with the Securities and Exchange Commission (SEC) so that they can be easily sold at a later date. This agreement is commonly used by companies that are looking to raise capital quickly or that anticipate the need for future funding.

Essentially, a piggyback registration agreement allows a company to piggyback on the registration statement of another company that is already registered with the SEC. This can be a great advantage for smaller companies or start-ups that may not have the resources to register their own securities, as the process can be time-consuming and costly.

In order to use a piggyback registration agreement, the company must meet certain requirements set forth by the SEC. For example, the company must be current in its reporting obligations with the SEC, and the securities being registered must be similar to those already registered by the company whose registration statement is being piggybacked on.

Additionally, the company must file its own prospectus or other offering document with the SEC, which must be reviewed and approved before any securities can be sold. The company must also comply with applicable state and federal regulations governing securities sales, such as the Securities Act of 1933 and the Securities Exchange Act of 1934.

One of the main advantages of a piggyback registration agreement is that it allows a company to raise capital quickly and easily, without having to go through the lengthy and costly process of registering its own securities. It also allows smaller companies to take advantage of the greater investor interest generated by larger, well-established companies that are already registered with the SEC.

However, there are also some potential disadvantages to using a piggyback registration agreement. For example, the company may have to share some of the registration costs with the company whose registration statement is being piggybacked on, which can be a significant expense. Additionally, the company may be required to disclose certain information about its business operations and financial condition to the SEC and potential investors, which may be sensitive or confidential.

Overall, a piggyback registration agreement can be a useful tool for companies looking to raise capital quickly and easily. However, it is important for companies to carefully consider their options and consult with legal and financial professionals before entering into such an agreement. By doing so, companies can ensure that they are in compliance with all applicable laws and regulations, and that they are making the best decision for their business and their investors.