Staying Current: Late Filings and Foreign Issuer Reports

Full Transcript

Welcome to Securities Lawyer 101, the podcast from Hamilton and Associates Law Group in Boca Raton, Florida. Today we're talking about what happens when a filing is going to be late, why staying current matters so much, and how reporting works for foreign private issuers.

Let's start with late filings. Sometimes an audit runs long or a key number isn't final. When that happens, a company can file a Form twelve-b-twenty-five, often called a notification of late filing, no later than one business day after the report's due date. If the company then files the report within the extension period, fifteen calendar days for a ten-K or five calendar days for a ten-Q, the report is treated as timely for many purposes. But the extension does not eliminate all consequences during the extension period.

The twelve-b-twenty-five is a safety valve, not a plan. If a company misses the extended deadline too, it becomes delinquent, and the consequences stack up.

During the extension period, a company cannot file a new registration statement on Form S-three until the overdue report is actually filed. If the company misses the extended deadline, it can also lose S-three eligibility until it reestablishes the required reporting history. Its shareholders may temporarily lose the ability to rely on Rule one-forty-four if the company is not current in its public information, because the rule requires adequate current public information about the company. On the O-T-C Markets, a delinquent company can be moved to a lower tier, and broker-dealers may be unable to continue quoting its stock. On a national exchange, a late filing triggers a deficiency notice and a deadline to regain compliance. And for companies that fall seriously behind, the SEC can suspend trading or bring proceedings to revoke the registration of the company's securities.

In short, staying current protects your shareholders' liquidity and your access to capital.

Now, foreign private issuers. As we discussed in an earlier episode, qualifying foreign companies follow a different reporting system. Instead of the ten-K, they file an annual report on Form twenty-F, generally due within four months after fiscal year end. Instead of the ten-Q and eight-K, they furnish reports on Form six-K. A six-K generally covers material information the company makes or is required to make public in its home country, files or is required to file with a foreign stock exchange, or distributes or is required to distribute to its shareholders.

That means a foreign private issuer's U.S. disclosure is closely tied to its home-country practice. If it publishes interim results or announces a significant transaction at home, a six-K usually follows. Foreign private issuers listed on a U.S. exchange also have to meet that exchange's requirements, which can call for more frequent reporting.

Whether your company files ten-Ks or twenty-Fs, the formula for staying current is the same: a clear calendar, an auditor engaged early, internal deadlines ahead of SEC deadlines, and a disclosure team that knows when to raise its hand.

When a delay becomes possible, management should determine the cause and the likely completion date before filing the twelve-b-twenty-five. The notification requires an explanation and may require the company to address expected changes in results. It should not be treated as an automatic five- or fifteen-day extension with no disclosure consequences. The company, auditor, counsel, audit committee, and exchange should coordinate early.

Repeated late filings often reveal a deeper control problem. Common causes include weak closing procedures, turnover in finance staff, unresolved accounting issues, incomplete subsidiary records, or delayed auditor access to evidence. Filing the missing report fixes the immediate delinquency, but it does not fix the process. The board should ask what failed, who owns the corrective action, and whether prior disclosures or internal-control conclusions need to be reconsidered.

Foreign private issuers need a similar escalation system across jurisdictions. A home-country announcement, exchange filing, or shareholder communication may create a Form six-K obligation in the United States. Local management and U.S. securities counsel therefore need a reliable channel for sharing material information before, or immediately when, it is released. The form numbers differ, but the operational principle is the same: current reporting depends on early identification, clear responsibility, and records that can support the disclosure.

If a company is already delinquent, the first priority is an accurate recovery schedule. That schedule should identify every missing report, dependencies among them, audit or review work, amendment needs, exchange deadlines, and public communications. Promising a date without confirming the accounting work can compound the problem. A credible plan uses milestones that management, the board, auditor, and counsel can verify.

That's it for this episode. If your company is behind on its filings or wants a better compliance process, call Hamilton and Associates Law Group at five six one, four one six, eight nine five six, or visit Securities Lawyer 101 dot com to speak with a securities attorney. This podcast is for general information only. It is not legal advice, and listening does not create an attorney-client relationship. Securities rules change, so speak with qualified counsel about your specific situation.