[Federal Register Volume 73, Number 3 (Friday, January 4, 2008)]
[Rules and Regulations]
[Pages 934-983]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24965]
[[Page 933]]
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Part II
Securities and Exchange Commission
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17 CFR Parts 210, 228 et al.
Smaller Reporting Company Regulatory Relief and Simplification; Final
Rule
Federal Register / Vol. 73, No. 3 / Friday, January 4, 2008 / Rules
and Regulations
[[Page 934]]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 210, 228, 229, 230, 239, 240, 249, 260, and 269
[Release Nos. 33-8876; 34-56994; 39-2451; File No. S7-15-07]
RIN 3235-Aj86
Smaller Reporting Company Regulatory Relief and Simplification
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
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SUMMARY: The Securities and Exchange Commission is adopting amendments
to its disclosure and reporting requirements under the Securities Act
of 1933 and the Securities Exchange Act of 1934 to expand the number of
companies that qualify for its scaled disclosure requirements for
smaller reporting companies. Companies that have less than $75 million
in public equity float will qualify for the scaled disclosure
requirements under the amendments. Companies without a calculable
public equity float will qualify if their revenues were below $50
million in the previous year. To streamline and simplify regulation,
the amendments move the scaled disclosure requirements from Regulation
S-B into Regulation S-K.
DATES: Effective Date: February 4, 2008, except for amendments Sec.
249.308b and Form 10-QSB, which are effective October 31, 2008, and
amendments Part 228, Sec. 249.310b, and Form 10-KSB, which are
effective March 15, 2009.
Compliance Dates: For information on compliance, see the
SUPPLEMENTARY INFORMATION section below.
FOR FURTHER INFORMATION CONTACT: Kevin M. O'Neill, Special Counsel, or
Johanna Vega Losert, Attorney-Advisor, Office of Small Business Policy,
Division of Corporation Finance, Securities and Exchange Commission,
100 F Street, NE., Washington, DC 20549-3628, (202) 551-3460.
SUPPLEMENTARY INFORMATION: After the effective date of the rule
amendments, companies currently qualifying as ``small business
issuers'' under Regulation S-B will have the option to file their next
annual report for a fiscal year ending on or after December 15, 2007 on
either Form 10-KSB, using the scaled disclosure requirements in
Regulation S-B, or Form 10-K, using the new scaled disclosure
requirements in Regulation S-K. After a ``small business issuer'' files
that next annual report, it will be required to file quarterly reports
on Form 10-Q and annual reports on Form 10-K, and may elect to comply
with the new scaled disclosure requirements of Regulation S-K.
Companies newly qualifying as ``smaller reporting companies'' will have
the option to use the new scaled Regulation S-K requirements when
filing their next periodic report due after the effective date of the
amendments. These companies will determine eligibility for smaller
reporting company status based on the last business day of their most
recent second fiscal quarter, or based on the alternative initial
registration statement calculation discussed in Section IV. If a
registration statement was filed on an ``SB'' form before the effective
date of the rule amendments, and the company seeks to amend it after
the effective date of the rule amendments, the company must file the
amendment on the appropriate form available to the issuer without an
``SB'' designation. As discussed in Section IV, to provide a transition
period, these issuers will be able to continue using the disclosure
format and content based on the ``SB'' form until six months after the
effective date.
We are adopting amendments to Regulation S-K,\1\ and rules and
forms under the Securities Act of 1933,\2\ Securities Exchange Act of
1934,\3\ and Trust Indenture Act of 1939.\4\ In Regulation S-K, we are
adopting amendments to Items 10, 101, 102, 201, 301, 302, 303, 305,
401, 402, 404, 407, 503, 504, 512, 601, 701, and 1118.\5\ We are
adopting amendments to Securities Act Rules 110, 138, 139, 158, 175,
405, 415, 428, 430B, 430C, 455, and 502.\6\ Further, we are rescinding
Regulation S-B \7\ and eliminating the forms associated with it, Forms
SB-1, SB-2, 10-SB, 10-QSB, and 10-KSB.\8\ We are amending Securities
Act Forms 0-1, S-1, S-3, S-4, S-8, S-11, 1-A, and F-X,\9\ Exchange Act
Rules 0-2, 0-12, 3b-6, 10A-1, 10A-3, 12b-2, 12b-23, 12b-25, 12h-3, 13a-
10, 13a-13, 13a-14, 13a-16, 13a-20, 14a-3, 14a-5, 14a-8, 14c-3, 14d-3,
15d-10, 15d-13, 15d-14, 15d-20, and 15d-21,\10\ and Exchange Act Forms
0-1, 8-A, 8-K, 10, 10-Q, 10-K, 11-K, 20-F, and SE.\11\ We are amending
Schedules 14A and 14C.\12\ In Regulation S-X,\13\ we are amending Rules
210.3-01, 210.3-05, 210.3-10, 210.3-12, 210.3-14, 210.4-01, and 210.10-
01 and adding a new Article 8 containing thefinancial statement
requirements available to smaller reporting companies.\14\ Finally, we
are amending Trust Indenture Act Rules 0-11, 4d-9, and 10a-5 \15\ and
Section 269.0-1 of the Trust Indenture Act Forms.\16\
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\1\ 17 CFR 229.10-229.1123.
\2\ 15 U.S.C. 77a et seq.
\3\ 15 U.S.C. 78a et seq.
\4\ 15 U.S.C. 77aaa et seq.
\5\ 17 CFR 229.10, 229.101, 229.102, 229.201, 229.301, 229.302,
229.303, 229.305, 229.401, 229.402, 229.404, 229.407, 229.503,
229.504, 229.512, 229.601, 229.701, and 229.1118.
\6\ 17 CFR 230.110, 230.138, 230.139, 230.158, 230.175, 230.405,
230.415, 230.428, 230.430B, 230.430C, 230.455, and 230.502.
\7\ 17 CFR 228.10-228.703.
\8\ 17 CFR 239.9, 239.10, 249.210b, 249.308b, and 249.310b.
\9\ 17 CFR 239.0-1, 239.11, 239.13, 239.25, 239.16b, 239.18,
239.90, and 239.42.
\10\ 17 CFR 240.0-2, 240.0-12, 240.3b-6, 240.10A-1, 240.10A-3,
240.12b-2, 240.12b-23, 240.12b-25, 240.12h-3, 240.13a-10, 240.13a-
13, 240.13a-14, 240.13a-16, 240.13a-20, 240.14a-3, 240.14a-5,
240.14a-8, 240.14c-3, 240.14d-3, 240.15d-10, 240.15d-13, 240.15d-14,
240.15d-20, and 240.15d-21.
\11\ 17 CFR 249.0-1, 249.208a, 249.210, 249.308, 249.308a,
239.310, 249.311, 249.220f, and 249.444.
\12\ 17 CFR 240.14a-101 and 240.14c-101.
\13\ 17 CFR 210.3-01--210.12-29.
\14\ 17 CFR 210.3-01, 210.3-05, 210.3-10, 210.3-12, 210.3-14,
210.4-01, 210.10-01, and new Article 8 210.8-01-8-08.
\15\ 17 CFR 260.0-11, 260.4d-9, and 260.10a-5.
\16\ 17 CFR 269.0-1.
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Table of Contents
I. Background and Summary
II. Description of Proposed Amendments
III. Discussion of Amendments We Are Adopting
A. Moving Scaled Disclosure Item Requirements From Regulation S-
B Into Regulation S-K
B. Moving Smaller Reporting Company Financial Statement
Requirements From Item 310 of Regulation S-B Into New Article 8 of
Regulation S-X; Additional Regulation S-X Changes
C. Adopting Scaled Disclosure Item Requirements in Regulation S-
K
1. Overview
2. Electing Scaled Disclosure Standards on ``A La Carte'' Basis
D. Eliminating ``SB'' Forms Associated with Regulation S-B
E. Qualifying Standards for Treatment as ``Smaller Reporting
Company''
1. Eligibility and Exclusions
2. Determination Dates
a. Reporting Companies
b. Non-Reporting Companies Filing an Initial Registration
Statement
c. Alternative Revenue Test for Reporting and Non-Reporting
Companies
d. Entering and Exiting Smaller Reporting Company Status
F. Miscellaneous
1. Indexing for Inflation
2. Eliminating Transitional Small Business Issuer Format
3. Checking the ``Smaller Reporting Company'' Box
IV. Compliance Dates
V. Paperwork Reduction Act
A. Background
B. Summary of Comment Letters and Revisions to the Proposals
VI. Cost-Benefit Analysis
[[Page 935]]
A. Background
B. Summary of Rules
C. Benefits
D. Costs
VII. Consideration of Impact on the Economy, Burden on Competition
and Promotion of Efficiency, Competition and Capital Formation
VIII. Final Regulatory Flexibility Act Analysis
A. Reasons for and Objectives of Amendments
1. The Advisory Committee on Smaller Public Companies
Recommended Scaled Federal Securities Regulation for Smaller
Companies
2. Expanding Eligibility for Smaller Company Scaled Regulation
Under Amended Regulation S-K
3. Integrating Substantive Requirements of Regulation S-B Into
Regulations S-K and S-X
B. Significant Issues Raised by Public Comment
C. Small Entities Subject to the Final Amendments
D. Reporting, Recordkeeping, and Other Compliance Requirements
E. Agency Action to Minimize Effect on Small Entities
IX. Statutory Basis and Text of Amendments
I. Background and Summary
At an open Commission meeting on May 23, 2007, we approved
publication of eight releases designed to update and improve federal
securities regulations that significantly affect smaller companies and
their investors in today's capital markets.\17\ These releases
reflected our efforts during the past few years to provide responsive
solutions addressing the special characteristics and needs of smaller
companies and their investors. One of the releases (the ``Proposing
Release'') proposed rule amendments intended to provide general
regulatory relief and simplification for smaller companies reporting
under our rules.\18\ In that release, we proposed a series of
amendments to our scaled disclosure and reporting requirements for
smaller reporting companies. The release had three stated objectives:
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\17\ These releases included (1) Release No. 33-8812 (June 20,
2007) [72 FR 35118] (proposing to expand eligibility requirements of
Forms S-3 and F-3 to permit registration of annual primary offerings
of up to a specified percentage of public float by companies with a
public float of less than $75 million). The Commission voted to
approve this proposal at a December 11, 2007 open meeting (archived
webcast available at http://www.sec.gov/news/openmeetings.shtml);
(2) Release No. 33-8813 (June 22, 2007) [72 FR 36822] (proposing
amendments to Rule 144 to revise the holding period for the resale
of restricted securities, simplify compliance for non-affiliates,
revise the Form 144 filing thresholds, and codify certain staff
interpretations, as well as to amend Rule 145). This proposal was
adopted in Release No. 33-8869 (Dec. 6, 2007) [72 FR 71546]; (3)
Release No. 33-8814 (June 29, 2007) [72 FR 37376] (proposing
revisions to Form D and to mandate electronic filing of Form D). The
Commission voted to approve this proposal at the December 11, 2007
open meeting (archived webcast available at http://www.sec.gov/news/openmeetings.shtml); (4) Release No. 33-8819 (July 5, 2007) [72 FR
39670] (proposing to increase the number of companies eligible for
our scaled disclosure and reporting requirements for smaller
companies); (5) Release No. 33-8828 (Aug. 3, 2007) [72 FR 45116]
(proposing new Regulation D exemption for offers and sales of
securities to a newly defined category of ``large accredited
investors,'' as well as proposing revisions to the Regulation D
definition of ``accredited investor,'' disqualification provisions,
and integration safe harbor); (6) Release No. 34-56010 (July 5,
2007) [72 FR 37608] (proposing exemptions from requirement to
register class of securities for compensatory stock options granted
by reporting and non-reporting companies). This proposal was adopted
in Release No. 34-56887 (Dec. 3, 2007) [72 FR 69554]; (7) Release
No. 33-8810 (June 20, 2007) [72 FR 35324] (providing interpretive
guidance regarding management's report on internal control over
financial reporting under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934); and (8) Release No. 33-8811 (June 20, 2007)
[72 FR 35346] (requesting additional comment on the definition of a
significant deficiency). The last proposal was adopted in Release
No. 33-8829 (Aug. 3, 2007) [72 FR 44927] (adopting definition of
``significant deficiency'').
\18\ Release No. 33-8819 (July 5, 2007) [72 FR 39670].
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Expanding the number of smaller companies eligible to use
scaled disclosure requirements;
Reducing unnecessary complexity in our regulations by
combining the category of ``small business issuers'' with the category
of ``non-accelerated filers'' to the extent feasible; and
Simplifying disclosure requirements by moving our scaled
disclosure requirements for smaller companies from Regulation S-B into
Regulation S-K, the integrated disclosure system for other companies.
Several of the amendments in the Proposing Release had their
genesis in the recommendations made by the Advisory Committee on
Smaller Public Companies in 2006. The Commission had chartered the
Advisory Committee in March 2005 to assess the current regulatory
system for smaller companies under the federal securities laws and make
recommendations for changes.\19\ Among the specific charges of the
Committee was to consider the corporate disclosure and reporting
requirements for smaller companies, including differing regulatory
requirements based on market capitalization, and other measurements of
size or market characteristics.\20\ In its Final Report, the Advisory
Committee made several recommendations relating to scaling securities
regulation for smaller companies and labeled them as priority
items.\21\
In 2006, 3,395 reporting companies elected to take advantage of our
current scaled disclosure and reporting requirements for small business
issuers by filing their annual reports on Form 10-KSB.\22\ We estimate
that a total of 4,976 companies will be eligible to use our scaled
disclosure requirements under today's amendments, a difference of 1,581
additional companies.\23\ The 1,581 companies would represent about 13%
of the total 11,898 reporting companies that filed annual reports with
us in 2006.
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\19\ See SEC Advisory Committee on Smaller Public Companies,
Final Report (2006) (``Advisory Committee Final Report''), available
at http://www.sec.gov/info/smallbus/acspc.shtml.
\20\ Advisory Committee Final Report (p. 1).
\21\ Advisory Committee Final Report Recommendations II.P.1 (pp.
14-22), IV.P.1 (pp. 60-64), and IV.P.2 (pp. 65-68).
\22\ As stated in the Proposing Release, these statistics are
based on 2006 data from the Commission's EDGAR (Electronic Data
Gathering, Analysis and Retrieval) filing system.
\23\ As we noted in the Proposing Release, these statistics are
based on Thomson Financial (Datastream). The data includes available
information on registered public firms trading on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq, the Over-the-
Counter Bulletin Board, and the Pink Sheets and excludes closed end
funds, exchange traded funds, American depositary receipts, and
direct foreign listings.
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The amendments that we are adopting address the need to revisit and
adjust the Commission's small company policies to reflect changes in
our securities markets as well as changes to the regulatory landscape
since 1992, when the Commission first adopted an integrated scaled
disclosure system for small business in Regulation S-B.\24\ The
Commission adopted Regulation S-B and its associated Forms SB-1 and SB-
2 based upon the success of Form S-18, which was a simplified
registration form for smaller companies under the Securities Act that
preceded Forms SB-1 and SB-2.\25\ Regulation S-B was designed to reduce
compliance costs and improve the ability of start-ups and other small
businesses to obtain financing through the public capital markets.
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\24\ See Release No. 33-6949 (July 30, 1992) [57 FR 36442].
\25\ The Commission adopted Forms SB-1 and SB-2 after 10 years
of issuers using Form S-18, an experimental form the Commission
created to benefit small issuers in raising capital. Release No. 33-
6924, p. 40 (Mar. 20, 1992) [57 FR 9768].
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The amendments we are adopting will result in the substantive
changes highlighted below. The new provisions:
Establish a category of ``smaller reporting companies''
eligible to use our scaled disclosure requirements. The primary
determinant for eligibility will be that the company have less than $75
million in public float. When a company is unable to calculate public
float, however, such as if it has no common equity outstanding or no
[[Page 936]]
market price for its outstanding common equity exists at the time of
the determination, the standard will be less than $50 million in
revenue in the last fiscal year;
Move 12 non-financial scaled disclosure item requirements
from Regulation S-B into Regulation S-K.\26\ These scaled requirements
will be available only for smaller reporting companies. The remaining
24 item requirements of Regulation S-B \27\ are substantially the same
as their corresponding Regulation S-K item requirements. We therefore
are not amending them except in one minor instance explained below;
\28\
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\26\ The 12 scaled item requirements are: (1) Description of
Business (Item 101); (2) Market Price of and Dividends on
Registrant's Common Equity and Related Stockholder Matters (Item
201); (3) Selected Financial Data (Item 301); (4) Supplementary
Financial Information (Item 302); (5) Management's Discussion and
Analysis of Financial Condition and Results of Operations (Item
303); (6) Quantitative and Qualitative Disclosures about Market Risk
(Item 305); (7) Executive Compensation (Item 402); (8) Transactions
with Related Persons, Promoters and Certain Control Persons (Item
404); (9) Corporate Governance (Item 407); (10) Prospectus Summary,
Risk Factors, and Ratio of Earnings to Fixed Charges (Item 503);
(11) Use of Proceeds (Item 504); and (12) Exhibits (Item 601).
\27\ We did not propose changes to the following items of
Regulation S-K because we believe our analysis showed that the
disclosure standards in these items currently are substantially the
same as the Regulation S-B requirements: (1) Description of Property
(Item 102); (2) Legal Proceedings (Item 103); (3) Description of
Registrant's Securities (Item 202); (4) Changes In and Disagreements
with Accountants on Accounting and Financial Disclosure (Item 304);
(5) Disclosure Controls and Procedures (Item 307); (6) Internal
Control Over Financial Reporting (Item 308); (7) Internal Control
Over Financial Reporting (Item 308T); (8) Directors, Executive
Officers, Promoters and Control Persons (Item 401); (9) Security
Ownership of Certain Beneficial Owners and Management (Item 403);
(10) Compliance with Section 16(a) of the Exchange Act (Item 405);
(11) Code of Ethics (Item 406); (12) Forepart of Registration
Statement and Outside Front Cover Page of Prospectus (Item 501);
(13) Inside Front and Outside Back Cover Pages of Prospectus (Item
502); (14) Determination of Offering Price (Item 505); (15) Dilution
(Item 506); (16) Selling Security Holders (Item 507); (17) Plan of
Distribution (Item 508); (18) Interest of Named Experts and Counsel
(Item 509); (19) Disclosure of Commission Position on
Indemnification for Securities Act Liabilities (Item 510); (20)
Other Expenses of Issuance and Distribution (Item 511); (21) Recent
Sales of Unregistered Securities; Use of Proceeds from Registered
Securities (Item 701); (22) Indemnification of Directors and
Officers (Item 702); and (23) Purchases of Equity Securities by the
Issuer and Affiliated Purchasers (Item 703). In addition, although
we proposed to amend Undertakings (Item 512), we are not adopting
this change because we believe it is clear which undertakings may
and may not apply to a smaller reporting company.
\28\ See the discussion of Description of Property (Item 102)
below. In addition, we are making technical changes to numerous item
requirements to remove references to Regulation S-B and its
associated ``SB'' forms.
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Move the scaled financial statement requirements in Item
310 of Regulation S-B into new Article 8 of Regulation S-X, and amend
these requirements to provide a scaled disclosure option for smaller
reporting companies, requiring two years of balance sheet data instead
of one year, and make other minor adjustments after considering
comments we received; \29\
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\29\ The amendments also rescind Regulation S-B, since all of
its substantive requirements will now be contained in Regulation S-K
or new Article 8 of Regulation S-X.
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Permit smaller reporting companies to elect to comply with
scaled financial and non-financial disclosure on an item-by-item or ``a
la carte'' basis. As adopted, eligible companies may elect to follow
scaled financial statement requirements or to provide the larger
company financial statement presentation on a quarterly basis, rather
than require companies to elect the full fiscal year's financial
presentation in the first quarterly report of the fiscal year, as was
proposed;
Eliminate our current ``SB'' forms but allow a phase-out
period for small business issuers transitioning to smaller reporting
company status;
Combine elements relating to the accelerated filer
definition with qualifying standards for the smaller reporting company
determination and transition provisions to promote uniformity and
consistency with current regulations and, therefore, simplify
regulation;
Permit all foreign companies to qualify as ``smaller
reporting companies'' if they otherwise qualify and choose to file on
domestic company forms and provide financial statements prepared in
accordance with U.S. Generally Accepted Accounting Principles (``U.S.
GAAP''); and
Eliminate the transitional small business issuer format.
II. Description of Proposed Amendments
We proposed an eligibility standard for our scaled disclosure
requirements for ``smaller reporting companies'' to replace the ``small
business issuer'' definition found in Item 10 of Regulation S-B.\30\
Under the proposals, the new definition of ``smaller reporting
company'' would have established eligibility for companies with less
than $75 million in public common equity float. We provided an
alternative revenue test for those companies unable to calculate public
common equity float, basing eligibility on whether the company had
annual revenues of less than $50 million in its last fiscal year. In
contrast, our previous eligibility requirements for ``small business
issuer'' status required that companies have both less than $25 million
in public common equity float and less than $25 million in annual
revenues.
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\30\ 17 CFR 228.10.
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Under the proposals, which we are adopting in modified form, each
company would determine its eligibility based on whether the company
is: (1) A reporting company already filing periodic and annual reports;
\31\ (2) a non-reporting company filing a registration statement under
either the Securities Act or Exchange Act; or (3) a reporting or non-
reporting company that had no public float, such as if it had no public
common equity outstanding or no market price for its common equity
existed. A reporting company determining its eligibility as a smaller
reporting company would calculate its public float as of the last
business day of its most recently completed second fiscal quarter. Non-
reporting companies filing a registration statement would calculate
their public float as of a date within 30 days of the date of the
filing of the registration statement.
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\31\ A reporting company is required to file reports under
Section 13(a) and 15(d) of the Exchange Act. 15 U.S.C. 78m and 15
U.S.C. 78o.
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Under the proposals, investment companies and asset-backed issuers
would be excluded from eligibility for smaller reporting company
status, as was the case under the definition of ``small business
issuer'' in Regulation S-B.\32\ As proposed, foreign companies could
qualify as smaller reporting companies and provide scaled disclosure if
they elected to use domestic company forms and provide financial
statements prepared in accordance with U.S. GAAP. Removing the
exclusion of foreign companies would make scaled treatment available to
additional smaller companies.\33\
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\32\ Item 10(a)(1)(iii) of Regulation S-B, 17 CFR
228.10(a)(1)(iii).
