What Are the Reporting Obligations After My Form S-1 ls Effective?
Once the SEC staff declares your company’s Securities Act registration statement effective, the company becomes subject to Exchange Act reporting requirements. These rules require your company to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC on an ongoing basis.
If your company qualifies as a “smaller reporting company” or an “emerging growth company,” it will be eligible to follow scaled disclosure requirements for these reports.
Once your company begins reporting, it will be required to continue reporting unless it satisfies one of the following “thresholds,” in which case its filing obligations are suspended:
♦ your company has fewer than 300 shareholders of record of the class of securities offered (1,200 shareholders of record if your company is a bank or bank holding company); or
♦ your company has fewer than 500 shareholders of record of the class of securities offered and less than $10 million in total assets for each of its last three fiscal years.
If your company is subject to Exchange Act reporting requirements, it must file with the SEC much of the same information about the company as is required in the registration statement for a public offering, described above.
All of this information must be filed electronically with the SEC through its EDGAR system, and will immediately become publicly available upon filing. Your company’s CEO and CFO must certify the financial and certain other information contained in annual reports on Form 10-K and quarterly reports on Form 10-Q.
Your company must file current reports on Form 8-K to report a wide range of specified events, some within four business days after occurrence of the event. Examples of the events that trigger this requirement are:
♦ entry into and termination of a material definitive agreement (a copy of the agreement must also be publicly filed);
♦ completion of an acquisition or disposition of assets;
♦ notice of a delisting or failure to satisfy a continued listing rule or standard or transfer of listing;
♦unregistered sales of equity securities;
♦ material modifications to rights of security holders;
♦ changes in your company’s certifying accountant;
♦ changes in control of the company;
♦ election of directors, appointment of principal officers, and departure of directors and principal officers; and
♦ amendments to charter and bylaws.
Exchange Act registration requirements
Even if your company has not issued securities under a registration statement declared effective by the SEC staff, it could still become an SEC reporting company. In general, your company will be required to file a registration statement under Section 12 of the Exchange Act registering the pertinent class of securities if:
♦ it has more than $10 million in total assets and a class of equity securities, like common stock, that is held of record by either (1) 2,000 or more persons or (2) 500 or more persons who are not accredited investors; or
♦ it lists the securities on a U.S. exchange.
For banks and bank holding companies, the threshold is 2,000 or more holders of record; the separate registration trigger for 500 or more non-accredited holders of record does not apply.
In calculating the number of holders of record for purposes of determining whether Exchange Act registration is required, your company may exclude persons who acquired their securities under an employee compensation plan in a transaction that was exempt from Securities Act registration. Once the SEC adopts rules to permit crowdfunding as contemplated by the JOBS Act, which we describe in more detail below, your company will also be able to exclude holders of securities issued under the JOBS Act crowdfunding exemption.
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 and compliance 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.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855