Rule 12b-25 Q & A l Securities Lawyer 101
Accelerated filers, non-accelerated filers and smaller reporting companies occasionally have difficulty meeting the Securities and Exchange Commission’s (“SEC”) reporting due dates. Rule 12b-25 adopted by the SEC under the Securities Exchange Act of 1934, provides an extension of the SEC’s reporting due dates.
What must an issuer do if it misses the filing due date for a quarterly or annual report?
Rule 12b-25 requires an issuer that is unable to file all or any portion of a quarterly report on Form 10-Q, an annual report on Form 10-K and certain other reports within the prescribed time period to file a Form 12b-25 (informally known as an NT 10-Q, or NT 10-K) with the SEC.
When is the Form 12b-25 due?
The Form 12b-25 must be filed with the SEC no later than one business day after the due date for the late From 10-Q or 10-K report.
How is the Form 12b-25 filed?
The 12b-25 is filed electronically, through the SEC’s EDGAR filing system.
How many days does the Form 12b-25 extend the due date of the issuer’s reports?
Form 12b-25 provides the issuer with 15 additional calendar days to file a late 10-K and five additional calendar days to file a late 10-Q. Moreover, if the late report is filed within the 15-day or five-day extension period, the report is deemed to have been timely filed.
What information must be included in the Form 12b-25?
The issuer must represent that the reason it could not make its filing on Form 10-Q or 10-K timely “could not be eliminated by the registrant without unreasonable effort or expense”; and that the issuer will, in fact, file the report no later than the 15th calendar day following the prescribed due date, in the case of a Form 10-K, or not later than the fifth calendar day following the prescribed due date, in the case of a Form 10-Q. Additionally, the issuer must disclose the reasons for its failure to file in “reasonable detail.” Form 12b-25 requires that the issuer disclose if the failure to file a report timely resulted from the inability of any person other than the issuer–typically, the issuer’s independent public accounting firm–to furnish any required opinion, report or certification. Paragraph (c) of Rule 12b-25 requires the issuer to attach to the Form 12b-25 a statement signed by such person stating the specific reasons why that person was unable to furnish the required opinion, report or certification on time. If the issuer anticipates that any “significant change in results of operations from the corresponding period of the last fiscal year will be reflected in the earnings statements to be included in the report,” then the issuer must disclose the foregoing and attach an explanation of the anticipated changes, both narratively and quantitatively. If appropriate, the issuer must also disclose the reasons that a reasonable estimate of the results cannot be made.
What kinds of reasons for late filings are acceptable? How much detail is “reasonable detail”?
The SEC does not rule on whether an issuer’s stated reasons for a late filing are justifiable or whether the issuer has supplied sufficiently “reasonable” detail of why a report was not timely filed.
Are there negative consequences to filing a Form 12b-25?
As noted, if the conditions of the Rule are met, the issuer is deemed to have made a timely filing even though the report was not filed by the required due date. Issuers have the same duties to be truthful, to disclose all material facts and to avoid material omissions in their Form 12b-25 as they do in any other filings under the federal securities laws. The Form itself states that “Intentional misstatements or omissions of fact constitute Federal Criminal Violations. (See 18 U.S.C. 1001.)”
Can a 12b-25 be renewed by a second filing?
No. Issuers receive only one automatic extension per filing. In the absence of extraordinary circumstances, which are determined in the sole discretion of the SEC’s staff, no further extensions are available.
What happens if the issuer fails to file the report by the extended due date?
The obligation to file annual and quarterly reports originates in Section 13 or 15(d) of the Exchange Act, and the rules promulgated thereunder (see Rule 13a-1 and Rule 13a-13). The SEC may enforce its rules by instituting enforcement actions against a delinquent issuer and/or its officers and directors seeking monetary or other penalties, including revoking the issuer’s registration pursuant to Section 12(j) of the Exchange Act.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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