\33\ Item 10(a)(1)(ii) of Regulation S-B only permits U.S. or
Canadian issuers to qualify as ``small business issuers.''
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We proposed that smaller reporting companies be required to exit
the scaled disclosure system the fiscal year after their public float
rose above $75 million as of the last business day of their second
fiscal quarter.\34\ Smaller reporting companies attempting to establish
eligibility to enter the scaled disclosure system again would be
required to determine that their public float fell below $50 million as
of the last business day of their second fiscal quarter, and would be
able to use scaled disclosure again in the next fiscal year following
the determination, starting
[[Page 937]]
with the first Form 10-Q of the next fiscal year.
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\34\ The entering and exiting rules in the smaller reporting
company system are modeled after the method of determining
accelerated filer status set forth in Rule 12b-2. 17 CFR 240.12b-2.
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An objective of our proposals was to simplify and improve our
disclosure and reporting rules for smaller companies by moving the
Regulation S-B disclosure requirements for smaller companies into
Regulation S-K, as recommended by the SEC Advisory Committee on Smaller
Public Companies. As a result of our rulemaking, we identified 13 item
requirements in Regulation S-B that provided scaled disclosure for
smaller companies.\35\ We reasoned that consolidation of the Regulation
S-K and S-B disclosure requirements would provide a more unified set of
rules that would be easier to use. To accomplish this, we proposed to
move item requirements in Regulation S-B containing substantive scaled
non-financial disclosure requirements into Regulation S-K by adding a
new paragraph to the items of Regulation S-K that would contain
separate disclosure standards for smaller reporting companies. We did
not propose any major substantive changes to the items we were moving
from Regulation S-B into Regulation S-K, but sought comment from the
public on substantive changes they would recommend.
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\35\ See note 26 above.
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One of the item requirements in Regulation S-B providing scaled
disclosure requirements did not have a similar disclosure item
requirement in Regulation S-K. Consequently, our specific proposals
included adding a new Item 310 in Regulation S-K for financial
statements. Item 310 of Regulation S-K would have set forth the
alternative requirements on form and content of financial statements
for smaller companies that formerly appeared in Item 310 of Regulation
S-B.
The proposals also allowed a smaller reporting company to choose,
on an item-by-item basis or ``a la carte'' basis, to comply with either
the scaled disclosure and financial reporting requirements made
available in Regulation S-K for smaller reporting companies or the
requirements for other companies in Regulation S-K, when the
requirements for other companies were more rigorous.
The proposal, like the amendments we are adopting, would rescind
all of our forms designated with the letters ``SB.'' Smaller reporting
companies would be eligible to file on Form S-1, rather than on Form
SB-1 or SB-2 as before, to offer securities to the public. This would
provide a smaller reporting company the ability to incorporate by
reference its previously filed Exchange Act reports if the company
meets the requirements set forth under General Instruction VII of Form
S-1.\36\
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\36\ General Instruction VII of Form S-1 sets forth the
eligibility criteria to qualify for incorporation by reference. The
registrant must be required to file reports pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 and must
have filed all reports and materials during the preceding 12 months.
The company must have filed an annual report for its most recently
completed fiscal year. Section D of the instruction disqualifies
companies that, in the past three years, were any of the following:
(a) A blank check company as defined in Rule 419(a)(2);
(b) A shell company, other than a business combination related
shell company, each as defined in Rule 405; or
(c) A registrant for any offering of penny stock as defined in
Rule 3a51-1 under the Exchange Act.
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Finally, the proposals, like the amendments we are adopting, would
eliminate the ``transitional small business issuer format'' associated
with Form SB-1 and annual reports on Form 10-KSB.\37\ A small business
issuer using the transitional format followed disclosure based on Model
A or B found in Regulation A. These two disclosure models were intended
to ease transition from non-reporting to reporting status for small
business issuers preparing disclosure on initial registration
statements and annual reports. In our Proposing Release we noted,
however, that the number of companies registering on Form SB-1 and
following the disclosure format within Form 10-KSB had significantly
declined over time.\38\
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\37\ See Proposing Release Release No. 33-8819, pp. 40-41 (July
5, 2007) [72 FR 39680].
\38\ For example, during the past five years, the Commission has
received only 56 Form SB-1 registration statements. For years 2000
through 2005, two small business issuers out of 56 filed a Form 10-
KSB using the transitional disclosure format.
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We received 21 comment letters on the proposals,\39\ including six
from public accounting firms. We also received comment letters from
professional and trade associations, a law firm, an associate professor
of finance, two small business owners, and the Small Business
Administration's Office of Advocacy. In general, the comment letters
strongly supported our efforts to simplify our scaled disclosure
requirements for smaller reporting companies and expand eligibility for
them.
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\39\ The public comments we received are available for
inspection in our Public Reference Room at 100 F Street, NE,
Washington, DC 20549 in File No. S7-15-07, or may be viewed at
http://www.sec.gov/comments/s7-15-07/s71507.shtml.
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III. Discussion of Amendments We Are Adopting
After considering the public comments, we are adopting the
amendments substantially as we proposed them, with the modifications
discussed below.
A. Moving Scaled Disclosure Item Requirements From Regulation S-B Into
Regulation S-K
Many of the comment letters supported moving our scaled disclosure
requirements from Regulation S-B into Regulation S-K.\40\ In general,
the comments in these letters viewed moving the requirements as having
a positive impact by reducing complexity and promoting more streamlined
regulation. One letter noted that combining the two disclosure systems
would allow smaller reporting companies to more easily evaluate the
extent of the differences between the requirements for smaller
reporting companies and larger companies and consider which requirement
better meets the needs of their investors.\41\
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\40\ See, e.g., Letter from the American Bar Association,
Section of Business Law (ABA).
\41\ See Letter from PricewaterhouseCoopers LLP.
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A few comment letters opposed moving the scaled disclosure
requirements into Regulation S-K, indicating that having all of the
smaller company rules in one place was convenient for smaller
companies.\42\ These comment letters expressed concern that the
migration into Regulation S-K would increase legal and accounting costs
for smaller companies and make the rules more complex for smaller
companies to understand. A few comment letters suggested providing the
scaled smaller reporting company disclosure requirements in a separate
section of Regulation S-K.\43\
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\42\ See, e.g., Letters from the Chamber of Commerce and New
York State Society of Certified Public Accountants (NYSSCPA).
\43\ See, e.g., Letter from KPMG.
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We are adopting our proposal to move our Regulation S-B scaled
disclosure requirements into Regulation S-K. After considering the
comments, we believe combining the two disclosure systems and setting
out the smaller reporting company scaled item requirements in separate
paragraphs within Regulation S-K is appropriate. We believe our
amendments eliminate redundancies and provide a more streamlined
disclosure system for smaller reporting companies. In response to the
concern that moving the item requirements will create complexity for
smaller companies, we are including an index of
[[Page 938]]
scaled disclosure requirements in the definition of smaller reporting
company at the beginning of Regulation S-K \44\ to highlight items of
the Regulation that contain the scaled disclosure requirements specific
to smaller reporting companies.
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\44\ See new Item 10(f) of Regulation S-K (Index of Scaled
Disclosure Available to Smaller Reporting Companies).
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Regulation S-B has 12 non-financial item requirements that provide
scaled disclosure options to smaller reporting companies. Under this
rulemaking, these 12 item requirements are being moved to separate
paragraphs within Regulation S-K. In some cases, smaller reporting
companies are not required to provide disclosures required of larger
companies. For example, while larger companies are required to provide
disclosure under Item 305 on quantitative and qualitative disclosures
about market risk, smaller companies are not currently required to do
so under the same item requirement in Regulation S-B. In cases like
this, we include a paragraph in the relevant item of Regulation S-K
indicating that smaller reporting companies are not required to respond
to the item.
In addition to the Regulation S-B and S-K differences, the forms
themselves may contain different disclosure requirements for smaller
reporting companies. Currently, Forms 10-SB, 10-KSB and 10-QSB do not
require risk factor disclosure from small business issuers. The
amendments carry this difference in disclosure requirements over to
Forms 10, 10-K and 10-Q by adding instructions indicating that smaller
reporting companies are not required to provide risk factor disclosure
in these Exchange Act forms.
B. Moving Smaller Reporting Company Financial Statement Requirements
From Item 310 of Regulation S-B Into New Article 8 of Regulation S-X;
Additional Regulation S-X Changes
Several comment letters recommended moving the rules on form and
content of financial statements for smaller reporting companies now in
Item 310 of Regulation S-B into Regulation S-X, rather than into a new
Item 310 of Regulation S-K, as proposed. Several comment letters also
agreed with the Advisory Committee recommendation to require smaller
reporting companies to provide two years of comparative audited balance
sheet data in annual financial statements under these rules, rather
than one year, as is currently required under Regulation S-B.\45\ The
comment letters are persuasive that we should adopt these
recommendations as part of our rule amendments. Accordingly, we are
moving the financial statement rules for smaller reporting companies
into a new Article 8 of Regulation S-X \46\ and will require two years
of comparative audited balance sheet data of smaller reporting
companies. Comparative balance sheets will provide a much more
meaningful presentation for investors without a significant additional
burden on smaller reporting companies, since the earlier year data
should be readily available for the purposes of preparing the other
financial statements.\47\ We also are making technical and language
changes to the rules on form and content of financial statements for
smaller public companies to facilitate their placement in Article 8 of
Regulation S-X rather than in Regulation S-B or Regulation S-K.
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\45\ We had specifically asked for comments on this
recommendation in the Proposing Release. See Proposing Release
Release No. 33-8819, p. 26 [72 FR 39676].
\46\ To be codified at 17 CFR 210.8-01--.8-08.
\47\ Although the earlier year data would be readily available,
auditors must undertake appropriate audit procedures related to the
prior fiscal year.
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We also are adopting technical amendments to Rule 3-05(b)(2)(iv) of
Regulation S-X that were tied conceptually to the small business issuer
threshold in Regulation S-B that we are replacing with the definition
of smaller reporting company in Regulation S-K. Rule 3-05 of Regulation
S-X requires the inclusion of financial statements of businesses
acquired or to be acquired, so-called ``target companies,'' in
registration statements and Form 8-K reports. The number of years of
audited financial statements to be included for a target company is
determined using the conditions specified in the definition of
significant subsidiary in Rule 1-02(w) of Regulation S-X. If the net
revenues reported by the target company for the latest fiscal year are
less than $25 million and three years of financial statements would
otherwise be required, the earliest of the three fiscal years may be
omitted pursuant to Rule 3-05(b)(2)(iv) of Regulation S-X.
Several comment letters noted that in light of the $50 million in
revenues threshold proposed for determining a company's qualification
as a smaller reporting company if a company is unable to calculate
public float, the Commission should consider revising this rule to
raise to $50 million the $25 million threshold currently used to limit
to two the periods required for audited financial statements of an
acquired business.\48\ The $25 million threshold was based on the $25
million in revenues standard in Regulation S-B that we are
rescinding.\49\ We are amending this standard to increase the threshold
to $50 million in revenues, as suggested by the commenters.
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\48\ See, e.g., Letter from Center for Audit Quality (CAQ).
\49\ In 1996, the Commission adopted revisions to rules that
streamlined requirements with respect to financial statements of
significant business acquisitions in filings made under the
Securities Act and the Exchange Act. The $25 million threshold limit
was intended to be consistent with criteria for small business
issuers. Release No. 33-7355, p. 36 (Oct. 10, 1996).
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C. Adopting Scaled Disclosure Item Requirements in Regulation S-K
1. Overview
The following is a list of item requirements we are amending in
Regulation S-K to include the substance of the scaled standards for
smaller reporting companies now in the same item number of Regulation
S-B. The adopted amendments are substantially as described in the
Proposing Release, but with the changes discussed below:
Item 101 (Description of Business). We are adding a new paragraph
(h) to this item to set forth the alternative disclosure standards for
smaller companies that appeared in Item 101 of Regulation S-B.
Generally, the different requirements for smaller reporting companies
under Item 101 involve providing a less detailed description of the
company's business. For example, the Regulation S-K standard for Item
101 requires financial information about segments, which the standard
for smaller reporting companies does not require.\50\ In addition,
smaller reporting companies will be required to provide and disclose
business development activities for only three years, instead of the
five-year disclosure required of larger companies by Item 101 of
Regulation S-K.
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\50\ Application of U.S. GAAP (FAS 131) may, however, require
segment information in the notes to the financial statements. 17 CFR
229.101(b).
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We also are implementing additional minor revisions that replace
the reference to Canadian issuers. Since we are making the smaller
reporting company standards available to foreign issuers generally, we
are requiring that these issuers provide disclosure on enforceability
of civil liability against foreign persons. Previously, Item 101 of
Regulation S-B had required this disclosure from Canadian issuers only
because those were the only foreign issuers eligible for Regulation S-B
disclosure standards. The item requirement applicable to smaller
reporting companies also will no longer
[[Page 939]]
refer to the foreign private issuer requirement to disclose whether the
report will include a reconciliation of financial information with U.S.
generally accepted accounting principles, because smaller reporting
companies must provide financial statements prepared in accordance with
U.S. GAAP.
Item 201 (Market Price of and Dividends on Registrant's Common
Equity and Related Stockholder Matters). We are revising Instruction 6
to paragraph (e) of this Regulation S-K item requirement to reflect
that smaller reporting companies (instead of ``small business
issuers'') are not required to provide a performance graph.
Item 301 (Selected Financial Data); Item 302 (Supplementary
Financial Information). We are adding a new paragraph (c) to each item
requirement, providing that smaller reporting companies are not
required to present the information required by these item
requirements.
Item 303 (Management's Discussion and Analysis of Financial
Condition and Results of Operations). As provided in new paragraph (d),
this item sets forth the scaled requirements.\51\ For example, under
this item requirement, smaller reporting companies will:
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\51\ As discussed below, we are also adding references to two
Industry Guides to this item.
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Provide only two years of analysis if the company is
presenting only two years of financial statements, instead of the three
years of analysis required of larger companies that are required to
provide three years of financial statements; and
Not be required to provide tabular disclosure of
contractual obligations.
Item 305 (Quantitative and Qualitative Disclosures about Market
Risk). New paragraph (e) in this item specifies that smaller reporting
companies are not required to disclose Item 305 information.
Item 402 (Executive Compensation). New paragraphs (l) through (r)
set forth the alternative standards for smaller reporting companies for
disclosure of compensation of executives and directors that were in
Item 402 of Regulation S-B.\52\ Smaller reporting companies will:
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\52\ As proposed, the scaled disclosure for this item would have
been in new paragraph (l), but in order to clarify the requirements,
the adopted Item restates the requirements for smaller reporting
companies in several paragraphs.
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Provide executive compensation disclosure for only three
named executive officers (specifically including the principal
executive officer but not the principal financial officer), rather than
the five required of larger companies;
Provide the Summary Compensation Table disclosure for only
two years, rather than the three years required of larger companies;
Not be required to provide a Compensation Discussion and
Analysis;
Provide only three of the seven tables \53\ required of
larger companies;
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\53\ These are the Summary Compensation Table, the Outstanding
Equity Awards at Fiscal Year End Table, and the Director
Compensation Table.
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Provide alternative narrative disclosures; and
Not be required to include footnote disclosure of the
grant date fair value of equity awards in the Director Compensation
Table.
Item 404 (Transactions with Related Persons, Promoters and Certain
Control Persons). We are making changes to the introductory text of
paragraph (c)(1), and adding paragraph (d) before the instructions to
this item to change the calculation of total assets for smaller
reporting companies from 1% of their total assets based on the average
of total assets at year end for the last three completed fiscal years
to the last two completed fiscal years. We believe this standard is
more consistent with the two years of financial statements required of
smaller reporting companies. Under new Item 404(d) of Regulation S-K,
smaller reporting companies will: \54\
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\54\ See Section III.C.2, clarifying that to the extent the
smaller reporting company scaled disclosure requirement is more
rigorous than the same larger company item requirement, smaller
reporting companies will be required to comply with the more
rigorous smaller reporting company requirement.
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Not be required to disclose policies and procedures for
reviewing related person transactions, which is required of larger
companies;
Be required to provide disclosure regarding a transaction
where the amount exceeds the lesser of 1% of a smaller company's total
assets or $120,000;
Be required to provide additional specific information
about underwriting discounts and commissions, and corporate parents;
and
Be required to provide disclosure regarding promoters and
certain control persons.
Item 407 (Corporate Governance). New paragraph (g) to Item 407 of
Regulation S-K specifies that smaller reporting companies are:
Not required to provide Compensation Committee Interlock
and Insider Participation disclosure or a Compensation Committee
Report; and
Not required to provide an Audit Committee Report until
the first annual report after their initial registration statement is
filed with the Commission and becomes effective.
Item 503 (Prospectus Summary, Risk Factors, and Ratio of Earnings
to Fixed Charges). New paragraph (e) to this item specifies that
smaller reporting companies need not provide the information required
by paragraph (d) of Item 503 regarding the ratio of earnings to fixed
charges when a registrant issues debt, or the ratio of combined fixed
charges and preference dividends to earnings when a registrant issues
preference equity securities. In addition, we have added instructions
to the risk factor disclosure requirements set forth in Exchange Act
Forms 10, 10-K and 10-Q to indicate that smaller reporting companies
are not required to provide Item 503 risk factor disclosure in these
filings.\55\
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\55\ See Section III.A above. The Securities Offering Reform
final rule amendments stated that the risk factor disclosure
requirement did not apply to small business issuers filing on Form
10-KSB or Form 10-SB. The amendments we are adopting carry this
difference in disclosure requirements over to the Forms 10, 10-K and
10-Q for smaller reporting companies. See Securities Offering Reform
Release 33-8591 (July 19, 2005) [70 FR 44722, 44786-87].
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Item 504 (Use of Proceeds). We are revising Instruction 6 to this
item to clarify that new Article 8 of Regulation S-X, rather than the
other articles of Regulation S-X, will govern whether financial
statements of businesses proposed to be acquired must be included in
the filings of smaller reporting companies.
Item 601 (Exhibits). New paragraph (c) reflects that smaller
reporting companies need not provide Exhibit 12 (Statements re
Computation of Ratios).
Other Regulation S-K Items. We identified 24 item requirements in
Regulation S-B that were substantially similar or identical to the same
numbered item requirements in Regulation S-K. In these cases, we
determined it was appropriate to require that smaller reporting
companies follow the same item requirements as larger companies. In the
Proposing Release, we identified Item 512 (Undertakings) as a scaled
item requirement for smaller reporting companies; however, we now
believe no change is needed because it is clear which undertakings may
apply to a smaller reporting company's filings. We are, therefore, not
including a new paragraph (m) in Regulation S-K, as proposed.
In addition, as described below, we are amending Item 102
(Description of Property) of Regulation S-K to include references to
the Industry Guides \56\
[[Page 940]]
noted below and highlighting the requirements of Item 401 (Directors,
executive officers, promoters and control persons). To further maintain
consistency with references to other industry guides in the disclosure
item requirements, we also are adding instructions to Item 303
directing companies' attention to:
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\56\ The Industry Guides serve as expressions of the policies
and practices of the Division of Corporation Finance. They are of
assistance to issuers, their counsel and others preparing
registration statements and reports, as well as to the Commission's
staff. The Industry Guides are not rules, regulations, or statements
of the Commission. The Commission has neither approved nor
disapproved these interpretations. See Release 33-6384 (Mar. 16,
1982).
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Industry Guide 3--Statistical disclosure by bank holding
companies; and
Industry Guide 6--Disclosure concerning unpaid claims and
claim adjustment expenses of property-casualty insurance underwriters.
The Regulation S-B item requirement on the Description of Property
in Item 102 included detailed instructions specific to small business
issuers engaged in: (1) Significant mining operations; (2) oil and gas
producing activities; and (3) real estate activities. Under Item 102 of
Regulation S-B, mining companies are directed to the information called
for in Industry Guide 7; oil and gas producing issuers are directed to
the information called for in Industry Guide 2; and real estate
companies are directed to the information called for in Industry Guide
5. Regulation S-K, however, does not include any references to these
industry guides. Several commenters suggested that we revise Item 102
of Regulation S-K to include references to industry guides.\57\ We
agree, and are amending Item 102 of Regulation S-K to include
references to the following industry guides:
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\57\ See, e.g., Letters from KPMG and Grant Thornton.
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Industry Guide 2--Disclosure of oil and gas operations;
Industry Guide 4--Prospectus relating to interests in oil
and gas programs;
Industry Guide 5--Preparation of registration statements
relating to interests in real estate limited partnerships; and
Industry Guide 7--Description of property by issuers
engaged or to be engaged in significant mining operations.
Item 401 of Regulation S-K (Directors, executive officers,
promoters and control persons), differs from Regulation S-B in one
respect. Under Regulation S-B, the disclosure pertaining to Federal
bankruptcy laws or state insolvency laws related only to ``any
bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that time.'' \58\ Under
Regulation S-K, disclosure must be provided pertaining to any petitions
filed under the Federal bankruptcy laws or any state insolvency laws
filed by or against a director or officer of the company.\59\ We
believe it is appropriate to require disclosure about a personal
bankruptcy petition filed by or against a director or officer of a
smaller reporting company given that, in light of the generally smaller
level of operations of smaller reporting companies, it may be material
to an evaluation of the ability or integrity of any director or person
to be nominated to become a director or executive officer of the
smaller reporting company. Accordingly, smaller reporting companies now
will be required to comply with the slightly different disclosure
requirement of the Regulation S-K item.
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\58\ See Item 401(d)(1) of Regulation S-B. 17 CFR 228.401(d)(1).
Under Regulation S-B, issuers provide legal proceedings disclosure
about promoters and control persons for the past five years.
Regulation S-K requires disclosure on legal proceedings for control
persons and promoters for registrants that have not been subject to
the reporting requirements for Section 13(a) or 15(d) of the
Exchange Act for the twelve months immediately before the filing of
the registration statement, report or statement. 17 CFR 229.401(f)
and (g).
\59\ See Item 401(f)(1) of Regulation S-K. 17 CFR 229.401(f)(1).
