Daniel P. Adams

New York, NY—Many life science firms, technology companies and other businesses are facing liquidity and capital resource constraints. The reason? Ongoing market turmoil has resulted in increased volatility that has subsequently shut down traditional methods of raising capital. In comes “at the market” or ATMs providing a somewhat efficient means of raising measured amounts of equity capital over time by allowing a company to tap into the existing secondary market for its shares as needed. Increasingly REITs are also turning to this channel for liquidity.

In an ATM offering program, an exchange-listed company systematically sells newly issued shares into the trading market through a preferred broker-dealer at current market prices instead of through a traditional underwritten offering of a fixed number of shares at a fixed price all at once. Their use and allure have significantly risen over the last few years because of the Securities Act Reform regulations adopted by the SEC in December 2005, which streamlined the procedural hurdles for conducting an ATM offering program, according to Daniel P. Adams, partner and co-chair of Capital Markets at Goodwin.

“At the beginning of 2019, Goodwin observed that at least 115 public REITs had ATM programs in place, covering the sale of nearly $40 billion,” he tells GlobeSt.com.