What is Form 10 Information? Going Public Attorneys
Form 10 is a Registration Statement used to register a class of securities pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”). This blog post addresses common questions we receive from clients about Form 10 registration statements. All companies can register a class of securities on Form 10 regardless of whether they are private companies or publicly traded. This blog post addresses the most common questions we receive about Form 10 registration statements.
A. Companies with more than $10 million of total assets and over the applicable minimum number of holders of their equity securities must register that class of equity securities under the Exchange Act. For companies that are banks or bank holding companies, there must be more than 2,000 holders of record of the class of equity securities. For companies that are not banks or bank holding companies, there must be either more than 2,000 holders of record of the class of equity securities or more than 500 record holders of the class of equity securities that aren’t accredited investors. If a company meets these thresholds it will be required to register a class of securities under the Exchange Act even if it does not seek to list on the NYSE or NASDAQ.
Q. Can an issuer voluntarily file a registration statement on Form 10?
A. Yes, an issuer can voluntarily file a Form 10.
Q. When does a registration statement on Form 10 become effective?
A. Form 10 registration statements become effective sixty days after the initial filing date regardless of whether there are outstanding SEC comments.
A. Upon effectiveness of a Form 10 registration statement, the issuer becomes subject to the reporting requirements of the Exchange Act and is obligated to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally, unlike effectiveness of a registration statement on Form S-1, effectiveness of a Form 10 registration statement causes the issuer to be subject to Exchange Act Section 14’s proxy rules. Additionally, the effectiveness of a company’s registration statement on Form 10 causes its management and shareholders to be subject to the beneficial reporting requirements of Sections 13 and 16 of the Exchange Act.
Q. If my company files a registration statement on Form 10 will its stock become free trading?
A. No, unlike a registration statement on Form S-1, Form 10 registration does not register a securities offering or transaction pursuant to Section 5 of the Securities Act of 1933, as amended (the “Securities Act”). As such, a Form 10 registration statement will not cause restricted securities to become unrestricted.
Q. Does the filing of a Form 10 registration statement result in the assignment of a ticker symbol?
A. Even though an effective Form 10 registration statement causes an issuer to become subject to the reporting requirements of the Exchange Act, a Form 10 registration statement does not make a company public or result in assignment of a ticker symbol.
Q. If a company files a Form 10 will it still need FINRA approval prior to a ticker being assigned?
A. Yes, a Form 10 registration statement does not eliminate FINRA’s requirements for trading or quotation.
Q. How does a company obtain a ticker symbol after filing a registration statement on Form 10?
A. FINRA assigns ticker symbols and the company must meet FINRA requirements which vary depending upon whether the company will trade on the OTCMarkets Pink Sheets, OTCQB. OTCQX or an exchange such as NASDAQ, AMEX or NYSE. Generally, among other things, the Company must have 25 shareholders with unrestricted shares and locate a sponsoring market maker to submit a Form 211 on its behalf.
Q. If a company files a Form 10 does it meet the informational requirements of SEC Rule 15c-211?
A. Yes, assuming the information in the Form 10 registration statement is complete and current.
Q. What Information is required in a Form 10 Registration Statement?
Form 10 information includes substantially the same disclosures required by a Form S-1 registration statement under the Securities Act of 1933, as amended. These disclosures include financial statements and narrative disclosures about the issuer, its management and its securities. It is intended to provide disclosure of all relevant material information necessary for an investor to make an investment decision.
Q. Does a Form 10 registration statement cure “public shell company” status for purposes of Rule 144 for an issuer which engaged in a reverse merger with a public shell?
A. A Form 10 registration status can cure public shell company status and has been used by many companies after reverse mergers. Rule 144 is available to shareholders of former shell companies if:
- the company is no longer a shell company;
- the shell company must be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
- the shell company must have filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; or
- the shell company must have filed all and have filed current “Form 10 information” with the Commission reflecting its status as an entity that is no longer a shell company.
Q. What is a shell company?
A. A shell company is an issuer with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents or assets consisting of any amount of cash and cash equivalents and nominal other assets.
Q. If a non-reporting company was a shell company twenty years ago, is it required to file a Form 10 to cure its shell status for purposes of its shareholders having the ability to rely upon Rule 144’s safe harbor?
A. Yes, if a non-reporting entity was a shell company during any time in its history, it must either file a Form 10 registration statement or a registration statement on Form S-1 in order for its shareholders to rely upon Rule 144.
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
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