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2. Electing Scaled Disclosure Standards on ``A La Carte'' Basis
Commenters generally supported the proposal to allow smaller
reporting companies to choose compliance with either the smaller
reporting company scaled disclosure requirements or the larger company
disclosure requirements in Regulation S-K on an item-by-item or ``a la
carte'' basis.\60\ One comment letter expressed the view that the
smaller reporting company disclosure requirements would serve as a
baseline that would allow companies to provide any additional
disclosure they deemed important to investors.\61\ Another set of
comments noted that the ``a la carte'' approach is already sanctioned
by disclosure rules generally.\62\ This letter explained that line-item
disclosure requirements generally permit providing more disclosure than
is required by the line items. Additionally, issuers are required to
disclose all material facts that are necessary to make the statements
included in the document not misleading, which may require disclosures
in excess of line item requirements.\63\
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\60\ See, e.g., Letter from Independent Community Bankers of
America (ICBA).
\61\ See Letter from Deloitte & Touche LLP (Deloitte).
\62\ See Letter from ABA.
\63\ The ABA cited the following in support of this statement:
Sections 11 and 12(a)(2) of the Securities Act and Rule 408 under
the Securities Act, and Rules 10b-5 and 12b-20 under the Exchange
Act.
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Some accounting firms commenting on the a la carte approach
requested that we address what one commenter referred to as the ``lock-
in'' aspect of the proposal. In the Proposing Release, we explained
that a smaller reporting company would have the option to take
advantage of the smaller reporting company requirements for one, some,
all or none of the item requirements, at its election, in any one
filing. We proposed to require, however, that a smaller reporting
company provide its financial statements on the basis of the scaled
financial statement requirements or the larger company financial
statement requirements for a single fiscal year, and not be permitted
to switch back and forth from one to another in different filings
within a single fiscal year.
One accounting firm noted that it was unclear how the a la carte
approach would work if issuers were required to elect in the first
quarterly report whether they would follow the scaled financial
statement requirements or the larger company Regulation S-X
requirements in that same fiscal year's annual report on Form 10-K.\64\
According to this letter, making a determination in this manner would
require a smaller reporting company that wants to preserve the option
of following the smaller reporting company requirements in its annual
report on Form 10-K to adhere to the smaller reporting company rules
and not provide any additional information in the first quarterly
report on Form 10-Q. Another accounting firm expressed the concern that
a smaller reporting company might elect to provide more than the
minimum disclosures only in periods when the additional disclosures
tended to be favorable.\65\ These comment letters agreed that the a la
carte approach would work if the Commission clarified that although the
smaller reporting company disclosure and financial statement
requirements would appear to establish the minimum disclosure
requirements, Rule 12b-20 under the Exchange Act \66\ would require
that a smaller reporting company provide any additional
[[Page 941]]
information beyond those minimum disclosure requirements, in order to
avoid a misleading presentation.\67\ The accounting firms suggested
that we encourage smaller reporting companies to provide consistent
disclosures in succeeding periods in order to respond to investor
expectations and allow period-to-period comparisons.
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\64\ See Letter from BDO Seidman, LLP (BDO).
\65\ See Letter from Ernst & Young LLP (E&Y).
\66\ 17 CFR 240.12b-20.
\67\ See Letters from E&Y and CAQ.
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The proposals would have required companies to make the
determination whether to report financial statement disclosure on a
scaled basis in the first quarter due after the fiscal year covering
the determination date. After reviewing the suggestions in several
comment letters, however, we believe it is appropriate to permit
smaller reporting companies to choose to comply with both the non-
financial and financial item requirements on an item-by-item basis when
these disclosures are provided consistently and when they are
consistent with the legal requirements under the federal securities
laws, including Securities Act Rule 408 and Exchange Act Rule 12b-20.
Additionally, we stress the importance of providing disclosure that
permits investors to make period-to-period comparisons, whether
quarterly or annually.
We continue to expect that our staff will evaluate item-by-item
compliance by smaller reporting companies with only the Regulation S-K
requirements applicable to smaller reporting companies, and not with
the requirements applicable to larger companies. This will be the case
even if the company whose filing is being reviewed chooses to comply
with the larger company requirements. Finally, as we noted in the
Proposing Release, the a la carte approach will have no effect on the
legal requirements and liabilities that apply to all disclosures made
by issuers.\68\
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\68\ Release No. 33-8819, n. 76 p. 33 [72 FR 39678].
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We are further clarifying that to the extent the smaller reporting
company scaled item requirement is more rigorous than the same larger
company item requirement, smaller reporting companies will be required
to comply with the more rigorous, smaller reporting company item
requirement. Also, we do not believe it is appropriate for a smaller
reporting company to comply with a larger reporting company Regulation
S-K item requirement if that requirement sets a higher threshold
obviating the need for the smaller reporting company to provide
disclosure. For example, unlike the larger company requirement under
Item 404 of Regulation S-K, smaller reporting companies are required to
disclose additional specific information about underwriting discounts
and commissions and corporate parents.\69\ In this case, a smaller
reporting company would be required to provide the additional Item 404
disclosure.
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\69\ See Instructions to Item 404(d) of Regulation S-K, 17 CFR
229.404(d).
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Currently, the smaller reporting company requirements under Item
404 of Regulation S-K \70\ present the only instance where the scaled
requirements could be more rigorous than the larger company standard.
This is because a smaller reporting company is required to provide
disclosure on a related person transaction since the beginning of the
company's last fiscal year if the amount involved in the transaction
exceeds the lesser of $120,000 or 1% of the average of the company's
total assets at year end for the last two completed fiscal years. In
contrast, a larger company reporting under the same Item 404 Regulation
S-K requirement is required to provide disclosure on a related person
transaction since the beginning of the last fiscal year if the
transaction exceeds $120,000.\71\ A smaller reporting company's related
person transaction may more easily exceed 1% of the average of the
smaller reporting company's total assets than $120,000, as required for
larger companies under the same item requirement. We believe this may
be the case because 1% of a smaller company's total assets might be
appreciably lower than $120,000.
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\70\ New Regulation S-K Item 404(d)(1) related person disclosure
requirement for smaller reporting companies.
\71\ 17 CFR 229.404(a).
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D. Eliminating ``SB'' Forms Associated With Regulation S-B
While some comment letters appeared to support the elimination of
the forms designated with the letters ``SB'' associated with Regulation
S-B,\72\ along with moving the smaller reporting company requirements
from Regulation S-B into Regulation S-K, others questioned whether this
approach would reduce compliance burdens and lower costs for smaller
companies.\73\ Some of the letters questioning the elimination of the
SB forms recommended a two-year phase-in period to help smaller
companies adjust to the transition. Some letters expressed a general
perception that eliminating the SB forms would lead to increased costs
for smaller reporting companies because Forms 10, 10-K, 10-Q and S-1,
which would be used by smaller companies if the SB forms were
eliminated, appeared to have more item disclosure requirements.\74\ One
commenter stated, however, that eliminating the ``SB'' forms would
provide both time and cost savings to smaller reporting companies that
will be eligible to incorporate information from their previously filed
Exchange Act periodic reports into a Form S-1 registration
statement.\75\ None of the comment letters explained how using Forms
10, 10-K, 10-Q, and S-1 would increase costs for smaller reporting
companies. One letter noted, however, that a smaller company probably
would take longer to go through Form 10-K and Form 10-Q to figure out
exactly what applied to the company and what did not apply in terms of
required disclosures.\76\ In contrast, another comment letter noted
that the elimination of ``SB'' forms would allow smaller reporting
companies to incorporate information from their previously filed
Exchange Act reports into a Form S-1 registration statement, which
would result in time and cost savings to the smaller reporting
company.\77\
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\72\ See, e.g., Letter from ABA.
\73\ See, e.g., Letter from Office of Advocacy of the U.S. Small
Business Administration (SBA Advocacy Office).
\74\ See, e.g., Letter from the International Association of
Small Business Broker Dealers and Advisors (``IASBDA'').
\75\ See Letter from ABA.
\76\ See Letter from James J. Angel, Ph.D., CFA (``Prof. James
Angel'').
\77\ See Letter from ABA.
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Some of the comment letters apparently misperceived that the SB
forms are simpler and shorter than forms larger companies use. This is
not the case. The SB forms themselves are not necessarily simpler to
use than the forms that larger companies use. The scaling and increased
simplicity for smaller companies generally occurs in the item
requirements of Regulation S-B, rather than the associated SB forms,
and we are moving the item requirements into Regulation S-K with very
few changes.\78\
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\78\ Moreover, the SB forms are not necessarily substantially
shorter than the comparable forms for larger companies. Form 10-SB
is actually longer, at 4\1/2\ pages, than Form 10, which is less
than 4 full pages long; Form 10-KSB is 11 pages long, while Form 10-
K is 12; Form SB-2 is 5 pages long, while Form S-1 is just over 6
pages, not including instructions on summary prospectuses.
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Nevertheless, after considering the comments, we have decided not
to eliminate the Exchange Act reporting SB forms immediately, but to
phase them out to ease the transition for smaller companies. We
considered commenters' concerns regarding current small business
issuers moving to the Forms 10-K and 10-Q, and concluded that our
transition schedule will provide an
[[Page 942]]
adequate period for these companies to continue to file reports on
these forms, if they so desire.\79\ Further, to help current small
business issuers make the transition, the Division of Corporation
Finance's Office of Small Business Policy plans to provide an
informational brochure to assist their transition to the new smaller
reporting company form requirements.
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\79\ See Section IV below on compliance dates.
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E. Qualifying Standards for Treatment as ``Smaller Reporting Company''
Many of the comment letters in favor of our proposed definition of
``smaller reporting company'' agreed that combining the categories of
non-accelerated filers with small business issuers for purposes of the
definition provided a convenient and simple approach because it tracks
the accelerated filer definition and reduces regulatory complexity.\80\
In the Proposing Release, we reasoned that requiring only a public
float test for most companies to qualify would provide additional
simplicity, consistency and certainty. Eliminating a revenue test also
would broaden the category of eligible companies. Our decision to focus
on a company's non-affiliate common equity market capitalization or
``public float'' was also consistent with the Commission's current
regulatory standards for purposes of Form 10-K, Form S-3, and the
accelerated filer definition. Setting the public float ceiling at $75
million for smaller reporting companies further aligns the smaller
reporting company definition with the non-accelerated filer definition.
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\80\ See, e.g., Letters from PricewaterhouseCoopers and E&Y.
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The Advisory Committee recommended that we require companies to
determine eligibility based on total equity market capitalization
rather than public float. Although the Advisory Committee acknowledged
that the Commission has historically and consistently used public float
as a measurement in analogous regulatory contexts, it stated that
equity market capitalization would better measure total financial
exposure to investors.\81\ The Advisory Committee recommended extending
the Commission's non-financial scaled disclosure requirements, covering
disclosure and reporting, to companies in the lowest 1% of market
capitalization. Some of the comment letters we received on the
Proposing Release agreed with the Advisory Committee equity market
capitalization preference, stating that it was simpler and more widely
understood than the calculation of public float. The majority of
comment letters supported our proposals to require a public float
standard only, agreeing we should require a revenue test only if a
company is unable to calculate public float.
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\81\ Advisory Committee Final Report 19.
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Several comment letters opposed increasing the public float ceiling
to a level higher than $75 million.\82\ One comment letter explained
that because smaller companies typically do not have a large analyst
following, financial information provided by the company takes on
greater importance in communicating results to investors.\83\ Another
letter noted that to balance protecting investors and promoting capital
formation by small businesses, ``reduced'' disclosures should be
limited to those public companies with relatively limited and less
complex operations.\84\ Most comment letters, however, supported a
higher public float ceiling than $75 million.\85\ Some of these comment
letters argued that many companies with a public float greater than $75
million are still quite small. Several commenters suggested that the
Commission provide scaled regulation to companies with up to $787
million in equity market capitalization, as they seemed to believe the
Advisory Committee had recommended.\86\
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\82\ See Letters from PricewaterhouseCoopers and E & Y.
\83\ See Letter from PricewaterhouseCoopers.
\84\ See Letter from E&Y.
\85\ See, e.g., Letters from SBA Advocacy Office and ABA.
\86\ The Advisory Committee recommended extending the
Commission's scaled disclosure regime to the lowest 6% of total U.S.
equity market capitalization, which would have included companies
with less than $787 million in market capitalization as of March 31
and June 10, 2005. But the Advisory Committee only identified the
rules on form and content of financial statements in Item 310 of
Regulation S-B as appropriate for application to that category of
companies. The Advisory Committee recommended extending the
Commission's other scaled disclosure rules, covering disclosure and
reporting, to companies in the lowest 1% of market capitalization,
which, as explained in the Proposing Release at page 16 [72 FR
39673], is essentially the same group and proposal contained in the
Proposing Release--reporting companies with less than $75 million in
public equity float--which we are adopting with few changes today.
As calculated from data obtained from Thomson Financial
(Datastream), the overlap between reporting companies with $128
million in market capitalization and reporting companies with $75
million in public float is approximately 98%.
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We are adopting, as proposed, a definition for ``smaller reporting
companies'' that requires companies to have a public float of less than
$75 million. We believe this standard is appropriately scaled in that
it reduces costs to smaller companies caused by unnecessary information
requirements, consistent with investor protection.
As adopted, the definition will make eligibility for smaller
reporting company status contingent solely on public float for most
companies. Alternatively, for companies that are unable to calculate
public float, we are, as proposed, providing a revenue test. If a
company has no common equity outstanding or no market price for its
outstanding common equity exists at the time of its eligibility
determination, the company would qualify as a smaller reporting company
if it had less than $50 million in revenues in the last fiscal year.
This is a departure from the dual eligibility test under the Regulation
S-B system, which required separate calculations under public float and
annual revenues. By eliminating the revenue test for most companies,
the new definition of smaller reporting company simplifies and
streamlines the definition while expanding the number of companies
eligible to qualify.
As adopted, Item 10(f) of Regulation S-K will set forth the
definition for ``smaller reporting company.'' We are further
streamlining the definition and clarifying technical inconsistencies in
the Proposing Release. We are also modifying the proposed introduction
of Item 10, which indicated that smaller reporting companies would be
permitted to choose to comply with either the requirements applicable
to smaller reporting companies or the requirements applicable to other
companies. Companies may make a choice on most of the scaled disclosure
item requirements, unless the requirements for smaller reporting
companies specify that smaller reporting companies must comply with the
smaller reporting company requirements.\87\ If the item requirement
does not require specific compliance, then the smaller reporting
company will be permitted to choose scaled or standard disclosure
requirements.
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\87\ See the discussion of Item 404 at the end of Part III.C.2.
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1. Eligibility and Exclusions
Currently, under Item 10 of Regulation S-B, small business issuer
eligibility is limited to U.S. and Canadian issuers. This has been the
case since 1992, when we adopted Regulation S-B and its associated
forms and maintained eligibility for small business issuer status for
Canadian companies because these companies had been able to use the
Form SB-2 precursor, Form S-18. As adopted, we are expanding
eligibility for smaller reporting company status to non-U.S.
[[Page 943]]
companies using domestic company forms. Foreign companies will qualify
as smaller reporting companies if they are eligible to file on a form
that permits disclosure based on the standards for smaller reporting
companies, such as Forms S-1, S-3, S-4, 10-Q, and 10-K. Companies
filing on forms available only to ``foreign private issuers,'' such as
Forms F-1, F-3, F-4, and 20-F, will be ineligible for the smaller
reporting company scaled disclosure requirements.
Several commenters objected to the proposal requiring that Canadian
and other foreign private issuers provide financial statements prepared
according to U.S. GAAP if they want to use the scaled rules available
to smaller reporting companies, which they may use only if they file on
a form available to U.S. domestic companies. Generally, these comment
letters stated that the proposals would eliminate an accommodation
already enjoyed by Canadian companies filing on Form SB-2. Currently,
Canadian companies are permitted to provide Canadian GAAP financial
statements that are reconciled to U.S. GAAP on domestic forms. Some of
the comment letters urged that we consider allowing all foreign private
issuers to provide their own country's GAAP with U.S. GAAP
reconciliation.
To the extent that a foreign company qualifies as a smaller
reporting company, it may make filings with us on forms available to
domestic U.S. companies if it presents financial statements pursuant to
U.S. GAAP. We continue to believe that because we are extending
eligibility for scaled disclosure on domestic forms to all foreign
issuers, it is important to require that this significantly larger
group of foreign filers provide financial data in accordance with U.S.
GAAP on domestic forms at this time. Other than in limited situations,
foreign filers using domestic forms are required to prepare their
financial statements in accordance with U.S. GAAP. Unlike our filing
forms that are specifically designed for foreign private issuers that
permit the use of financial statements prepared in accordance with
bases of accounting other than U.S. GAAP so long as U.S. GAAP
reconciling information is presented, the disclosure and other
requirements under our domestic filing forms do not contemplate the use
of accounting principles other than U.S. GAAP. We believe eligible
foreign registrants that choose to avail themselves of the option to
provide scaled disclosure should comply fully with the scaled
disclosure and financial statement presentation requirements applicable
to domestic issuers.\88\ Finally, the regulatory scheme for foreign
private issuers on the ``F'' forms is specifically tailored to address
their special circumstances, and we believe the scheme provides the
accommodations most useful to these companies.
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\88\ We have published a concept release on whether U.S.
companies should be permitted to use International Financial
Reporting Standards as published by the International Accounting
Standards Board in their filings with the Commission. If we proceed
with proposed rules in this area, we may consider the impact of any
proposal on filers that use scaled disclosure. See Release No. 33-
8831 (Aug. 7, 2007) [72 FR 45600].
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We will continue to exclude investment companies, including
business development companies, and asset-backed issuers from
eligibility for scaled treatment under our rules for smaller reporting
companies. We requested comment on these exclusions and received none.
2. Determination Dates
The smaller reporting company determination dates we are adopting
today are based on three categories of companies: reporting companies
with a public float, non-reporting companies filing a registration
statement, probably an initial registration statement, under either the
Securities Act or the Exchange Act, and reporting or non-reporting
companies without a public float.\89\ We are amending the definition of
smaller reporting company to remove the reference to an issuer having
``no significant public common equity outstanding,'' based on a
commenter's belief that it was confusing. Instead, the definition will
indicate that in the case of an issuer whose public float as calculated
under the definition was zero, most likely because the issuer had no
public common equity outstanding or no market price for its common
equity existed, the issuer must have had annual revenues of less than
$50 million in its last fiscal year.
---------------------------------------------------------------------------
\89\ See new Item 10(f) of Regulation S-K.
---------------------------------------------------------------------------
In the case of a reporting company, we are requiring the same
public float calculation currently used to determine accelerated filer
status, $75 million in public float computed by multiplying the
aggregate worldwide number of shares of its voting and non-voting
common equity held by non-affiliates by the price at which the common
equity was last sold, or the average of the bid and asked prices of
common equity in the principal market for the common equity.
a. Reporting Companies
To determine smaller reporting company eligibility, reporting
companies will follow the accelerated filer determination date in Rule
12b-2 under the Exchange Act--the last business day of a company's
second fiscal quarter.\90\ We believe this approach simplifies
regulation and promotes consistency and uniformity with current
Commission rules. The public float of a reporting company will be
calculated by using the price at which the shares of its common equity
were last sold or the average of the bid and asked prices of such
shares in the principal market for the shares as of the last business
day of the company's second fiscal quarter, multiplied by the number of
outstanding shares held by non-affiliates. We are adopting, as
proposed, a rule providing that if a reporting company determines it
qualifies as a larger reporting company rather than a smaller reporting
company on the last day of its second fiscal quarter, it will be
required to comply with the larger company disclosure standards when it
files its first quarterly report in the fiscal year following the
fiscal year of the determination date. We are permitting larger
reporting companies, however, to opt for the scaled disclosure
requirements beginning with the Form 10-Q covering the second fiscal
quarter corresponding to the measurement date establishing eligibility
as a smaller reporting company.\91\
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\90\ New Item 10(f)(2)(i) of Regulation S-K explains how the
determination dates work for companies already filing reports under
the Exchange Act.
\91\ See Section III.E.2.d below, explaining how a company
enters and exits the smaller reporting company disclosure status.
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b. Non-Reporting Companies Filing an Initial Registration Statement
Companies determining eligibility in connection with the filing of
their initial registration statement with the Commission will have to
choose a date within 30 days of filing to determine eligibility.\92\
Under Regulation S-B, we had required companies to choose a public
float calculation during a 60-day window before the filing. We believe
requiring a 30-day window will lead to more accuracy and less
uncertainty for filers, Commission staff, and investors.
---------------------------------------------------------------------------
\92\ See new Item 10(f)(1)(ii) of Regulation S-K.
---------------------------------------------------------------------------
The calculation methodology we are adopting for non-reporting
companies varies slightly from the Regulation S-B standard we are
rescinding. The Regulation S-K standards will require computing public
float based on three components:
Estimated offering price per share at the time of filing
the registration statement;
[[Page 944]]
Number of shares of common stock outstanding that are held
by non-affiliates before the offering; and
Number of shares of common stock to be sold at the
estimated offering price.
As adopted, the rule will require that non-reporting companies base
the calculation on the estimated number of registered shares for
offering to the public. For example, as we illustrated in the Proposing
Release, a company that registers 7,000,000 shares in its initial
public offering will be required to add that number to the total number
of shares held by non-affiliates before the offering. If a company has
25,000,000 shares of common stock outstanding held by non-affiliates
before the offering, it would add the 7,000,000 and 25,000,000 shares
of common stock. The result would mean that the 32,000,000 shares of
common stock outstanding would be multiplied by the estimated offering
price per share in the initial public offering.
One commenter raised questions regarding the proposed method of
calculation.\93\ This commenter noted that the estimated public
offering price and the number of shares being offered tends to change
during the time between the initial filing of the registration
statement and the final prospectus. The uncertainty raised by the final
estimated public offering price and number of shares being offered
caused the commenter to question whether an issuer would be required to
switch midway through the process from using smaller reporting company
disclosure standards to using more extensive regular disclosure
standards. Conversely, this commenter noted that if the price range
and/or the number of shares being offered decreased, the issuer will
have satisfied a more extensive disclosure standard than it turns out
it was required to satisfy.
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\93\ See Letter from ABA.
---------------------------------------------------------------------------
We considered these comments, and believe it is appropriate to
provide initial public offering registrants the option to recalculate
their public float at the time the company completes the initial public
offering. Our intention in providing this flexibility is to permit (but
not require) these issuers to recalculate their eligibility based on
the results of the initial public offering for purposes of filing the
next periodic report. For example, if an issuer files an initial public
offering registration statement under the Securities Act based on the
larger company Regulation S-K item requirements but then determines
after the close of the initial public offering that its public float is
below $75 million, then this issuer would be a smaller reporting
company and would be eligible to provide scaled disclosure in the first
periodic report due after the initial public offering registration
statement was declared effective.\94\
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\94\ See new Item 10(f)(2)(ii) of Regulation S-K.
