What SEC Reporting Requirements Apply to a Direct Public Offering?


Exchange Act Reporting After SEC Effectiveness of a Registered Direct Public Offering

Upon completion of a registered direct public offering, the Exchange Act imposes periodic reporting obligations. If the issuer is a domestic issuer subject to SEC reporting requirements then it must file an Annual Report on Form 10-K, 10-Q’s for the three quarters following its fiscal year end and current reports on Form 8-K upon the occurrence of certain material events including bankruptcy, and fundamental changes, changes in accounting, changes in the control and departure of officers, and non-reliance on prior financial statements or audit reports. For those issuers who register a class of securities under the Exchange Act, additional reporting obligations apply. These include the SEC’s proxy rules that require disclosures be made on Schedules 14A or 14C and certain procedures for the solicitation of shareholder votes.  Additionally, shareholders and management must file beneficial ownership reports of their trading activities in the company’s securities.

Regulation A  Reporting After SEC Qualification

If the issuer files a Form 1-A offering statement pursuant to Regulation A that is qualified by the SEC, it must file an exit report on Form 1-Z not later than 30 calendar days after the termination or completion of the offering. Tier 2 issuers must file a Form 1-K within 120 days after the end of its fiscal year and a Form 1-SA within 90 days after the end of its semiannual period. Regulation A issuers must also file a current information report  within four business days of certain material events.

Exchange Act Rule 15c2-11

In addition to imposing, disclosure obligations, the Exchange Act Rule 15c2-11 requires that public companies provide certain public information before a market maker may enter quotations of the issuer’s securities.  Rule 15c2-11 disclosures enable market makers to publish quotations in a company’s securities in the secondary market after a direct public offering has been registered and/or completed.

The Sarbanes-Oxley Act of 2002 establishes corporate governance, corporate accountability and accounting oversight provisions that apply to SEC reporting companies.

State Laws Applicable To Direct Public Offerings

At all times during the registered direct public offering process, the issuer is subject to the corporate laws where it is domiciled.   State corporate laws regulate the creation, organization and dissolution of corporate entities.  State corporate laws require articles of incorporation to document the company’s creation and to provide provisions regarding the management of the corporate entity. Most state corporate laws require the company to adopt bylaws to define the rights and obligations of officers, shareholders, voting groups and other matters.

The state securities laws of the individual states also regulate private and public securities offerings unless the offering is preempted under federal law. Even where offerings are preempted under federal law, states may impose filing fees and notice filing requirements. These filing and notice requirements are imposed by most states for Regulation D offerings.

For further information about this securities law blog post or the SEC reporting requirements for direct public offerings, 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