---------------------------------------------------------------------------
To address the commenter's concern that a smaller reporting company
would be required to transition its disclosure to the larger company
requirements if its public float rose above $75 million during the pre-
effective stage of the filing, we are clarifying that this would not be
the case if the issuer made a bona fide eligibility determination at
the time it filed the initial public offering registration statement.
The issuer will continue to be a smaller reporting company until its
next annual determination date--the end of its second fiscal quarter.
With regard to a company's initial registration statement under the
Exchange Act covering a class of securities, the company would
calculate its public float as of a date within a 30-day window of the
registration statement being filed. Because such an Exchange Act
registration statement would not directly affect the issuer's public
float, if an issuer that files such an Exchange Act registration
statement does not have a public float or its public float cannot be
calculated because there is no market price for the issuer's equity
securities, the issuer's eligibility for the scaled disclosure would be
based on its revenue, as proposed.\95\
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\95\ See new Item 10(f)(1)(iii) of Regulation S-K.
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c. Alternative Revenue Test for Reporting and Non-Reporting Companies
As we stated in the Proposing Release, situations may arise in
which a reporting company would be unable to calculate public float
because it has no public common equity outstanding or no market price
for its common equity exists. As adopted, the definition provides a
third eligibility category to qualify for smaller reporting company
status--companies unable to calculate a public float. To qualify as
smaller reporting companies, this group of companies will be required
to have annual revenues of less than $50 million during the last fiscal
year before filing the registration statement.\96\
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\96\ Id.
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d. Entering and Exiting Smaller Reporting Company Status
The rules we are adopting on entering and exiting smaller reporting
company status in Item 10 of Regulation S-K are less restrictive than
the Regulation S-B requirements of Item 10. Item 10 of Regulation S-B
currently requires issuers to calculate eligibility based on public
float and revenue levels for two consecutive fiscal years. The
Regulation S-B system had a significantly longer transition period to
enter or exit the smaller company disclosure system.
We are adopting transition rules for entering and exiting smaller
reporting company status that track the accelerated filer definition.
The Proposing Release suggested that the accelerated filer transition
rules were the same as the smaller reporting company transition
requirements to move back and forth from larger company disclosure
standards to smaller reporting company standards. One comment letter
requested clarification, pointing out that accelerated filers are
required to change to their new status when determining the due date of
the annual report covering the year of the status change, but, as
proposed, the smaller reporting company determination would not take
effect until the first fiscal quarter of the next fiscal year.
As adopted, the rules provide that a larger reporting company that
determines it is a smaller reporting company as of the last business
day of its most recently completed second fiscal quarter is permitted
to transition to the scaled disclosure requirements in the Form 10-Q
quarterly report corresponding to the determination date's second
fiscal quarter rather than, as proposed, the following fiscal year's
first quarterly report. A smaller reporting company required to
transition to the larger reporting system after its determination date
calculation will not be required to satisfy the larger reporting
company disclosure requirements until the first quarter after the
determination date fiscal year.\97\
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\97\ See new Item 10(f)(2)(i) of Regulation S-K.
---------------------------------------------------------------------------
To illustrate, a larger reporting company with a fiscal year end of
December 31, 2008 that qualified as a smaller reporting company on the
last business day of its most recently completed second fiscal quarter
in 2008 would be able to provide scaled disclosure beginning with the
Form 10-Q for the same second fiscal quarter in which the company
determined its eligibility, which would be due in August 2008.
Conversely, a smaller reporting company with a fiscal year end of
December 31, 2008 that is required to transition out of the scaled
disclosure system into the larger company disclosure system will be
required to do so beginning with the
[[Page 945]]
Form 10-Q for the first fiscal quarter of 2009, which would be due in
May 2009.
As adopted, once an issuer fails to qualify for smaller company
status, it will remain unqualified unless it determines that its public
float, as calculated in accordance with the definition, was less than
$50 million as of the last business day of its second fiscal quarter.
Where an issuer does not have a public float or no public market for
its common equity securities exists and it has less than $50 million in
revenue, it will qualify to use the scaled disclosure item requirements
until it exceeds $50 million in annual revenue. Once such an issuer
fails to qualify as a smaller reporting company because its revenues
exceed $50 million, that issuer will not become eligible for smaller
reporting company status until it has annual revenues of less than $40
million in its last fiscal year.\98\
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\98\ See new Item 10(f)(2)(iii) of Regulation S-K. 17 CFR
229.10(f)(2).
---------------------------------------------------------------------------
F. Miscellaneous \99\
---------------------------------------------------------------------------
\99\ In addition to the matters discussed in this release, we
are amending a number of rules to eliminate references to Regulation
S-B and the SB forms and to make other technical changes, such as
providing the Commission's current mailing address.
---------------------------------------------------------------------------
1. Indexing for Inflation
Many comment letters favored the inflation adjustments to the
public float levels and revenue ceilings in the definition of smaller
reporting company, but noted that the accelerated filer definition also
should be indexed in order to keep these two categories aligned. We are
not adopting the indexing proposal, but will consider whether these
suggestions should be the subject of a future rulemaking project to
collectively index several thresholds in current Commission rules.
2. Eliminating Transitional Small Business Issuer Format
We are eliminating the transitional small business issuer format,
as proposed. No commenters objected to this proposal.
3. Checking the ``Smaller Reporting Company'' Box
A company that qualifies as a smaller reporting company based on
the appropriate eligibility test under the definition will be required
to check the ``smaller reporting company'' box on the registration
statement or periodic report filed, whether or not it chooses to rely
on the scaled disclosure standards of the amended Regulation S-K
requirements. Several comment letters supported this proposal.\100\
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\100\ See, e.g., Letters from CAQ and ABA.
---------------------------------------------------------------------------
IV. Compliance Dates
Transition for Current Small Business Issuers. We are providing
current small business issuers the option to file their next annual
report for a fiscal year ending on or after December 15, 2007 on either
Form 10-KSB or Form 10-K. A small business issuer may continue to file
its periodic reports using Regulation S-B and the ``SB'' forms until
its next annual report is filed. After a small business issuer files
that next annual report, subsequent periodic reports must be filed on a
form that does not have the ``SB'' designation. This will provide an
optional transition period for companies that were small business
issuers as of the effective date.
As a result of this transition period, Regulation S-B, Form 10-QSB,
and Form 10-KSB need to be maintained while eligible small business
issuers may continue to use them. Accordingly, while most of the
amendments are effective on February 4, 2008. Form 10-QSB will not be
removed until October 31, 2008 and Regulation S-B and Form 10-KSB will
not be removed until March 15, 2009.
We are making numerous changes to rules and forms to implement
these rule amendments, including replacing references to small business
issuers with references to smaller reporting companies. During the
optional transition period, small business issuers have the same
reporting obligations as they had before these rule amendments, except
to the extent that they voluntarily move to the new smaller reporting
company system before being required to do so.
The ``SB'' Securities Act and Exchange Act registration statement
forms, SB-1, SB-2, and 10-SB, will be rescinded on the effective date.
Companies filing a registration statement after this date will be
required to file on the appropriate form without an ``SB'' designation.
If a registration statement was filed on an ``SB'' form before the
effective date, and the company seeks to amend it after the effective
date, the company must file the amendment on a correct form without an
``SB'' designation, but may continue to use the disclosure format and
content based on the ``SB'' form until six months after the effective
date.\101\
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\101\ For example, a company that filed on Form SB-2 before the
effective date would be required to file any pre-or post-effective
amendments on Form S-1, but would be able to maintain the item
requirement format of its Form SB-2 for up to six months after the
effective date.
---------------------------------------------------------------------------
General Transition Provisions. Companies that qualify as smaller
reporting companies after the effective date, whether or not they
currently are small business issuers, will have the option to comply
with the scaled disclosure item requirements for smaller reporting
companies in their registration statements and periodic reports filed
after the effective date. To determine their status after the effective
date, reporting companies will refer to their most recent second fiscal
quarter to calculate public float. In these cases, reporting companies
have already calculated public float for purposes of determining
accelerated filer status and, therefore, no additional computation is
necessary. Current small business issuers will be deemed to qualify as
smaller reporting companies and need not make this calculation.
Companies that recently became reporting companies before the effective
date, but have not yet had a completed second fiscal quarter, will base
eligibility on the public float calculated after the initial public
offering. In all cases, companies that qualify for smaller reporting
company status will continue to have this status until they make their
annual determination at the end of the second fiscal quarter.
V. Paperwork Reduction Act
A. Background
The amendments contain ``collection of information'' requirements
within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\102\ As discussed in the Proposing Release, we submitted a
request for approval of the ``collection of information'' requirements
contained in the proposed amendments to the Office of Management and
Budget in accordance with the PRA.\103\ Some of the revisions that we
are making to the original proposal affect these collections of
information, but the revisions do not affect the burden estimates that
we submitted to the OMB in connection with the Proposing Release. The
titles of the collections of information are:\104\
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\102\ 44 U.S.C. 3501 et seq.
\103\ 44 U.S.C. 3507(d); 5 CFR 1320.11.
\104\ The paperwork burden from Regulation S-K and S-B is
imposed through the forms that are subject to the requirements in
those regulations and is reflected in the analysis of those forms.
To avoid a Paperwork Reduction Act inventory reflecting duplicative
burdens and for administrative convenience, we assign a one-hour
burden to Regulations S-K and S-B.
---------------------------------------------------------------------------
(1) ``Regulation S-B'' (OMB Control No. 3235-0417);
(2) ``Regulation S-K'' (OMB Control No. 3235-0071);
(3) ``Regulation C'' (OMB Control No. 3235-0074);
(4) ``Form SB-1'' (OMB Control No. 3235-0423);
[[Page 946]]
(5) ``Form SB-2'' (OMB Control No. 3235-0418);
(6) ``Form S-1'' (OMB Control No. 3235-0065);
(7) ``Form S-3'' (OMB Control No. 3235-0073);
(8) ``Form S-4'' (OMB Control No. 3235-0324);
(9) ``Form S-8'' (OMB Control No. 3235-0066);
(10) ``Form S-11'' (OMB Control No. 3235-0067);
(11) ``Form 1-A'' (OMB Control No. 3235-0286);
(12) ``Form 10'' (OMB Control No. 3235-0064);
(13) ``Form 10-SB'' (OMB Control No. 3235-0419);
(14) ``Form 10-K'' (OMB Control No. 3235-0063);
(15) ``Form 10-KSB'' (OMB Control No. 3235-0420);
(16) ``Form 8-K'' (OMB Control No. 3235-0060);
(17) ``Form 8-A'' (OMB Control No. 3235-0056);
(18) ``Form 10-Q'' (OMB Control No. 3235-0070);
(19) ``Form 10-QSB'' (OMB Control No. 3235-0416);
(20) ``Form 11-K'' (OMB Control No. 3235-0082); and
(21) ``Form SE'' (OMB Control No. 3235-0327).
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number.
The hours and costs associated with preparing disclosure, filing
information required by forms, and retaining records constitute
reporting and cost burdens imposed by collection of information
requirements. The information collections related to annual, periodic,
and current reports and registration statements will be mandatory for
larger reporting companies; some of the requirements, however, will be
voluntary for smaller reporting companies. There is no mandatory
retention period for the information disclosed, and the information
disclosed will be made publicly available on the Commission's EDGAR
filing system or in the Commission's public reference room in the case
of a Form 1-A or Form SE filing.
For purposes of the Paperwork Reduction Act, as adopted, the burden
changes are insignificant for companies that currently meet the small
business issuer definition. We did not receive any comment letters
providing data or other information concerning legal or accounting
costs that would cause us to change our view.
We adopted existing Regulation S-B to provide an integrated
disclosure system for small business issuers and Regulation S-K to
provide an integrated disclosure system for larger reporting companies.
Forms SB-1, SB-2, S-1, S-3, S-4, S-8, and S-11 are registration
statements that are prepared by eligible issuers to provide investors
with the information they need to make informed investment decisions in
registered offerings. Form 1-A is the form required when a non-
reporting company seeks to use the Regulation A exemption from the
Securities Act. Regulation A is a conditional small issues exemption
available to eligible issuers. Forms 10, 10-SB, 10-K, 10-KSB, 8-K, 8-A,
10-Q, 10-QSB, and 11-K are forms that set forth disclosure requirements
for companies filing reports with the Commission pursuant to the
Exchange Act. Finally, Form SE is a notice to the Commission by an
EDGAR electronic filer that it is filing paper format exhibits.
Consistent with the information that we previously submitted to the
OMB we estimate that the total increase in burden hours for Form 10-K,
Form 10-Q, Form 10, Form S-1, and Form S-11 will be 7,857,948 and that
the total increase in cost will be $1,114,044,563. These increases are
offset by the total decrease in burden hours for Form 10-KSB, Form 10-
QSB, Form 10-SB, Form SB-1, and Form SB-2 of 7,853,542.5 burden hours
and a total decrease in cost of $1,108,787,363. The net difference
between the increase and decrease is an increase of 4,405.5 burden
hours and a cost of $5,257,200.\105\ The net increase of 4,405.5 burden
hours and costs of $5,257,200 is outweighed by the possible decrease of
356,290 burden hours and costs of $47,479,000 for the 1,581 newly
eligible smaller reporting companies.
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\105\ As explained in the Proposing Release, the net difference
arises primarily from the increased burden on real estate companies
that previously could use Form SB-2, but under these amendments
would now be required to use Form S-11, the form tailored to issuers
in the real estate industry.
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The table below sets forth our current hourly and cost burden
estimates for Forms 10-K, 10-Q, 10, S-1, and S-11 after these
amendments.\106\
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\106\ Collection affected by the rulemaking, but not included in
the table, were either rescinded or their estimated burden was not
changed.
------------------------------------------------------------------------
Form Burden hours Annual costs
------------------------------------------------------------------------
10-K................................ 23,430,170 $3,124,022,763
10-Q................................ 4,583,290 513,829,600
10.................................. 11,725 14,070,000
S-1................................. 167,912 201,493,800
S-11................................ 37,069 44,484,000
------------------------------------------------------------------------
B. Summary of Comment Letters and Revisions to the Proposals
We requested comment on the Paperwork Reduction Act analysis
contained in the Proposing Release. One commenter \107\ stated that the
substitution of the Regulation S-K disclosure framework would only be
beneficial to small issuers if there were no increase in legal and
accounting costs. The commenter noted that the Commission does not
guarantee that moving the current Regulation S-B disclosure
requirements into Regulation S-K will be more cost effective. The
commenter also disagreed with the Commission's average costs estimates,
stating that costs vary between New York City and smaller communities
throughout the country. Several other commenters \108\ raised similar
concerns that costs may increase as a result of these proposals. None
of these commenters, however, provided any data or other information to
show that legal and accounting costs will increase.
---------------------------------------------------------------------------
\107\ See Letter from the IASBDA.
\108\ See Letters from SBA Office of Advocacy, Center for
Capital Markets (U.S. Chamber of Commerce), and Prof. James Angel.
---------------------------------------------------------------------------
Our estimates of the average number of hours each entity spends
completing the affected forms, allocation of burden between outside
counsel and internal personnel, and the average hourly rate for outside
securities counsel were obtained by contacting a number of law firms
and other persons regularly involved in completing the forms and
reflect regional variances.
[[Page 947]]
Commenters who raise a concern about the transition from Regulation
S-B and the ``SB'' forms to Regulation S-K and the ``SK'' forms wanted
us to consider a phase-in period. The amendments, as adopted, will
allow a former ``SB'' filer a choice to file its first annual report on
Form 10-K or Form 10-KSB during the transition period, but thereafter
it will no longer be able to use the ``SB'' forms. For example, after
the effective date of these amendments, an eligible calendar year
company will be able to choose to file its first annual report on Form
10-K or Form 10-KSB. An eligible non-calendar company may file its
quarterly reports on Form 10-Q or Form 10-QSB until its next annual
report due after the effective date of the amendments. That next annual
report may be filed on Form 10-K or Form 10-KSB, but thereafter the
company may no longer use the ``SB'' forms.
We also received comment letters \109\ expressing concern that
legal and accounting costs will increase as a result of the proposals.
We do not believe that legal or accounting costs should increase since,
small business issuers generally will be providing the same disclosure
as currently filed. In the case of a newly eligible smaller reporting
company that previously filed under Regulation S-K using ``SK'' forms,
the disclosure burden will decrease if the company elects to use the
scaled disclosure available to smaller reporting companies. Otherwise
the issuer may also file roughly the same information as it does
currently. The Commission is providing an index to the scaled
disclosure requirements in new Item 10(f) of Regulation S-K and plans
to publish a brochure to assist smaller reporting companies in
transitioning to the new scaled disclosure requirements.
---------------------------------------------------------------------------
\109\ See Letters from IASBDA, SBA Office of Advocacy, Center
for Capital Markets (U.S. Chamber of Commerce), and Prof. James
Angel.
---------------------------------------------------------------------------
In response to these comments, we decided to revise four items that
were part of the original proposal.
First, we are persuaded by the letters of the public accounting
firms \110\ that Item 310 should be placed in a separate section within
Regulation S-X, instead of creating a new Item 310 within Regulation S-
K. We agree that having all financial information requirements within
one Regulation seems logical and appropriate.
---------------------------------------------------------------------------
\110\ See Letters from Grant Thornton, BDO, KPMG,
PricewaterhouseCoopers LLP, and CAQ.
---------------------------------------------------------------------------
Second, several commenters \111\ cite the Advisory Committee's
recommendation to require two years of balance sheets to go along with
audited statements of income, cash flows, and changes in stockholders'
equity for each of the latest two fiscal years, as required by
Regulation S-X. We have been convinced by the comment letters and the
Advisory Committee's report that two years of balance sheets will
provide investors with valuable comparative information with minimal
additional costs.
---------------------------------------------------------------------------
\111\ See Letters from Grant Thornton, BDO,
PricewaterhouseCoopers, and CAQ.
---------------------------------------------------------------------------
A third revision will allow a smaller reporting company to provide
its financial statements on an ``a la carte'' basis like the other non-
financial statement disclosure items. This revision differs from the
Proposing Release, where the Commission proposed to require a smaller
reporting company to provide its financial statements on the basis of
Item 310 of Regulation S-K or Regulation S-X for an entire fiscal year,
and not be permitted to switch back and forth from one to the other in
different filings within a single fiscal year. A commenter \112\
pointed out that this inflexibility within the ``a la carte'' system
and requiring a smaller reporting company to ``lock in'' to one
approach or the other when it files its first Form 10-Q for a year
seems contrary to the proposed ``a la carte'' approach. As we proposed,
if a smaller reporting company wanted to preserve the option of
following the smaller reporting company rules in its filings, it
perhaps could not provide the additional information required of larger
companies in its first quarterly report or risk losing the ability to
use the scaled disclosure requirements for the year. As adopted, we
will allow ``a la carte'' disclosure for financial statements so that
smaller reporting companies can provide additional information over and
above the financial disclosure required by Article 8 of Regulation S-X.
---------------------------------------------------------------------------
\112\ See Letter from BDO.
---------------------------------------------------------------------------
The fourth revision requested by commenters \113\ is to amend Rule
3-05 of Regulation S-X. Rule 3-05 provides the requirements for
Financial Statements of Businesses Acquired or to be Acquired, and
paragraph (b)(2)(iv) allows issuers to omit the financial statements
for the earliest of three fiscal years required if the net revenues of
the business to be acquired are less than $25 million. We agree with
the commenters that the $25 million ceiling was related to the small
business issuer definition, and since we are creating a new definition
of smaller reporting company to replace the small business issuer
definition that contains a $50 million revenue ceiling, it is
appropriate to raise the Rule 3-05 ceiling to $50 million.
---------------------------------------------------------------------------
\113\ See Letters from Grant Thornton, KPMG, and CAQ.
---------------------------------------------------------------------------
For purposes of the Paperwork Reduction Act, as adopted, the burden
changes are insignificant for companies that currently meet the small
business issuer definition. We did not receive any comment letters
providing data or other information concerning legal or accounting
costs that would cause us to change our view.
VI. Cost-Benefit Analysis
A. Background
We have adopted amendments to eliminate our ``SB'' forms and move
the Regulation S-B item requirements into amended Regulations S-K and
S-X. The amendments will amend all relevant rules and forms under the
Securities Act, the Exchange Act, and the Trust Indenture Act to
replace the existing references to ``small business issuer'' to
reference to ``smaller reporting company.'' The new ``smaller reporting
company'' definition will replace the current ``small business issuer''
eligibility standards to allow a greater number of public companies to
provide disclosure based on the scaled disclosure requirements. The new
definition for smaller reporting company will include companies with a
public float of less than $75 million and will therefore be a
significant increase from the $25 million levels for public float and
revenue under the current ``small business issuer'' definition. For
companies without a public float, we are requiring an alternative
ceiling of below $50 million in revenue in the previous year.
B. Summary of Rules
As noted above, the amendments will eliminate the separate
disclosure framework of Regulation S-B by moving those requirements
into Regulation S-K and the financial disclosure into Regulation S-X.
The new definition for ``smaller reporting company'' will expand the
number of filers that will qualify to provide disclosure under the
scaled item requirements of the current Regulation S-B framework.
Smaller reporting companies and non-accelerated filers will both be
subject to Regulation S-K, but smaller reporting companies will have
the option to provide disclosure on an item-by-item basis according to
the scaled item requirements of amended Regulation S-K. The newly
adopted amendments will allow eligible smaller reporting companies to
do the following:
Provide three years rather than five years of business
development activities, and not be required to
[[Page 948]]
provide segment disclosure under amended Item 101 of Regulation S-K;
Not provide disclosure required by Items 301 and 302
relating to selected financial data and supplementary financial
information;
Provide more streamlined disclosure for management's
discussion and analysis of financial condition and results of
operations found in Item 303 by requiring only two years of analysis if
the company is presenting only two years of financial statements,
instead of three years currently required of larger companies;
Provide audited balance sheets, audited statements of
income, cash flows and changes in stockholders' equity for each of the
last two fiscal years in new Article 8 of Regulation S-X instead of an
audited balance sheet as of the end of the last two fiscal years and
audited statement of income, cash flows and changes in stockholders'
equity for each of the last three fiscal years as required by other
parts of Regulation S-X;
Provide disclosure about the chief executive officer and
two other highly compensated executive officers only, rather than the
information for the Chief Executive Officer, Chief Financial Officer
and three other executive officers required of larger registrants;
Not provide a Compensation Discussion and Analysis
required of larger reporting companies;
Provide only three of the seven tables (Summary
Compensation, Outstanding Equity Awards, and Director Compensation)
required of larger reporting companies; and
Not provide disclosure regarding the company's policies
and procedures for approving related person transactions. Smaller
reporting companies will be required, however, to provide disclosure
regarding a transaction where the amount exceeds the lesser of 1% of a
smaller company's total assets or $120,000. They also will be required
to provide additional specific information about underwriting discounts
and commissions and corporate parents. Additionally, smaller reporting
companies will be required to provide disclosure regarding promoters
and certain control persons.
C. Benefits
As discussed above, the amendments adopted today will promote
regulatory simplification by eliminating all ``SB'' forms and
consolidating the Regulation S-B disclosure item requirements into
Regulation S-K. The integrated Regulation S-K regime will enable a
larger category of public companies to have more flexibility in
tailoring disclosure standards to fit the need of investors and the
realities of their company. We believe investors will benefit from the
scaled disclosure amendments to Regulation S-K because the amendments
allow issuers to make disclosure based on the size, business
operations, and financial condition of the smaller reporting company.
Allowing smaller reporting companies to choose scaled disclosure on an
item-by-item basis allows companies to tailor their disclosure to
reduce costs and thereby benefit shareholders. The increased public
float standards in the definition of smaller reporting company will
allow more companies the flexibility to choose between scaled item
requirements such as financial statement information and executive
compensation disclosure. By doing so, these newly eligible companies
can appropriately determine the information needs of their investors in
light of the costs of providing that information. Thus, moving the
scaled disclosure requirements of Regulation S-B into Regulations S-K
and S-X will provide regulatory flexibility that gives companies the
ability to allocate resources to increased disclosure only in instances
where they believe doing so would provide a benefit to shareholders.
Eliminating the ``SB'' forms will mitigate any perceived notion
that smaller companies are currently reporting under a completely
different and inferior disclosure framework. If current Regulation S-B
filers are inappropriately penalized by the market for this perceived
notion, as some commenters have suggested, then integrating Regulation
S-B and Regulation S-K should benefit shareholders by decreasing the
company's cost of capital. To the extent that these amendments
eliminate the perceived notion of an inferior disclosure framework, we
believe that these amendments will increase the benefits and in some
instances, reduce the costs of being a public company and will benefit
the capital markets by encouraging private companies to consider
offerings that are registered under the Securities Act or to enter the
Exchange Act reporting system.
As amended, an integrated disclosure system for all companies
filing forms using Regulation S-K will promote efficiency because
practitioners and investors will refer to one disclosure framework.
Filers and their practitioners will have one consolidated regulation to
find all relevant disclosure item requirements, which will reduce
complexity and improve regulatory efficiencies. Although some
commenters \114\ were concerned that finding the scaled disclosure
provisions in Regulation S-K would be inefficient, the index of scaled
disclosure in new Item 10(f) should mitigate this concern. For some
smaller reporting companies, legal and accounting costs may decrease.
---------------------------------------------------------------------------
\114\ See e.g. Letters from Grant Thornton and BDO.
---------------------------------------------------------------------------
As discussed earlier in this release, we estimate that
approximately 1,581 new companies will have an opportunity to use the
restructured scaled disclosure requirements for smaller reporting
companies and may experience significant burden and cost savings if
they use them.\115\ We assume that approximately 50% of the 1,581
companies (or 790 companies) will use the scaled disclosure
requirements. For purposes of the Paperwork Reduction Act, we estimate
that these 790 smaller reporting companies may save 356,290 internal
burden hours and costs in the amount of $47,479,000 by using the scaled
disclosure requirements. \116\
---------------------------------------------------------------------------
\115\ We estimate that 1,227 companies would be newly eligible
to use the scaled disclosure available to smaller reporting
companies in addition to another 354 companies that currently are
eligible for scaled disclosure but do not use it, resulting in a
total of 1,581 companies. Approximately 1,227 companies have a
public float between $25 and $75 million, in addition to
approximately 354 companies with a public float below $25 million
that currently use the ``SK'' forms rather than the ``SB'' forms.
\116\ This estimate of a decrease in the compliance burden by
356,290 hours is based upon 790 responses by companies using regular
Regulation S-K disclosure x 1,723 internal hours per company =
1,361,170 hours minus 790 responses by companies x 1,272 internal
hours per company = 1,004,880 hours for smaller reporting companies
and a decrease in the annual cost by $47,479,000 (574.25
professional hours x $400 per hour = $229,700 cost per response
using regular Regulation S-K disclosure x 790 responses minus 424
professional hours x $400 per hour = $169,600 cost per response
using the scaled disclosure x 790 annual responses).
---------------------------------------------------------------------------
Finally, another benefit to smaller reporting companies is that by
using Registration Statement Form S-1, a company may be permitted to
incorporate by reference its previously filed periodic reports. We
believe that this will result in some cost savings and efficiencies in
preparing registration statements for smaller reporting companies.
D. Costs
In our view, the elimination of the ``SB'' forms and moving the
Regulation S-B disclosure standards into Regulation S-K and financial
disclosure into Regulation S-X will not significantly increase the
costs of complying with the Commission's rules.
The disclosure requirements will not change except in minor ways
for current small business issuers that previously
[[Page 949]]
filed under Regulation S-B, so we do not anticipate any increase in
costs due to the change in disclosure requirements.\117\
---------------------------------------------------------------------------
\117\ For current ``SB'' filers, we estimate the net difference
of reporting under Regulation S-K will be an increase of 4,405.5
burden hours and a cost of $5,257,200 for purposes of the Paperwork
Reduction Act.
---------------------------------------------------------------------------
Four commenters \118\ stated that these proposals may have
unintended consequences, such as extra legal and accounting costs. One
of these commenters \119\ expressed concern that moving the disclosure
requirements of Regulation S-B into Regulation S-K would only benefit
small issuers if the legal and accounting costs do not increase. The
commenter did not provide any data or information to support its
position that costs could increase. The amount of disclosure a former
small business issuer will provide on the ``SK'' forms should not
increase unless the issuer chooses to provide additional disclosure
above the required disclosure. We have added a heading entitled
``Smaller Reporting Companies'' to Items where scaled disclosure is
available for smaller reporting companies. This will alleviate the
concern that small issuers need guidance in determining what disclosure
requirements apply to them.\120\ Thus, we do not believe that there
should be any significant additional out-of-pocket costs associated
with compliance.
---------------------------------------------------------------------------
\118\ See Letters from IASBDA, SBA Office of Advocacy, Center
for Capital Markets (U.S. Chamber of Commerce), and Prof. James
Angel.
\119\ See Letter from IASBDA.
\120\ See Letter from Prof. James Angel.
---------------------------------------------------------------------------
We recognize that some of the 1,581 companies may choose to avail
themselves of the scaled disclosure requirements when they have
complied with standard Regulation S-K previously. In addition, the
amount of disclosure reviewed by the Commission's staff may change for
these companies. The staff will now evaluate compliance with Regulation
S-K on the scaled disclosure requirements available to smaller
reporting companies even if the company previously chose to comply with
the larger company Regulation S-K disclosure requirements. If the
amount of disclosure and corresponding SEC review under the prior
reporting standard was valued by investors, using scaled disclosure may
increase a company's cost of capital. Because the differences in
smaller and larger company disclosure standards are small, however, we
believe that any such costs will be minimal.
Investors may face additional costs in determining whether a newly
eligible smaller reporting company has changed the amount of disclosure
it provides to investors or whether the company continues to provide
the maximum required disclosure. Allowing smaller reporting companies
to choose financial statement items on an ``a la carte'' basis in a
quarterly report may create additional costs for investors to determine
whether the company has changed the type of disclosure from quarter to
quarter. Since smaller reporting companies will be required to check a
box indicating they qualify as such, however, investors will be alerted
that these issuers are eligible to use the scaled disclosure
requirements.
Another possible cost is requiring Canadian issuers, who seek to
use the new scaled disclosure requirements, to provide their financial
statements using U.S. GAAP rather than home country GAAP reconciled to
U.S. GAAP. Based upon the Form 10-KSB filings received from Canadian
issuers on the Commission's EDGAR filing system we estimate that under
50 Canadian issuers will be affected by this change. This change could
increase audit costs for these companies if they chose to continue to
file on the domestic forms which will now require financial statements
in accordance with U.S. GAAP. Other cost increases could include staff
training, administrative costs, and minor transition costs.
VII. Consideration of Impact on the Economy, Burden on Competition and
Promotion of Efficiency, Competition and Capital Formation
Section 23(a)(2) of the Exchange Act requires us to consider the
impact that any new rule will have on competition.\121\ Section
23(a)(2) also prohibits us from adopting any rule that will impose a
burden on competition not necessary or appropriate to carry out the
purposes of the Exchange Act.
---------------------------------------------------------------------------
\121\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------
Furthermore, when engaging in rulemaking that requires us to
consider or determine whether an action is necessary or appropriate in
the public interest, Section 2(b) of the Securities Act and Section
3(f) of the Exchange Act require the Commission to consider whether the
action will promote efficiency, competition and capital formation.
We expect that the amendments adopted today will result in
regulatory simplification and efficiency by removing the duplicative
sections of Regulation S-B and consolidating the scaled item
requirements of Regulation S-B, such as executive compensation, into
amended Regulation S-K. As adopted, the financial statement
requirements for small business issuers previously found in Item 310
will be in a separate section of Regulation S-X. As amended,
Regulations S-K and S-X will consolidate these requirements into a
simplified framework applicable to all filers that are subject to the
reporting requirements of Sections 13 and 15 of the Exchange Act and
companies filing registration statements under the Securities Act. To
comply with disclosure item requirements, practitioners and companies
will no longer need to refer to two disclosure frameworks.
Practitioners and companies will benefit from the ease of reference
that a single disclosure framework will provide.
It is expected that the amendments will promote capital formation
for smaller reporting companies and improve their ability to compete
with larger companies for capital. For example, we believe capital
formation will be improved by providing flexibility to more smaller
reporting companies to tailor their disclosure to their investors'
needs. In addition, the costs to raise capital may be reduced to the
extent compliance costs, but not benefits, are reduced as a result of
the scaled disclosure requirements. If smaller reporting companies
allocate the capital they raise and save as a result of our scaled
disclosure requirements to business development in an effective manner,
these companies will be more competitive. More companies will be able
to take advantage of more scaled disclosure item requirements, such as
those contained currently in Item 310 and Item 402 of Regulation S-B.
Smaller reporting companies that avail themselves of the scaled
disclosure requirements will provide tailored disclosure that may
better meet the needs of their investors.
VIII. Final Regulatory Flexibility Act Analysis
This Final Regulatory Flexibility Analysis has been prepared in
accordance with the Regulatory Flexibility Act.\122\ It relates to
amendments to the rules and forms under the Securities Act and Exchange
Act, which include a new definition of ``smaller reporting company''
under Regulation S-K. The new definition will expand the group of
smaller companies that qualify to provide disclosure in accordance with
the scaled
[[Page 950]]
requirements of the current Regulation S-B disclosure framework.
---------------------------------------------------------------------------
\122\ 5 U.S.C. 604.
---------------------------------------------------------------------------
As adopted, a smaller reporting company is defined as a company
that meets all of the following criteria: Is not an investment company,
an asset-backed issuer, or the majority-owned subsidiary of a parent
that was not a smaller reporting company; had a public float of less
than $75 million as of the last business day of its most recently
completed second fiscal quarter; and in the case of an issuer whose
public float was zero, had annual revenues of less than $50 million
during its most recently completed fiscal year for which audited
financial statements are available on the date of the filing.
The amendments also will eliminate the separate disclosure regime
of Regulation S-B by removing all related ``SB'' forms and merging the
Regulation S-B item requirements into Regulation S-K, except for Item
310 (Financial statements) which move into Regulation S-X. The
revisions to Regulations S-K and S-X include revising item requirements
to offer smaller reporting companies optional disclosure alternatives
that are designed to provide flexibility, cost efficiencies and
regulatory simplification.
A. Reasons for and Objectives of Amendments
1. The Advisory Committee on Smaller Public Companies Recommended
Scaled Federal Securities Regulation for Smaller Companies
In March 2005, the Commission chartered the Advisory Committee on
Smaller Public Companies to assess the current regulatory system for
smaller companies under the federal securities laws, including the
disclosure and reporting requirements applicable to smaller companies,
and to make recommendations for changes to improve regulatory
conditions for smaller companies.
After receiving public input, the Advisory Committee made three
recommendations in the disclosure area, which included making the
scaled disclosure accommodations available to small business issuers
available to all microcap companies, incorporating Regulation S-B into
Regulation S-K, and incorporating Item 310 of Regulation S-B into
Regulation S-K or Regulation S-X to make the scaled financial statement
accommodations available to a much larger group of smaller companies.
2. Expanding Eligibility for Smaller Company Scaled Regulation Under
Amended Regulation S-K
To make the scaled requirements of the Regulation S-B disclosure
framework applicable to many more companies, the Advisory Committee
recommended revising the definition of ``small business issuer'' to
include a company with a higher public float threshold than the $25
million ceiling currently required in the small business issuer
definition found in Item 10 of Regulation S-B.
Although the Advisory Committee did not recommend that we use a
public float threshold, the $75 million public float threshold adopted
is based on the reference to that number in the accelerated filer
definition set forth in Rule 12b-2 of the Exchange Act. To maintain
consistency with current regulation, we believe setting a public float
threshold based on the current levels established for non-accelerated
filers is practical and avoids regulatory complexity.
3. Integrating Substantive Requirements of Regulation S-B Into
Regulations S-K and S-X
The overall goal of the rule amendments is to integrate the scaled
disclosure requirements of Regulation S-B into Regulation S-K and make
these scaled disclosure requirements available to more companies as
smaller reporting companies. We believe the amendments will:
Further the goals of regulatory simplification by
eliminating the current Regulation S-B framework as a separate stand-
alone disclosure standard for the smallest reporting companies;
Update the public float threshold and eliminate the
revenue threshold restriction in the current ``small business issuer''
definition to accommodate many more companies that are contemplating an
offering registered under the Securities Act or entry into the Exchange
Act reporting system;
Streamline and modernize forms under the Securities Act
and the Exchange Act by eliminating all of the ``SB'' forms; and
Provide regulatory flexibility by permitting smaller
reporting companies to provide the same financial statement information
previously found in Item 310 of Regulation S-B into Regulation S-X.
B. Significant Issues Raised by Public Comment
The initial Regulatory Flexibility Act analysis appeared in the
Proposing Release. We requested comment on any aspect of the Initial
Regulatory Flexibility Act analysis, especially empirical data on the
impact on small businesses.
In the Proposing Release we stated that the proposed elimination of
Regulation S-B and the ``SB'' forms will not increase significantly the
costs of complying with the Commission's rules. While we still believe
this is the case, we received four comment letters \123\ expressing
concern that the proposals could increase legal and accounting costs.
One of these commenters \124\ stated that ``this type of one-size-fits-
all regulation may have unintended consequences such as extra legal and
accounting costs.'' Another commenter \125\ stated that the proposals
would not increase costs and that the backwards incorporation by
reference on Form S-1 would save burden hours and costs.
---------------------------------------------------------------------------
\123\ See Letters from IASBDA, SBA Office of Advocacy, Center
for Capital Markets (U.S. Chamber of Commerce), and Prof. James
Angel.
\124\ See Letter from the SBA Office of Advocacy.
\125\ See Letter from ABA.
---------------------------------------------------------------------------
As stated above, in response to the commenters' concerns about the
transition from Regulation S-B and the ``SB'' forms to Regulation S-K
and the ``SK'' forms, we have added a transition provision for
companies that are current ``SB'' filers. These companies will have the
choice of filing their next annual report due after the effective date
on either a Form 10-KSB or a Form 10-K. Similarly, they may file any
quarterly reports for periods before the next annual report due on
either Form 10-QSB or Form 10-Q. Reports filed after the next annual
report due may no longer be on the ``SB'' forms.
C. Small Entities Subject to the Amendments
The amendments will affect small entities, the securities of which
are registered under Section 12 of the Exchange Act or that are
required to file reports under Section 15(d) of the Exchange Act. The
amendments also will affect small entities that file, or have filed, a
registration statement that has not yet become effective under the
Securities Act and that has not been withdrawn. Securities Act Rule 157
\126\ and Exchange Act Rule 0-10(a) \127\ define an issuer to be a
``small entity'' for purposes of the Regulatory Flexibility Act if it
had total assets of $5 million or less on the last day of its most
recent fiscal year. We believe the amendments will affect some small
entities. We estimate that there are
[[Page 951]]
approximately 1,100 issuers that may be considered small entities.\128\
Further, we estimate that virtually all of the 1,100 small entities
would be below $75 million in public equity float and will qualify for
the scaled disclosure requirements.
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\126\ 17 CFR 230.157.
\127\ 17 CFR 240.0-10(a).
\128\ The estimated number of reporting small entities is based
on 2007 data including the Commission's internal computerized filing
system and Thomson Financials Worldscope database. This represents
an update from the number of reporting small entities estimated in
prior rulemakings.
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D. Reporting, Recordkeeping, and Other Compliance Requirements
As adopted, moving Regulation S-B requirements into Regulations S-K
and S-X and rescinding all of the ``SB'' forms will shift the location
of disclosure requirements and will require smaller reporting companies
to adapt to new formats in preparing their disclosure for Form S-1. The
amendments to Regulation S-K include a new definition for smaller
reporting company, which broadens the category of filers preparing
disclosure to comply with the scaled item requirements of amended
Regulation S-K. Companies with public floats between $25 and $75
million will be included in the class of filers that is eligible to
provide disclosure based on the scaled requirements of proposed
revisions to amended Regulation S-K. As adopted today, the scope and
presentation of information disclosed based on the item requirements of
amended Regulations S-K and S-X will differ in a number of significant
ways from the current Regulation S-K disclosure framework. Amended
Regulation S-K will allow smaller reporting companies to:
Provide three years rather than five years of business
development activities, and not be required to provide segment
disclosure under amended Item 101 of Regulation S-K;
Not provide disclosure required by Items 301 and 302
relating to selected financial data and supplementary financial
information;
Provide more streamlined disclosure for management's
discussion and analysis of financial condition and results of
operations found in Item 303 by requiring only two years of analysis if
the company is presenting only two years of financial statements,
instead of the three years currently required of larger companies;
Provide audited balance sheets, audited statements of
income, cash flows and changes in stockholders' equity for each of the
last two fiscal years in new Article 8 of Regulation S-X instead of an
audited balance sheet as of the end of the last two fiscal years and
audited statement of income, cash flows and changes in stockholders'
equity for each of the last three fiscal years as required by other
parts of Regulation S-X;
Provide disclosure about the chief executive officer and
two other highly compensated executive officers only, rather than the
information for the Chief Executive Officer, Chief Financial Officer
and three other executive officers required of larger registrants;
Not provide a Compensation Discussion and Analysis
required of larger reporting companies;
Provide only three of the seven tables (Summary
Compensation, Outstanding Equity Awards, and Director Compensation)
required of larger reporting companies; and
Not provide disclosure regarding the company's policies and
procedures for approving related person transactions. Smaller reporting
companies will be required, however, to provide disclosure regarding a
transaction where the amount exceeds the lesser of 1% of a smaller
company's total assets or $120,000. They also will be required to
provide additional specific information about underwriting discounts
and commissions and corporate parents. Additionally, smaller reporting
companies will be required to provide disclosure regarding promoters
and certain control persons. The amendments to Regulation S-K will not
generally increase the disclosure requirements for former small
business issuers, and could decrease the disclosure required for
issuers with public float levels between $25 million and $75 million.
Amended Item 404 of Regulation S-K is the only example where it is
possible that the disclosure required for smaller reporting companies
will be more extensive than for standard Regulation S-K filers. In
addition to a longer time period for required disclosure, as discussed
above, Item 404 contains a provision that requires disclosure of
transactions with related persons that exceed the lesser of $120,000 or
1% of the average of the smaller reporting company's total assets at
the fiscal year end for the last two completed fiscal years. This
requirement may be more burdensome to a smaller reporting company if 1%
of total assets are less than $120,000. We believe transactions
involving related persons are important to disclose, especially for
smaller reporting companies, which generally have lower materiality
thresholds. We believe these differences are important for the
protection of investors. This disclosure issue will only affect smaller
reporting companies that have related person transactions.
E. Agency Action To Minimize Effect on Small Entities
The Regulatory Flexibility Act directs us to consider significant
alternatives that will accomplish the stated objectives, while
minimizing any significant adverse impact on small entities. In
connection with the proposals, we considered the following
alternatives:
(a) Establishing different compliance or reporting requirements
which take into account the resources available to smaller entities;
(b) The clarification, consolidation or simplification of
disclosure for small entities;
(c) Use of performance standards rather than design standards; and
(d) Exempting smaller entities from coverage of the disclosure
requirements or any part thereof.
As adopted, our amendments are intended to maintain current
disclosure standards for small entities while further expanding the
scope of eligibility for companies that elect to comply with the scaled
disclosure item requirements currently set forth in Regulation S-B.
These changes do not exempt smaller entities from coverage of the
disclosure requirements; rather, they provide a greater number of
smaller reporting companies the choice to provide scaled disclosure
within Regulations S-K and S-X.
As adopted, the new definition for smaller reporting company will
eliminate the current $25 million revenue threshold and increase the
public float threshold requirement up to $75 million from the $25
million level currently set forth in the small business issuer
definition of Regulation S-B. We believe that the $75 million threshold
will appropriately result in reduced costs to smaller companies caused
by unnecessary information requirements, consistent with investor
protection. This is also consistent with our current regulatory system.
We considered alternatives such as including a revenue cap in the
new definition of smaller reporting company, but currently believe that
only requiring less than $75 million in public float is preferable,
given its ease of reference and consistency with current rules under
the Securities Act and the Exchange Act. We also seriously considered
the comment letters submitted by the public. Some of the letters urged
the Commission to use market capitalization instead of public float as
a metric to determine eligibility as a smaller reporting company, but
[[Page 952]]
again, use of a float test provides more regulatory consistency.
As adopted, we will consolidate, clarify, and simplify our
disclosure requirements by moving Regulation S-B into Regulations S-K
and S-X. These amendments include a new definition of smaller reporting
company, which greatly expands the number of small entities that will
qualify to provide disclosure based on the scaled disclosure item
requirements of the current Regulation S-B framework. We considered
maintaining the Regulation S-B framework and making it available to
many more companies, but we were not convinced by commenters that the
Commission should not eliminate Regulation S-B and the ``SB'' forms. We
still believe a single disclosure framework will be more cost effective
and more efficient. The elimination of the ``SB'' forms will result in
regulatory simplification for smaller entities by requiring all
registrants to rely on one set of forms, such as Forms S-1, S-3, 10-K
and 10-Q. These forms will include scaled item requirements for smaller
reporting companies under the amendments adopted today for Regulations
S-K and S-X.
Finally, we considered the use of performance rather than design
standards but concluded that, although we allow some tailoring,
investors need a basic level of consistency, uniformity and
comparability among issuers in order to make appropriate investment
decisions.
IX. Statutory Basis and Text of Amendments
The rule amendments described in this release are being adopted
pursuant to Sections 6, 7, 10, and 19(a) of the Securities Act, as
amended, Sections 12, 13, 14(a), 15(d), and 23(a) of the Exchange Act,
as amended, and Section 319(a) of the Trust Indenture Act, as amended.
List of Subjects
17 CFR Part 228
Reporting and recordkeeping requirements, Securities, Small
businesses.
17 CFR Parts 210, 229, 230, 239, 240, 249, 260, and 269
Reporting and recordkeeping requirements, Securities.
0
For the reasons set out in the preamble, Title 17, Chapter II of the
Code of Federal Regulations is amended as follows:
PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL
STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF
1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT
COMPANY ACT OF 1940, INVESTMENT ADVISERS ACT OF 1940, AND ENERGY
POLICY AND CONSERVATION ACT OF 1975
0
1. The authority citation for part 210 continues to read as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77aa(25), 77aa(26), 78c, 78j-1, 78l, 78m, 78n, 78o(d), 78q, 78u-5,
78w(a), 78ll, 78mm, 80a-8, 80a-20, 80a-29, 80a-30, 80a-31, 80a-
37(a), 80b-3, 80b-11, 7202 and 7262, unless otherwise noted.
0
2. Amend Sec. 210.3-01 by revising paragraphs (b), paragraph (c)
introductory text and (f) to read as follows:
Sec. 210.3-01 Consolidated balance sheets.
* * * * *
(b) If the filing, other than a filing on Form 10-K or Form 10, is
made within 45 days after the end of the registrant's fiscal year and
audited financial statements for the most recent fiscal year are not
available, the balance sheets may be as of the end of the two preceding
fiscal years and the filing shall include an additional balance sheet
as of an interim date at least as current as the end of the
registrant's third fiscal quarter of the most recently completed fiscal
year.
(c) The instruction in paragraph (b) of this section is also
applicable to filings, other than on Form 10-K or Form 10, made after
45 days but within the number of days of the end of the registrant's
fiscal year specified in paragraph (i) of this section: Provided, that
the following conditions are met:
* * * * *
(f) Any interim balance sheet provided in accordance with the
requirements of this section may be unaudited and need not be presented
in greater detail than is required by Sec. 210.10-01. Notwithstanding
the requirements of this section, the most recent interim balance sheet
included in a filing shall be at least as current as the most recent
balance sheet filed with the Commission on Form 10-Q.
* * * * *
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3. Amend Sec. 210.3-05 by revising paragraph (b)(2)(iv) to read as
follows:
Sec. 210.3-05 Financial statements of businesses acquired or to be
acquired.
* * * * *
(b) * * *
(2) * * *
(iv) If any of the conditions exceed 50 percent, the full financial
statements specified in Sec. Sec. 210.3-01 and 210.3-02 shall be
furnished. However, financial statements for the earliest of the three
fiscal years required may be omitted if net revenues reported by the
acquired business in its most recent fiscal year are less than $50
million.
* * * * *
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4. Amend Sec. 210.3-10 by revising paragraphs (h)(3) and (h)(4) to
read as follows:
Sec. 210.3-10 Financial statements of guarantors and issuers of
guaranteed securities registered or being registered.
* * * * *
(h) * * *
(3) Annual report refers to an annual report on Form 10-K or Form
20-F (Sec. 249.310 or 249.220f of this chapter).
(4) Quarterly report refers to a quarterly report on Form 10-Q
(Sec. 249.308a of this chapter).
* * * * *
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5. Amend Sec. 210.3-12 by revising paragraphs (a) and (d) to read as
follows:
Sec. 210.3-12 Age of financial statements at effective date of
registration statement or at mailing date of proxy statement.
(a) If the financial statements in a filing are as of a date the
number of days specified in paragraph (g) of this section or more
before the date the filing is expected to become effective, or proposed
mailing date in the case of a proxy statement, the financial statements
shall be updated, except as specified in the following paragraphs, with
a balance sheet as of an interim date within the number of days
specified in paragraph (g) of this section and with statements of
income and cash flows for the interim period between the end of the
most recent fiscal year and the date of the interim balance sheet
provided and for the corresponding period of the preceding fiscal year.
Such interim financial statements may be unaudited and need not be
presented in greater detail than is required by Sec. 210.10-01.
Notwithstanding the above requirements, the most recent interim
financial statements shall be at least as current as the most recent
financial statements filed with the Commission on Form 10-Q.
* * * * *
(d) The age of the registrant's most recent audited financial
statements included in a registration statement filed under the
Securities Act of 1933 or filed on Form 10 (17 CFR 249.210) under the
Securities Exchange Act of 1934 shall not be more than one year and 45
days old at the date the
[[Page 953]]
registration statement becomes effective if the registration statement
relates to the security of an issuer that was not subject, immediately
before the time of filing the registration statement, to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of
1934.
* * * * *
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6. Amend Sec. 210.3-14 by removing the authority citations following
the section and revising paragraph (b) to read as follows:
Sec. 210.3-14 Special instructions for real estate operations to be
acquired.
* * * * *
(b) Information required by this section is not required to be
included in a filing on Form 10-K.
0
7. Amend Sec. 210.4-01 by revising paragraphs (a)(3)(i)(A) and
(a)(3)(i)(B) to read as follows:
Sec. 210.4-01 Form, order, and terminology.
(a) * * *
(3)(i) * * *
(A) The first interim or annual reporting period of the
registrant's first fiscal year beginning on or after June 15, 2005,
provided the registrant does not file as a smaller reporting company;
and
(B) The first interim or annual reporting period of the
registrant's first fiscal year beginning on or after December 15, 2005,
provided the registrant files as a smaller reporting company.
* * * * *
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8. An undesignated center heading and Sec. Sec. 210.8-01 through
210.8-08 are added before the undesignated heading ``Bank Holding
Companies'' to read as follows:
Article 8 Financial Statements of Smaller Reporting Companies
Sec.
210.8-01 Preliminary Notes to Article 8.
210.8-02 Annual financial statements.
210.8-03 Interim financial statements.
210.8-04 Financial statements of businesses acquired or to be
acquired.
210.8-05 Pro forma financial information.
210.8-06 Real estate operations acquired or to be acquired.
210.8-07 Limited partnerships.
210.8-08 Age of financial statements.
* * * * *
Sec. 210.8-01 Preliminary Notes to Article 8.
Sections 210.8-01 to 210.8-08 shall be applicable to financial
statements filed for smaller reporting companies. These sections are
not applicable to financial statements prepared for the purposes of
Item 17 or Item 18 of Form 20-F.
Note 1 to Sec. 210.8: Financial statements of a smaller
reporting company, as defined by Sec. 229.10(f)(1) of this chapter,
its predecessors or any businesses to which the smaller reporting
company is a successor shall be prepared in accordance with
generally accepted accounting principles in the United States.
Note 2 to Sec. 210.8: Smaller reporting companies electing to
prepare their financial statements with the form and content
required in this article need not apply the other form and content
requirements in Regulation S-X with the exception of the following:
a. The report and qualifications of the independent accountant
shall comply with the requirements of Article 2 of this part;
b. The description of accounting policies shall comply with
Article 4-08(n) of this part; and
c. Smaller reporting companies engaged in oil and gas producing
activities shall follow the financial accounting and reporting
standards specified in Article 4-10 of this part with respect to
such activities.
To the extent that Article 11-01 of this part (Pro Forma
Presentation Requirements) offers enhanced guidelines for the
preparation, presentation and disclosure of pro forma financial
information, smaller reporting companies may wish to consider these
items.
Note 3 to Sec. 210.8: Financial statements for a subsidiary of
a smaller reporting company that issues securities guaranteed by the
smaller reporting company or guarantees securities issued by the
smaller reporting company must be presented as required by Sec.
210.3-10, except that the periods presented are those required by
Sec. 210.8-02.
Note 4 to Sec. 210.8: Financial statements for a smaller
reporting company's affiliates whose securities constitute a
substantial portion of the collateral for any class of securities
registered or being registered must be presented as required by
Sec. 210.3-16, except that the periods presented are those required
by Sec. 210.8-02.
Note 5 to Sec. 210.8: The Commission, where consistent with the
protection of investors, may permit the omission of one or more of
the financial statements or the substitution of appropriate
statements of comparable character. The Commission by informal
written notice may require the filing of other financial statements
where necessary or appropriate.
Note 6 to Sec. 210.8: Section 210.4-01(a)(3) shall apply to the
preparation of financial statements of smaller reporting companies.
Sec. 210.8-02 Annual financial statements.
Smaller reporting companies shall file an audited balance sheet as
of the end of each of the most recent two fiscal years, or as of a date
within 135 days if the issuer has existed for a period of less than one
fiscal year, and audited statements of income, cash flows and changes
in stockholders' equity for each of the two fiscal years preceding the
date of the most recent audited balance sheet (or such shorter period
as the registrant has been in business).
Sec. 210.8-03 Interim financial statements.
Interim financial statements may be unaudited; however, before
filing, interim financial statements included in quarterly reports on
Form 10-Q (Sec. 249.308(a) of this chapter) must be reviewed by an
independent public accountant using professional standards and
procedures for conducting such reviews, as established by generally
accepted auditing standards, as may be modified or supplemented by the
Commission. If, in any filing, the issuer states that interim financial
statements have been reviewed by an independent public accountant, a
report of the accountant on the review must be filed with the interim
financial statements. Interim financial statements shall include a
balance sheet as of the end of the issuer's most recent fiscal quarter,
a balance sheet as of the end of the preceding fiscal year, and income
statements and statements of cash flows for the interim period up to
the date of such balance sheet and the comparable period of the
preceding fiscal year.
(a) Condensed format. Interim financial statements may be condensed
as follows:
(1) Balance sheets should include separate captions for each
balance sheet component presented in the annual financial statements
that represents 10% or more of total assets. Cash and retained earnings
should be presented regardless of relative significance to total
assets. Registrants that present a classified balance sheet in their
annual financial statements should present totals for current assets
and current liabilities.
(2) Income statements should include net sales or gross revenue,
each cost and expense category presented in the annual financial
statements that exceeds 20% of sales or gross revenues, provision for
income taxes, discontinued operations, extraordinary items and
cumulative effects of changes in accounting principles or practices.
(Financial institutions should substitute net interest income for sales
for purposes of determining items to be disclosed.) Dividends per share
should be presented.
(3) Cash flow statements should include cash flows from operating,
investing and financing activities as well as cash at the beginning and
end of each period and the increase or decrease in such balance.
(4) Additional line items may be presented to facilitate the
usefulness of the interim financial statements,
[[Page 954]]
including their comparability with annual financial statements.
(b) Disclosure required and additional instructions as to content--
(1) Footnotes. Footnote and other disclosures should be provided as
needed for fair presentation and to ensure that the financial
statements are not misleading.
(2) Material subsequent events and contingencies. Disclosure must
be provided of material subsequent events and material contingencies
notwithstanding disclosure in the annual financial statements.
(3) Significant equity investees. Sales, gross profit, net income
(loss) from continuing operations and net income must be disclosed for
equity investees that constitute 20% or more of a registrant's
consolidated assets, equity or income from continuing operations.
(4) Significant dispositions and purchase business combinations. If
a significant disposition or purchase business combination has occurred
during the most recent interim period and the transaction required the
filing of a Form 8-K (Sec. 249.308 of this chapter), pro forma data
must be presented that reflects revenue, income from continuing
operations, net income and income per share for the current interim
period and the corresponding interim period of the preceding fiscal
year as though the transaction occurred at the beginning of the
periods.
(5) Material accounting changes. Disclosure must be provided of the
date and reasons for any material accounting change. The registrant's
independent accountant must provide a letter in the first Form 10-Q
(Sec. 249.308a of this chapter) filed after the change indicating
whether or not the change is to a preferable method. Disclosure must be
provided of any retroactive change to prior period financial
statements, including the effect of any such change on income and
income per share.
(6) Development stage companies. A registrant in the development
stage must provide cumulative financial information from inception.
Instruction 1 to Sec. 210.8-03: Where Article 8 is applicable
to a Form 10-Q and the interim period is more than one quarter,
income statements must also be provided for the most recent interim
quarter and the comparable quarter of the preceding fiscal year.
Instruction 2 to Sec. 210.8-03: Interim financial statements
must include all adjustments that, in the opinion of management, are
necessary in order to make the financial statements not misleading.
An affirmative statement that the financial statements have been so
adjusted must be included with the interim financial statements.
Sec. 210.8-04 Financial statements of businesses acquired or to be
acquired.
(a) If a business combination accounted for as a ``purchase'' has
occurred or is probable, financial statements of the business acquired
or to be acquired shall be furnished for the periods specified in
paragraph (c) of this section:
(1) The term ``purchase'' encompasses the purchase of an interest
in a business accounted for by the equity method.
(2) Acquisitions of a group of related businesses that are probable
or that have occurred subsequent to the latest fiscal year end for
which audited financial statements of the issuer have been filed shall
be treated as if they are a single business combination for purposes of
this section. The required financial statements of related businesses
may be presented on a combined basis for any periods they are under
common control or management. A group of businesses is deemed to be
related if:
(i) They are under common control or management;
(ii) The acquisition of one business is conditioned on the
acquisition of each other business; or
(iii) Each acquisition is conditioned on a single common event.
(3) Annual financial statements required by this rule shall be
audited. The form and content of the financial statements shall be in
accordance with Sec. Sec. 210.8-02 and 8-03.
(b) The periods for which financial statements are to be presented
are determined by comparison of the most recent annual financial
statements of the business acquired or to be acquired and the smaller
reporting company's most recent annual financial statements filed at or
before the date of acquisition to evaluate each of the following
conditions:
(1) Compare the smaller reporting company's investments in and
advances to the acquiree to the total consolidated assets of the
smaller reporting company as of the end of the most recently completed
fiscal year.
(2) Compare the smaller reporting company's proportionate share of
the total assets (after intercompany eliminations) of the acquiree to
the total consolidated assets of the smaller reporting company as of
the end of the most recently completed fiscal year.
(3) Compare the smaller reporting company's equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the acquiree
to such consolidated income of the smaller reporting company for the
most recently completed fiscal year.
Computational note to Sec. 210.8-04(b): For purposes of making
the prescribed income test the following guidance should be applied:
If income of the smaller reporting company and its subsidiaries
consolidated for the most recent fiscal year is at least 10 percent
lower than the average of the income for the last five fiscal years,
such average income should be substituted for purposes of the
computation. Any loss years should be omitted for purposes of
computing average income.
(c)(1) If none of the conditions specified in paragraph (b) of this
section exceeds 20%, financial statements are not required. If any of
the conditions exceed 20%, but none exceeds 40%, financial statements
shall be furnished for the most recent fiscal year and any interim
periods specified in Sec. 210.8-03. If any of the conditions exceed
40%, financial statements shall be furnished for the two most recent
fiscal years and any interim periods specified in Sec. 210.8-03.
(2) The separate audited balance sheet of the acquired business is
not required when the smaller reporting company's most recent audited
balance sheet filed is for a date after the acquisition was
consummated.
(3) If the aggregate impact of individually insignificant
businesses acquired since the date of the most recent audited balance
sheet filed for the registrant exceeds 50%, financial statements
covering at least the substantial majority of the businesses acquired
shall be furnished. Such financial statements shall be for the most
recent fiscal year and any interim periods specified in Sec. 210.8-03.
(4) Registration statements not subject to the provisions of Sec.
230.419 of this chapter (Regulation C) and proxy statements need not
include separate financial statements of the acquired or to be acquired
business if it does not meet or exceed any of the conditions specified
in paragraph (b) of this section at the 50 percent level, and either:
(i) The consummation of the acquisition has not yet occurred; or
(ii) The effective date of the registration statement, or mailing
date in the case of a proxy statement, is no more than 74 days after
consummation of the business combination, and the financial statements
have not been filed previously by the registrant.
(5) An issuer that omits from its initial registration statement
financial statements of a recently consummated business combination
pursuant to paragraph (c)(4) of this section shall furnish those
financial statements and any pro forma information specified by Sec.
210.8-05 under cover of Form 8-K (Sec. 249.308 of this chapter) no
later than
[[Page 955]]
75 days after consummation of the acquisition.
(d) If the smaller reporting company made a significant business
acquisition after the latest fiscal year end and filed a report on Form
8-K, which included audited financial statements of such acquired
business for the periods required by paragraph (c) of this section and
the pro forma financial information required by Sec. 210.8-05, the
determination of significance may be made by using pro forma amounts
for the latest fiscal year in the report on Form 8-K rather than by
using the historical amounts of the registrant. The tests may not be
made by ``annualizing'' data.
(e) If the business acquired or to be acquired is a foreign
business, financial statements of the business meeting the requirements
of Item 17 of Form 20-F (Sec. 249.220f of this chapter) will satisfy
this section.
Sec. 210.8-05 Pro forma financial information.
(a) Pro forma information showing the effects of the acquisition
shall be furnished if financial statements of a business acquired or to
be acquired are presented.
(b) Pro forma statements should be condensed, in columnar form
showing pro forma adjustments and results, and should include the
following:
(1) If the transaction was consummated during the most recent
fiscal year or subsequent interim period, pro forma statements of
income reflecting the combined operations of the entities for the
latest fiscal year and interim period, if any; or
(2) If consummation of the transaction has occurred or is probable
after the date of the most recent balance sheet required by Sec.
210.8-02 or Sec. 210.8-03, a pro forma balance sheet giving effect to
the combination as of the date of the most recent balance sheet. For a
purchase, pro forma statements of income reflecting the combined
operations of the entities for the latest fiscal year and interim
period, if any, are required.
Sec. 210.8-06 Real estate operations acquired or to be acquired.
If, during the period for which income statements are required, the
smaller reporting company has acquired one or more properties that in
the aggregate are significant, or since the date of the latest balance
sheet required by Sec. 210.8-02 or Sec. 210.8-03, has acquired or
proposes to acquire one or more properties that in the aggregate are
significant, the following shall be furnished with respect to such
properties:
(a) Audited income statements (not including earnings per unit) for
the two most recent years, which shall exclude items not comparable to
the proposed future operations of the property such as mortgage
interest, leasehold rental, depreciation, corporate expenses and
federal and state income taxes; Provided, however, that such audited
statements need be presented for only the most recent fiscal year if:
(1) The property is not acquired from a related party;
(2) Material factors considered by the smaller reporting company in
assessing the property are described with specificity in the
registration statement with regard to the property, including source of
revenue (including, but not limited to, competition in the rental
market, comparative rents, occupancy rates) and expenses (including but
not limited to, utilities, ad valorem tax rates, maintenance expenses,
and capital improvements anticipated); and
(3) The smaller reporting company indicates that, after reasonable
inquiry, it is not aware of any material factors relating to the
specific property other than those discussed in response to paragraph
(a)(2) of this section that would cause the reported financial
information not to be necessarily indicative of future operating
results.
(b) If the property will be operated by the smaller reporting
company, a statement shall be furnished showing the estimated taxable
operating results of the smaller reporting company based on the most
recent twelve-month period, including such adjustments as can be
factually supported. If the property will be acquired subject to a net
lease, the estimated taxable operating results shall be based on the
rent to be paid for the first year of the lease. In either case, the
estimated amount of cash to be made available by operations shall be
shown. Disclosure must be provided of the principal assumptions that
have been made in preparing the statements of estimated taxable
operating results and cash to be made available by operations.
(c) If appropriate under the circumstances, a table should be
provided that shows, for a limited number of years, the estimated cash
distribution per unit, indicating the portion reportable as taxable
income and the portion representing a return of capital with an
explanation of annual variations, if any. If taxable net income per
unit will be greater than the cash available for distribution per unit,
that fact and the approximate year of occurrence shall be stated, if
significant.
Sec. 210.8-07 Limited partnerships.
(a) Smaller reporting companies that are limited partnerships must
provide the balance sheets of the general partners as described in
paragraphs (b) through (d) of this section.
(b) Where a general partner is a corporation, the audited balance
sheet of the corporation as of the end of its most recently completed
fiscal year must be filed. Receivables, other than trade receivables,
from affiliates of the general partner should be deducted from
shareholders' equity of the general partner. Where an affiliate has
committed itself to increase or maintain the general partner's capital,
the audited balance sheet of such affiliate must also be presented.
(c) Where a general partner is a partnership, there shall be filed
an audited balance sheet of such partnership as of the end of its most
recently completed fiscal year.
(d) Where the general partner is a natural person, there shall be
filed, as supplemental information, a balance sheet of such natural
person as of a recent date. Such balance sheet need not be audited. The
assets and liabilities should be carried at estimated fair market
value, with provisions for estimated income taxes on unrealized gains.
The net worth of such general partner(s), based on such balance
sheet(s), singly or in the aggregate, shall be disclosed in the
registration statement.
Sec. 210.8-08 Age of financial statements.
At the date of filing, financial statements included in filings
other than filings on Form 10-K must be not less current than the
financial statements that would be required in Forms 10-K and 10-Q if
such reports were required to be filed. If required financial
statements are as of a date 135 days or more before the date a
registration statement becomes effective or proxy material is expected
to be mailed, the financial statements shall be updated to include
financial statements for an interim period ending within 135 days of
the effective or expected mailing date. Interim financial statements
must be prepared and presented in accordance with paragraph (b) of this
section.
(a) When the anticipated effective or mailing date falls within 45
days after the end of the fiscal year, the filing may include financial
statements only as current as of the end of the third fiscal quarter;
Provided, however, that if the audited financial statements for the
recently completed fiscal year are available or become available before
effectiveness or mailing, they must be included in the filing; and
[[Page 956]]
(b) If the effective date or anticipated mailing date falls after
45 days but within 90 days of the end of the smaller reporting
company's fiscal year, the smaller reporting company is not required to
provide the audited financial statements for such year end provided
that the following conditions are met:
(1) If the smaller reporting company is a reporting company, all
reports due must have been filed;
(2) For the most recent fiscal year for which audited financial
statements are not yet available, the smaller reporting company
reasonably and in good faith expects to report income from continuing
operations before taxes; and
(3) For at least one of the two fiscal years immediately preceding
the most recent fiscal year the smaller reporting company reported
income from continuing operations before taxes.
0
9. Amend Sec. 210.10-01 by revising paragraphs (b)(6) and the
introductory text of paragraph (c) to read as follows:
Sec. 210.10-01 Interim financial statements.
* * * * *
(b) * * *
(6) In addition to meeting the reporting requirements specified by
existing standards for accounting changes, the registrant shall state
the date of any material accounting change and the reasons for making
it. In addition, for filings on Form 10-Q, a letter from the
registrant's independent accountant shall be filed as an exhibit (in
accordance with the provisions of Item 601 of Regulation S-K, 17 CFR
229.601) in the first Form 10-Q after the date of an accounting change
indicating whether or not the change is to an alternative principle
which, in the accountant's judgment, is preferable under the
circumstances; except that no letter from the accountant need be filed
when the change is made in response to a standard adopted by the
Financial Accounting Standards Board that requires such change.
* * * * *
(c) Periods to be covered. The periods for which interim financial
statements are to be provided in registration statements are prescribed
elsewhere in this Regulation (see Sec. Sec. 210.3-01 and 3-02). For
filings on Form 10-Q, financial statements shall be provided as set
forth in this paragraph (c):
* * * * *
PART 228 [REMOVED]
0
10. Part 228 is removed and reserved.
PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K
0
11. The authority citation for part 229 continues to read in part as
follows:
Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 777iii,
77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w,
78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37,
80a-38(a), 80a-39, 80b-11, and 7201 et seq.; 18 U.S.C. 1350, unless
otherwise noted.
* * * * *
0
12. Amend Sec. 229.10 by adding paragraph (f) to read as follows:
Sec. 229.10 (Item 10) General.
* * * * *
(f) Smaller reporting companies. The requirements of this part
apply to smaller reporting companies. A smaller reporting company may
comply with either the requirements applicable to smaller reporting
companies or the requirements applicable to other companies for each
item, unless the requirements for smaller reporting companies specify
that smaller reporting companies must comply with the smaller reporting
company requirements. The following items of this part set forth
requirements for smaller reporting companies that are different from
requirements applicable to other companies:
Index of Scaled Disclosure Available to Smaller Reporting Companies
------------------------------------------------------------------------
------------------------------------------------------------------------
Item 101............................... Description of business.
Item 201............................... Market price of and dividends
on registrant's common equity
and related stockholder
matters.
Item 301............................... Selected financial data.
Item 302............................... Supplementary financial
information.
Item 303............................... Management's discussion and
analysis of financial
condition and results of
operations.
Item 305............................... Quantitative and qualitative
disclosures about market risk.
Item 402............................... Executive compensation.
Item 404............................... Transactions with related
persons, promoters and certain
control persons.
Item 407............................... Corporate governance.
Item 503............................... Prospectus summary, risk
factors, and ratio of earnings
to fixed charges.
Item 504............................... Use of proceeds.
Item 601............................... Exhibits.
------------------------------------------------------------------------
(1) Definition of smaller reporting company. As used in this part,
the term smaller reporting company means an issuer that is not an
investment company, an asset-backed issuer (as defined in Sec.
229.1101), or a majority-owned subsidiary of a parent that is not a
smaller reporting company and that:
(i) Had a public float of less than $75 million as of the last
business day of its most recently completed second fiscal quarter,
computed by multiplying the aggregate worldwide number of shares of its
voting and non-voting common equity held by non-affiliates by the price
at which the common equity was last sold, or the average of the bid and
asked prices of common equity, in the principal market for the common
equity; or
(ii) In the case of an initial registration statement under the
Securities Act or Exchange Act for shares of its common equity, had a
public float of less than $75 million as of a date within 30 days of
the date of the filing of the registration statement, computed by
multiplying the aggregate worldwide number of such shares held by non-
affiliates before the registration plus, in the case of a Securities
Act registration statement, the number of such shares included in the
registration statement by the estimated public offering price of the
shares; or
(iii) In the case of an issuer whose public float as calculated
under paragraph (i) or (ii) of this definition was zero, had annual
revenues of less than $50 million during the most recently completed
fiscal year for which audited financial statements are available.
(2) Determination: Whether or not an issuer is a smaller reporting
company is determined on an annual basis.
(i) For issuers that are required to file reports under section
13(a) or 15(d) of the Exchange Act, the determination is based on
whether the issuer came within the definition of smaller reporting
company, using the amounts specified in paragraph (f)(2)(iii) of this
Item, as of the last business day of the second fiscal quarter of the
issuer's previous fiscal year. An issuer in this category must reflect
this determination in the information it provides in its quarterly
report on Form 10-Q for the first fiscal quarter of the next year,
indicating on the cover page of that filing, and in subsequent filings
for that fiscal year, whether or not it is a smaller reporting company,
except that, if a determination based on public float indicates that
the issuer is newly eligible to be a smaller reporting company, the
issuer may choose to reflect this determination beginning
[[Page 957]]
with its first quarterly report on Form 10-Q following the
determination, rather than waiting until the first fiscal quarter of
the next year.
(ii) For determinations based on an initial Securities Act or
Exchange Act registration statement under paragraph (f)(1)(ii) of this
Item, the issuer must reflect the determination in the information it
provides in the registration statement and must appropriately indicate
on the cover page of the filing, and subsequent filings for the fiscal
year in which the filing is made, whether or not it is a smaller
reporting company. The issuer must redetermine its status at the end of
its second fiscal quarter and then reflect any change in status as
provided in paragraph (f)(2)(i) of this Item. In the case of a
determination based on an initial Securities Act registration
statement, an issuer that was not determined to be a smaller reporting
company has the option to redetermine its status at the conclusion of
the offering covered by the registration statement based on the actual
offering price and number of shares sold.
(iii) Once an issuer fails to qualify for smaller reporting company
status, it will remain unqualified unless it determines that its public
float, as calculated in accordance with paragraph (f)(1) of this Item,
was less than $50 million as of the last business day of its second
fiscal quarter or, if that calculation results in zero because the
issuer had no public equity outstanding or no market price for its
equity existed, if the issuers had annual revenues of less than $40
million during its previous fiscal year.
0
13. Amend Sec. 229.101 by:
0
a. Revising (a)(2) introductory text, (a)(2)(i), (a)(2)(ii), and
(a)(2)(iii) introductory text; and
0
b. Adding paragraph (h) before the Instructions to Item 101.
The revision and addition read as follows:
Sec. 229.101 (Item 101) Description of business.
* * * * *
(a)(1) * * *
(2) Registrants:
(i) Filing a registration statement on Form S-1 (Sec. 239.11 of
this chapter) under the Securities Act or on Form 10 (Sec. 249.210 of
this chapter) under the Exchange Act;
(ii) Not subject to the reporting requirements of section 13(a) or
15(d) of the Exchange Act immediately before the filing of such
registration statement; and
(iii) That (including predecessors) have not received revenue from
operations during each of the three fiscal years immediately before the
filing of such registration statement, shall provide the following
information:
* * * * *
(h) Smaller reporting companies. A smaller reporting company, as
defined by Sec. 229.10(f)(1), may satisfy its obligations under this
Item by describing the development of its business during the last
three years. If the smaller reporting company has not been in business
for three years, give the same information for predecessor(s) of the
smaller reporting company if there are any. This business development
description should include:
(1) Form and year of organization;
(2) Any bankruptcy, receivership or similar proceeding; and
(3) Any material reclassification, merger, consolidation, or
purchase or sale of a significant amount of assets not in the ordinary
course of business.
(4) Business of the smaller reporting company. Briefly describe the
business and include, to the extent material to an understanding of the
smaller reporting company:
(i) Principal products or services and their markets;
(ii) Distribution methods of the products or services;
(iii) Status of any publicly announced new product or service;
(iv) Competitive business conditions and the smaller reporting
company's competitive position in the industry and methods of
competition;
(v) Sources and availability of raw materials and the names of
principal suppliers;
(vi) Dependence on one or a few major customers;
(vii) Patents, trademarks, licenses, franchises, concessions,
royalty agreements or labor contracts, including duration;
(viii) Need for any government approval of principal products or
services. If government approval is necessary and the smaller reporting
company has not yet received that approval, discuss the status of the
approval within the government approval process;
(ix) Effect of existing or probable governmental regulations on the
business;
(x) Estimate of the amount spent during each of the last two fiscal
years on research and development activities, and if applicable, the
extent to which the cost of such activities is borne directly by
customers;
(xi) Costs and effects of compliance with environmental laws
(federal, state and local); and
(xii) Number of total employees and number of full-time employees.
(5) Reports to security holders. Disclose the following in any
registration statement you file under the Securities Act of 1933:
(i) If you are not required to deliver an annual report to security
holders, whether you will voluntarily send an annual report and whether
the report will include audited financial statements;
(ii) Whether you file reports with the Securities and Exchange
Commission. If you are a reporting company, identify the reports and
other information you file with the Commission; and
(iii) That the public may read and copy any materials you file with
the Commission at the SEC's Public Reference Room at 100 F Street, NE.,
Washington, DC 20549, on official business days during the hours of 10
a.m. to 3 p.m. State that the public may obtain information on the
operation of the Public Reference Room by calling the Commission at 1-
800-SEC-0330. State that the Commission maintains an Internet site that
contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the
Commission and state the address of that site (http://www.sec.gov). You
are encouraged to give your Internet address, if available.
(6) Foreign issuers. Provide the information required by Item
101(g) of Regulation S-K (Sec. 229.101(g)).
* * * * *
0
14. Amend Sec. 229.102 by adding Instructions 7, 8, and 9 to read as
follows:
Sec. 229.102 (Item 102) Description of property.
* * * * *
Instructions to Item 102:
* * * * *
7. The attention of issuers engaged in significant mining
operations is directed to the information called for in Guide 7
(Sec. 229.801(g) and Sec. 229.802(g)).
8. The attention of issuers engaged in oil and gas producing
activities is directed to the information called for in Guides 2 and
4 (Sec. 229.801(b), Sec. 229.802(b) and Sec. 299.801(d), Sec.
229.802(d)).
9. The attention of issuers engaged in real estate activities is
directed to the information called for in Guide 5 (Sec. 229.801(e)
of this chapter).
0
15. Amend Sec. 229.201 by:
0
a. Revising paragraph (a)(1)(ii); and
0
b. Revising paragraph (a)(2); and
0
c. Revising Instruction 6 to Item 201(e).
The revision and addition read as follows:
Sec. 229.201 (Item 201) Market price of and dividends on the
registrant's common equity and related stockholder matters.
(a) * * *
[[Page 958]]
(1) * * *
(ii) If the principal United States market for such common equity
is an exchange, state the high and low sales prices for the equity for
each full quarterly period within the two most recent fiscal years and
any subsequent interim period for which financial statements are
included, or are required to be included by Article 3-01 through 3-04
of Regulation S-X ( Sec. 210.3-01 through 3-04 of this chapter), or
Article 8-02 through 8-03 of Regulation S-X (Sec. 210.8-02 through 8-
03 of this chapter) in the case of smaller reporting companies, as
reported in the consolidated transaction reporting system or, if not so
reported, as reported on the principal exchange market for such equity.
* * * * *
(2) If the information called for by this paragraph (a) is being
presented in a registration statement on Form S-1 (Sec. 239.11 of this
chapter) under the Securities Act or on Form 10 (Sec. 249.210 of this
chapter) under the Exchange Act relating to a class of common equity
for which at the time of filing there is no established United States
public trading market, indicate the amount(s) of common equity:
(i) That is subject to outstanding options or warrants to purchase,
or securities convertible into, common equity of the registrant;
(ii) That could be sold pursuant to Sec. 230.144 of this chapter
or that the registrant has agreed to register under the Securities Act
for sale by security holders; or
(iii) That is being, or has been publicly proposed to be, publicly
offered by the registrant (unless such common equity is being offered
pursuant to an employee benefit plan or dividend reinvestment plan),
the offering of which could have a material effect on the market price
of the registrant's common equity.
* * * * *
Instructions to Item 201(e):
* * * * *
(6) Smaller reporting companies. A registrant that qualifies as
a smaller reporting company, as defined by Sec. 229.10(f)(1), is
not required to provide the information required by paragraph (e) of
this Item.
* * * * *
0
16. Amend Sec. 229.301 by removing the authority citation following
the section and adding paragraph (c) before the Instruction to Item 301
to read as follows:
Sec. 229.301 (Item 301) Selected financial data.
* * * * *
(c) Smaller reporting companies. A registrant that qualifies as a
smaller reporting company, as defined by Sec. 229.10(f)(1), is not
required to provide the information required by this Item.
* * * * *
0
17. Amend Sec. 229.302 by adding paragraph (c) to read as follows:
Sec. 229.302 (Item 302) Supplementary financial information.
* * * * *
(c) Smaller reporting companies. A registrant that qualifies as a
smaller reporting company, as defined by Sec. 229.10(f)(1), is not
required to provide the information required by this Item.
0
18. Amend Sec. 229.303 by:
0
a. Revising a sentence to Instruction 1 to paragraph 303(a);
0
b. Adding Instructions 13 and 14;
0
c. Revising a sentence to Instruction 1 to paragraph 303(b); and
0
d. Adding paragraph (d) to read as follows:
Sec. 229.303 (Item 303) Management's discussion and analysis of
financial condition and results of operations.
* * * * *
Instructions to paragraph 303(a): 1. The registrant's discussion
and analysis shall be of the financial statements and other
statistical data that the registrant believes will enhance a
reader's understanding of its financial condition, changes in
financial condition and results of operations. Generally, the
discussion shall cover the three-year period covered by the
financial statements and shall use year-to-year comparisons or any
other formats that in the registrant's judgment enhance a reader's
understanding. However, where trend information is relevant,
reference to the five-year selected financial data appearing
pursuant to Item 301 of Regulation S-K (Sec. 229.301) may be
necessary. A smaller reporting company's discussion shall cover the
two-year period required in Article 8 of Regulation S-X and shall
use year-to-year comparisons or any other formats that in the
registrant's judgment enhance a reader's understanding.
* * * * *
13. The attention of bank holding companies is directed to the
information called for in Guide 3 (Sec. 229.801(c) and Sec.
229.802(c)).
14. The attention of property-casualty insurance companies is
directed to the information called for in Guide 6 (Sec.
229.801(f)).
* * * * *
Instructions to paragraph 303(b): 1. If interim financial
statements are presented together with financial statements for full
fiscal years, the discussion of the interim financial information
shall be prepared pursuant to this paragraph (b) and the discussion
of the full fiscal year's information shall be prepared pursuant to
paragraph (a) of this Item. Such discussions may be combined.
* * * * *
(d) Smaller reporting companies. A smaller reporting company, as
defined by Sec. 229.10(f)(1), may provide the information required in
paragraph (a)(3)(iv) of this Item for the last two most recent fiscal
years of the registrant if it provides financial information on net
sales and revenues and on income from continuing operations for only
two years. A smaller reporting company is not required to provide the
information required by paragraph (a)(5) of this Item.
0
19. Amend Sec. 229.305 by revising paragraph (e) to read as follows:
Sec. 229.305 (Item 305) Quantitative and qualitative disclosures
about market risk.
* * * * *
(e) Smaller reporting companies. A smaller reporting company, as
defined by Sec. 229.10(f)(1), is not required to provide the
information required by this Item.
* * * * *
0
20. Amend Sec. 229.401 by revising Instruction 3 to paragraph (b) to
read as follows:
Sec. 229.401 (Item 401) Directors, executive officers, promoters and
control persons.
* * * * *
(b) * * *
Instructions to Paragraph (b) of Item 401:
* * * * *
3. The information regarding executive officers called for by
this Item need not be furnished in proxy or information statements
prepared in accordance with Schedule 14A under the Exchange Act
(Sec. 240.14a-101 of this chapter) by registrants relying on
General Instruction G of Form 10-K under the Exchange Act (Sec.
249.310 of this chapter); Provided, that such information is
furnished in a separate item captioned ``Executive officers of the
registrant'' and included in Part I of the registrant's annual
report on Form 10-K.
* * * * *
0
21. Amend Sec. 229.402 by adding paragraphs (l), (m), (n), (o), (p),
(q), and (r) before the Instruction to Item 402 to read as follows:
Sec. 229.402 (Item 402) Executive compensation.
* * * * *
(l) Smaller reporting companies. A registrant that qualifies as a
``smaller reporting company,'' as defined by Item 10(f) (Sec.
229.10(f)(1)), may provide the scaled disclosure in paragraphs (m)
through (r) instead of paragraphs (a) through (k) of this Item.
(m) Smaller reporting companies--General--(1) All compensation
covered. This Item requires clear, concise and understandable
disclosure of all plan
[[Page 959]]
and non-plan compensation awarded to, earned by, or paid to the named
executive officers designated under paragraph (m)(2) of this Item, and
directors covered by paragraph (r) of this Item, by any person for all
services rendered in all capacities to the smaller reporting company
and its subsidiaries, unless otherwise specifically excluded from
disclosure in this Item. All such compensation shall be reported
pursuant to this Item, even if also called for by another requirement,
including transactions between the smaller reporting company and a
third party where a purpose of the transaction is to furnish
compensation to any such named executive officer or director. No amount
reported as compensation for one fiscal year need be reported in the
same manner as compensation for a subsequent fiscal year; amounts
reported as compensation for one fiscal year may be required to be
reported in a different manner pursuant to this Item.
(2) Persons covered. Disclosure shall be provided pursuant to this
Item for each of the following (the ``named executive officers''):
(i) All individuals serving as the smaller reporting company's
principal executive officer or acting in a similar capacity during the
last completed fiscal year (``PEO''), regardless of compensation level;
(ii) The smaller reporting company's two most highly compensated
executive officers other than the PEO who were serving as executive
officers at the end of the last completed fiscal year; and
(iii) Up to two additional individuals for whom disclosure would
have been provided pursuant to paragraph (m)(2)(ii) of this Item but
for the fact that the individual was not serving as an executive
officer of the smaller reporting company at the end of the last
completed fiscal year.
Instructions to Item 402(m)(2).
1. Determination of most highly compensated executive officers.
The determination as to which executive officers are most highly
compensated shall be made by reference to total compensation for the
last completed fiscal year (as required to be disclosed pursuant to
paragraph (n)(2)(x) of this Item) reduced by the amount required to
be disclosed pursuant to paragraph (n)(2)(viii) of this Item,
provided, however, that no disclosure need be provided for any
executive officer, other than the PEO, whose total compensation, as
so reduced, does not exceed $100,000.
2. Inclusion of executive officer of a subsidiary. It may be
appropriate for a smaller reporting company to include as named
executive officers one or more executive officers or other employees
of subsidiaries in the disclosure required by this Item. See Rule
3b-7 under the Exchange Act (17 CFR 240.3b-7).
3. Exclusion of executive officer due to overseas compensation.
It may be appropriate in limited circumstances for a smaller
reporting company not to include in the disclosure required by this
Item an individual, other than its PEO, who is one of the smaller
reporting company's most highly compensated executive officers due
to the payment of amounts of cash compensation relating to overseas
assignments attributed predominantly to such assignments.
(3) Information for full fiscal year. If the PEO served in that
capacity during any part of a fiscal year with respect to which
information is required, information should be provided as to all of
his or her compensation for the full fiscal year. If a named executive
officer (other than the PEO) served as an executive officer of the
smaller reporting company (whether or not in the same position) during
any part of the fiscal year with respect to which information is
required, information shall be provided as to all compensation of that
individual for the full fiscal year.
(4) Omission of table or column. A table or column may be omitted
if there has been no compensation awarded to, earned by, or paid to any
of the named executive officers or directors required to be reported in
that table or column in any fiscal year covered by that table.
(5) Definitions. For purposes of this Item:
(i) The term stock means instruments such as common stock,
restricted stock, restricted stock units, phantom stock, phantom stock
units, common stock equivalent units or any similar instruments that do
not have option-like features, and the term option means instruments
such as stock options, stock appreciation rights and similar
instruments with option-like features. The term stock appreciation
rights (``SARs'') refers to SARs payable in cash or stock, including
SARs payable in cash or stock at the election of the smaller reporting
company or a named executive officer. The term equity is used to refer
generally to stock and/or options.
(ii) The term plan includes, but is not limited to, the following:
Any plan, contract, authorization or arrangement, whether or not set
forth in any formal document, pursuant to which cash, securities,
similar instruments, or any other property may be received. A plan may
be applicable to one person. Smaller reporting companies may omit
information regarding group life, health, hospitalization, or medical
reimbursement plans that do not discriminate in scope, terms or
operation, in favor of executive officers or directors of the smaller
reporting company and that are available generally to all salaried
employees.
(iii) The term incentive plan means any plan providing compensation
intended to serve as incentive for performance to occur over a
specified period, whether such performance is measured by reference to
financial performance of the smaller reporting company or an affiliate,
the smaller reporting company's stock price, or any other performance
measure. An equity incentive plan is an incentive plan or portion of an
incentive plan under which awards are granted that fall within the
scope of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (revised 2004), Share-Based Payment, as
modified or supplemented (``FAS 123R''). A non-equity incentive plan is
an incentive plan or portion of an incentive plan that is not an equity
incentive plan. The term incentive plan award means an award provided
under an incentive plan.
(iv) The terms date of grant or grant date refer to the grant date
determined for financial statement reporting purposes pursuant to FAS
123R.
(v) Closing market price is defined as the price at which the
smaller reporting company's security was last sold in the principal
United States market for such security as of the date for which the
closing market price is determined.
(n) Smaller reporting companies--Summary compensation table--(1)
General. Provide the information specified in paragraph (n)(2) of this
Item, concerning the compensation of the named executive officers for
each of the smaller reporting company's last two completed fiscal
years, in a Summary Compensation Table in the tabular format specified
below.
[[Page 960]]
Summary Compensation Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nonequity Nonqualified
Salary Bonus Stock Option incentive plan deferred All other Total
Name and principal position Year ($) ($) awards awards compensation compensation compensation ($)
($) ($) ($) earnings ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PEO
A
B
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) The Table shall include:
(i) The name and principal position of the named executive officer
(column (a));
(ii) The fiscal year covered (column (b));
(iii) The dollar value of base salary (cash and non-cash) earned by
the named executive officer during the fiscal year covered (column
(c));
(iv) The dollar value of bonus (cash and non-cash) earned by the
named executive officer during the fiscal year covered (column (d));
Instructions to Item 402(n)(2)(iii) and (iv).
1. If the amount of salary or bonus earned in a given fiscal
year is not calculable through the latest practicable date, a
footnote shall be included disclosing that the amount of salary or
bonus is not calculable through the latest practicable date and
providing the date that the amount of salary or bonus is expected to
be determined, and such amount must then be disclosed in a filing
under Item 5.02(f) of Form 8-K (17 CFR 249.308).
2. Smaller reporting companies shall include in the salary
column (column (c)) or bonus column (column (d)) any amount of
salary or bonus forgone at the election of a named executive officer
under which stock, equity-based or other forms of non-cash
compensation instead have been received by the named executive
officer. However, the receipt of any such form of non-cash
compensation instead of salary or bonus must be disclosed in a
footnote added to the salary or bonus column and, where applicable,
referring to the narrative disclosure to the Summary Compensation
Table (required by paragraph (o) of this Item) where the material
terms of the stock, option or non-equity incentive plan award
elected by the named executive officer are reported.
(v) For awards of stock, the dollar amount recognized for financial
statement reporting purposes with respect to the fiscal year in
accordance with FAS 123R (column (e));
(vi) For awards of options, with or without tandem SARs, the dollar
amount recognized for financial statement reporting purposes with
respect to the fiscal year in accordance with FAS 123R (column (f));
Instruction to Item 402(n)(2)(v) and (vi). For awards reported
in columns (e) and (f), disregard the estimate of forfeitures
related to service-based vesting conditions. Include a footnote
describing all forfeitures during the year, and disclosing all
assumptions made in the valuation. Disclose assumptions made in the
valuation by reference to a discussion of those assumptions in the
registrant's financial statements, footnotes to the financial
statements, or discussion in the Management's Discussion and
Analysis. The sections so referenced are deemed part of the
disclosure provided pursuant to this Item.
(vii) The dollar value of all earnings for services performed
during the fiscal year pursuant to awards under non-equity incentive
plans as defined in paragraph (m)(5)(iii) of this Item, and all
earnings on any outstanding awards (column (g));
Instructions to Item 402(n)(2)(vii).
1. If the relevant performance measure is satisfied during the
fiscal year (including for a single year in a plan with a multi-year
performance measure), the earnings are reportable for that fiscal
year, even if not payable until a later date, and are not reportable
again in the fiscal year when amounts are paid to the named
executive officer.
2. All earnings on non-equity incentive plan compensation must
be identified and quantified in a footnote to column (g), whether
the earnings were paid during the fiscal year, payable during the
period but deferred at the election of the named executive officer,
or payable by their terms at a later date.
(viii) Above-market or preferential earnings on compensation that
is deferred on a basis that is not tax-qualified, including such
earnings on nonqualified defined contribution plans (column (h));
Instruction to Item 402(n)(2)(viii). Interest on deferred
compensation is above-market only if the rate of interest exceeds
120% of the applicable federal long-term rate, with compounding (as
prescribed under section 1274(d) of the Internal Revenue Code, (26
U.S.C. 1274(d))) at the rate that corresponds most closely to the
rate under the smaller reporting company's plan at the time the
interest rate or formula is set. In the event of a discretionary
reset of the interest rate, the requisite calculation must be made
on the basis of the interest rate at the time of such reset, rather
than when originally established. Only the above-market portion of
the interest must be included. If the applicable interest rates vary
depending upon conditions such as a minimum period of continued
service, the reported amount should be calculated assuming
satisfaction of all conditions to receiving interest at the highest
rate. Dividends (and dividend equivalents) on deferred compensation
denominated in the smaller reporting company's stock (``deferred
stock'') are preferential only if earned at a rate higher than
dividends on the smaller reporting company's common stock. Only the
preferential portion of the dividends or equivalents must be
included. Footnote or narrative disclosure may be provided
explaining the smaller reporting company's criteria for determining
any portion considered to be above-market.
(ix) All other compensation for the covered fiscal year that the
smaller reporting company could not properly report in any other column
of the Summary Compensation Table (column (i)). Each compensation item
that is not properly reportable in columns (c) through (h), regardless
of the amount of the compensation item, must be included in column (i).
Such compensation must include, but is not limited to:
(A) Perquisites and other personal benefits, or property, unless
the aggregate amount of such compensation is less than $10,000;
(B) All ``gross-ups'' or other amounts reimbursed during the fiscal
year for the payment of taxes;
(C) For any security of the smaller reporting company or its
subsidiaries purchased from the smaller reporting company or its
subsidiaries (through deferral of salary or bonus, or otherwise) at a
discount from the market price of such security at the date of
purchase, unless that discount is available generally, either to all
security holders or to all salaried employees of the smaller reporting
company, the compensation cost, if any, computed in accordance with FAS
123R;
(D) The amount paid or accrued to any named executive officer
pursuant to a plan or arrangement in connection with:
(1) Any termination, including without limitation through
retirement,
[[Page 961]]
resignation, severance or constructive termination (including a change
in responsibilities) of such executive officer's employment with the
smaller reporting company and its subsidiaries; or
(2) A change in control of the smaller reporting company;
(E) Smaller reporting company contributions or other allocations to
vested and unvested defined contribution plans;
(F) The dollar value of any insurance premiums paid by, or on
behalf of, the smaller reporting company during the covered fiscal year
with respect to life insurance for the benefit of a named executive
officer; and
(G) The dollar value of any dividends or other earnings paid on
stock or option awards, when those amounts were not factored into the
grant date fair value for the stock or option award; and
Instructions to Item 402(n)(2)(ix).
1. Non-equity incentive plan awards and earnings and earnings on
stock or options, except as specified in paragraph (n)(2)(ix)(G) of
this Item, are required to be reported elsewhere as provided in this
Item and are not reportable as All Other Compensation in column (i).
2. Benefits paid pursuant to defined benefit and actuarial plans
are not reportable as All Other Compensation in column (i) unless
accelerated pursuant to a change in control; information concerning
these plans is reportable pursuant to paragraph (q)(1) of this Item.
3. Reimbursements of taxes owed with respect to perquisites or
other personal benefits must be included in the columns as tax
reimbursements (paragraph (n)(2)(ix)(B) of this Item) even if the
associated perquisites or other personal benefits are not required
to be included because the aggregate amount of such compensation is
less than $10,000.
4. Perquisites and other personal benefits shall be valued on
the basis of the aggregate incremental cost to the smaller reporting
company.
5. For purposes of paragraph (n)(2)(ix)(D) of this Item, an
accrued amount is an amount for which payment has become due.
(x) The dollar value of total compensation for the covered fiscal
year (column (j)). With respect to each named executive officer,
disclose the sum of all amounts reported in columns (c) through (i).
Instructions to Item 402(n).
1. Information with respect to the fiscal year prior to the last
completed fiscal year will not be required if the smaller reporting
company was not a reporting company pursuant to section 13(a) or
15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d)) at any time
during that year, except that the smaller reporting company will be
required to provide information for any such year if that
information previously was required to be provided in response to a
Commission filing requirement.
2. All compensation values reported in the Summary Compensation
Table must be reported in dollars and rounded to the nearest dollar.
Reported compensation values must be reported numerically, providing
a single numerical value for each grid in the table. Where
compensation was paid to or received by a named executive officer in
a different currency, a footnote must be provided to identify that
currency and describe the rate and methodology used to convert the
payment amounts to dollars.
3. If a named executive officer is also a director who receives
compensation for his or her services as a director, reflect that
compensation in the Summary Compensation Table and provide a
footnote identifying and itemizing such compensation and amounts.
Use the categories in the Director Compensation Table required
pursuant to paragraph (r) of this Item.
4. Any amounts deferred, whether pursuant to a plan established
under section 401(k) of the Internal Revenue Code (26 U.S.C.
401(k)), or otherwise, shall be included in the appropriate column
for the fiscal year in which earned.
(o) Smaller reporting companies--Narrative disclosure to summary
compensation table. Provide a narrative description of any material
factors necessary to an understanding of the information disclosed in
the Table required by paragraph (n) of this Item. Examples of such
factors may include, in given cases, among other things:
(1) The material terms of each named executive officer's employment
agreement or arrangement, whether written or unwritten;
(2) If at any time during the last fiscal year, any outstanding
option or other equity-based award was repriced or otherwise materially
modified (such as by extension of exercise periods, the change of
vesting or forfeiture conditions, the change or elimination of
applicable performance criteria, or the change of the bases upon which
returns are determined), a description of each such repricing or other
material modification;
(3) The waiver or modification of any specified performance target,
goal or condition to payout with respect to any amount included in non-
stock incentive plan compensation or payouts reported in column (g) to
the Summary Compensation Table required by paragraph (n) of this Item,
stating whether the waiver or modification applied to one or more
specified named executive officers or to all compensation subject to
the target, goal or condition;
(4) The material terms of each grant, including but not limited to
the date of exercisability, any conditions to exercisability, any
tandem feature, any reload feature, any tax-reimbursement feature, and
any provision that could cause the exercise price to be lowered;
(5) The material terms of any non-equity incentive plan award made
to a named executive officer during the last completed fiscal year,
including a general description of the formula or criteria to be
applied in determining the amounts payable and vesting schedule;
(6) The method of calculating earnings on nonqualified deferred
compensation plans including nonqualified defined contribution plans;
and
(7) An identification to the extent material of any item included
under All Other Compensation (column (i)) in the Summary Compensation
Table. Identification of an item shall not be considered material if it
does not exceed the greater of $25,000 or 10% of all items included in
the specified category in question set forth in paragraph (n)(2)(ix) of
this Item. All items of compensation are required to be included in the
Summary Compensation Table without regard to whether such items are
required to be identified.
Instruction to Item 402(o). The disclosure required by paragraph
(o)(2) of this Item would not apply to any repricing that occurs
through a pre-existing formula or mechanism in the plan or award
that results in the periodic adjustment of the option or SAR
exercise or base price, an antidilution provision in a plan or
award, or a recapitalization or similar transaction equally
affecting all holders of the class of securities underlying the
options or SARs.
(p) Smaller reporting companies--Outstanding equity awards at
fiscal year-end table. (1) Provide the information specified in
paragraph (p)(2) of this Item, concerning unexercised options; stock
that has not vested; and equity incentive plan awards for each named
executive officer outstanding as of the end of the smaller reporting
company's last completed fiscal year in the following tabular format:
[[Page 962]]
Outstanding Equity Awards at Fiscal Year-End
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option awards Stock awards
------------------------------------------------------------------------------------------------------------------
Equity
Equity incentive
Equity incentive plan
incentive plan awards:
Number of Number of plan Number of Market awards: Market or
securities securities awards: shares or value of Number of payout
Name underlying underlying Number of Option Option units of shares of unearned value of
unexercised unexercised securities exercise expiration stock that units of shares, unearned
options options underlying price ($) date have not stock that units or shares,
() () unexercised vested have not other units or
exercisable unexercisable unearned () vested rights that other
options ($) have not rights
() vested that have
() not vested
($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PEO
A
B
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) The Table shall include:
(i) The name of the named executive officer (column (a));
(ii) On an award-by-award basis, the number of securities
underlying unexercised options, including awards that have been
transferred other than for value, that are exercisable and that are not
reported in column (d) (column (b));
(iii) On an award-by-award basis, the number of securities
underlying unexercised options, including awards that have been
transferred other than for value, that are unexercisable and that are
not reported in column (d) (column (c));
(iv) On an award-by-award basis, the total number of shares
underlying unexercised options awarded under any equity incentive plan
that have not been earned (column (d));
(v) For each instrument reported in columns (b), (c) and (d), as
applicable, the exercise or base price (column (e));
(vi) For each instrument reported in columns (b), (c) and (d), as
applicable, the expiration date (column (f));
(vii) The total number of shares of stock that have not vested and
that are not reported in column (i) (column (g));
(viii) The aggregate market value of shares of stock that have not
vested and that are not reported in column (j) (column (h));
(ix) The total number of shares of stock, units or other rights
awarded under any equity incentive plan that have not vested and that
have not been earned, and, if applicable the number of shares
underlying any such unit or right (column (i)); and
(x) The aggregate market or payout value of shares of stock, units
or other rights awarded under any equity incentive plan that have not
vested and that have not been earned (column (j)).
Instructions to Item 402(p)(2).
1. Identify by footnote any award that has been transferred
other than for value, disclosing the nature of the transfer.
2. The vesting dates of options, shares of stock and equity
incentive plan awards held at fiscal-year end must be disclosed by
footnote to the applicable column where the outstanding award is
reported.
3. Compute the market value of stock reported in column (h) and
equity incentive plan awards of stock reported in column (j) by
multiplying the closing market price of the smaller reporting
company's stock at the end of the last completed fiscal year by the
number of shares or units of stock or the amount of equity incentive
plan awards, respectively. The number of shares or units reported in
column (d) or (i), and the payout value reported in column (j),
shall be based on achieving threshold performance goals, except that
if the previous fiscal year's performance has exceeded the
threshold, the disclosure shall be based on the next higher
performance measure (target or maximum) that exceeds the previous
fiscal year's performance. If the award provides only for a single
estimated payout, that amount should be reported. If the target
amount is not determinable, smaller reporting companies must provide
a representative amount based on the previous fiscal year's
performance.
4. Multiple awards may be aggregated where the expiration date
and the exercise and/or base price of the instruments is identical.
A single award consisting of a combination of options, SARs and/or
similar option-like instruments shall be reported as separate awards
with respect to each tranche with a different exercise and/or base
price or expiration date.
5. Options or stock awarded under an equity incentive plan are
reported in columns (d) or (i) and (j), respectively, until the
relevant performance condition has been satisfied. Once the relevant
performance condition has been satisfied, even if the option or
stock award is subject to forfeiture conditions, options are
reported in column (b) or (c), as appropriate, until they are
exercised or expire, or stock is reported in columns (g) and (h)
until it vests.
(q) Smaller reporting companies--Additional narrative disclosure.
Provide a narrative description of the following to the extent
material:
(1) The material terms of each plan that provides for the payment
of retirement benefits, or benefits that will be paid primarily
following retirement, including but not limited to tax-qualified
defined benefit plans, supplemental executive retirement plans, tax-
qualified defined contribution plans and nonqualified defined
contribution plans.
(2) The material terms of each contract, agreement, plan or
arrangement, whether written or unwritten, that provides for payment(s)
to a named executive officer at, following, or in connection with the
resignation, retirement or other termination of a named executive
officer, or a change in control of the smaller reporting company or a
change in the named executive officer's responsibilities following a
change in control, with respect to each named executive officer.
(r) Smaller reporting companies--Compensation of directors. (1)
Provide the information specified in paragraph (r)(2) of this Item,
concerning the compensation of the directors for the smaller reporting
company's last completed fiscal year, in the following tabular format:
[[Page 963]]
Director Compensation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-equity Nonqualified
Fees earned Stock Option incentive plan deferred All other Total
Name or paid in awards ($) awards ($) compensation compensation compensation ($)
cash ($) ($) earnings ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A
B
C
D
E
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) The Table shall include:
(i) The name of each director unless such director is also a named
executive officer under paragraph (m) of this Item and his or her
compensation for service as a director is fully reflected in the
Summary Compensation Table pursuant to paragraph (n) of this Item and
otherwise as required pursuant to paragraphs (o) through (q) of this
Item (column (a));
(ii) The aggregate dollar amount of all fees earned or paid in cash
for services as a director, including annual retainer fees, committee
and/or chairmanship fees, and meeting fees (column (b));
(iii) For awards of stock, the dollar amount recognized for
financial statement reporting purposes with respect to the fiscal year
in accordance with FAS 123R (column (c));
(iv) For awards of stock options, with or without tandem SARs, the
dollar amount recognized for financial statement reporting purposes
with respect to the fiscal year in accordance with FAS 123R (column
(d));
Instruction to Item 402(r)(2)(iii) and (iv). For each director,
disclose by footnote to the appropriate column, the aggregate number
of stock awards and the aggregate number of option awards
outstanding at fiscal year end.
(v) The dollar value of all earnings for services performed during
the fiscal year pursuant to non-equity incentive plans as defined in
paragraph (m)(5)(iii) of this Item, and all earnings on any outstanding
awards (column (e));
(vi) Above-market or preferential earnings on compensation that is
deferred on a basis that is not tax-qualified, including such earnings
on nonqualified defined contribution plans (column (f));
(vii) All other compensation for the covered fiscal year that the
smaller reporting company could not properly report in any other column
of the Director Compensation Table (column (g)). Each compensation item
that is not properly reportable in columns (b) through (f), regardless
of the amount of the compensation item, must be included in column (g)
and must be identified and quantified in a footnote if it is deemed
material in accordance with paragraph (o)(7) of this Item. Such
compensation must include, but is not limited to:
(A) Perquisites and other personal benefits, or property, unless
the aggregate amount of such compensation is less than $10,000;
(B) All ``gross-ups'' or other amounts reimbursed during the fiscal
year for the payment of taxes;
(C) For any security of the smaller reporting company or its
subsidiaries purchased from the smaller reporting company or its
subsidiaries (through deferral of salary or bonus, or otherwise) at a
discount from the market price of such security at the date of
purchase, unless that discount is available generally, either to all
security holders or to all salaried employees of the smaller reporting
company, the compensation cost, if any, computed in accordance with FAS
123R;
(D) The amount paid or accrued to any director pursuant to a plan
or arrangement in connection with:
(1) The resignation, retirement or any other termination of such
director; or
(2) A change in control of the smaller reporting company;
(E) Smaller reporting company contributions or other allocations to
vested and unvested defined contribution plans;
(F) Consulting fees earned from, or paid or payable by the smaller
reporting company and/or its subsidiaries (including joint ventures);
(G) The annual costs of payments and promises of payments pursuant
to director legacy programs and similar charitable award programs;
(H) The dollar value of any insurance premiums paid by, or on
behalf of, the smaller reporting company during the covered fiscal year
with respect to life insurance for the benefit of a director; and
(I) The dollar value of any dividends or other earnings paid on
stock or option awards, when those amounts were not factored into the
grant date fair value for the stock or option award; and
Instruction to Item 402(r)(2)(vii). Programs in which smaller
reporting companies agree to make donations to one or more
charitable institutions in a director's name, payable by the smaller
reporting company currently or upon a designated event, such as the
retirement or death of the director, are charitable awards programs
or director legacy programs for purposes of the disclosure required
by paragraph (r)(2)(vii)(G) of this Item. Provide footnote
disclosure of the total dollar amount payable under the program and
other material terms of each such program for which tabular
disclosure is provided.
(viii) The dollar value of total compensation for the covered
fiscal year (column (h)). With respect to each director, disclose the
sum of all amounts reported in columns (b) through (g).
Instruction to Item 402(r)(2). Two or more directors may be
grouped in a single row in the Table if all elements of their
compensation are identical. The names of the directors for whom
disclosure is presented on a group basis should be clear from the
Table.
(3) Narrative to director compensation table. Provide a narrative
description of any material factors necessary to an understanding of
the director compensation disclosed in this Table. While material
factors will vary depending upon the facts, examples of such factors
may include, in given cases, among other things:
(i) A description of standard compensation arrangements (such as
fees for retainer, committee service, service as chairman of the board
or a committee, and meeting attendance); and
(ii) Whether any director has a different compensation arrangement,
identifying that director and describing the terms of that arrangement.
Instruction to Item 402(r). In addition to the Instruction to
paragraph (r)(2)(vii) of this Item, the following apply equally to
paragraph (r) of this Item: Instructions 2 and 4 to paragraph (n) of
this Item; the
[[Page 964]]
Instructions to paragraphs (n)(2)(iii) and (iv) of this Item; the
Instruction to paragraphs (n)(2)(v) and (vi) of this Item; the
Instructions to paragraph (n)(2)(vii) of this Item; the Instruction
to paragraph (n)(2)(viii) of this Item; the Instructions to
paragraph (n)(2)(ix) of this Item; and paragraph (o)(7) of this
Item. These Instructions apply to the columns in the Director
Compensation Table that are analogous to the columns in the Summary
Compensation Table to which they refer and to disclosures under
paragraph (r) of this Item that correspond to analogous disclosures
provided for in paragraph (n) of this Item to which they refer.
0
22. Amend Sec. 229.404 by revising the introductory text of paragraph
(c)(1) and adding paragraph (d) before the Instructions to Item 404 to
read as follows:
Sec. 229.404 (Item 404) Transactions with related persons, promoters
and certain control persons.
* * * * *
(c) Promoters and certain control persons. (1) Registrants that are
filing a registration statement on Form S-1 under the Securities Act
(Sec. 239.11 of this chapter) or on Form 10 under the Exchange Act
(Sec. 249.210 of this chapter) and that had a promoter at any time
during the past five fiscal years shall:
* * * * *
(d) Smaller reporting companies. A registrant that qualifies as a
``smaller reporting company,'' as defined by Sec. 229.10(f)(1), must
provide the following information in order to comply with this Item:
(1) The information required by paragraph (a) of this Item for the
period specified there for a transaction in which the amount involved
exceeds the lesser of $120,000 or one percent of the average of the
smaller reporting company's total assets at year end for the last two
completed fiscal years;
(2) The information required by paragraph (c) of this Item; and
(3) A list of all parents of the smaller reporting company showing
the basis of control and as to each parent, the percentage of voting
securities owned or other basis of control by its immediate parent, if
any.
Instruction to Item 404(d)
1. Include information for any material underwriting discounts
and commissions upon the sale of securities by the smaller reporting
company where any of the persons specified in paragraph (a) of this
Item was or is to be a principal underwriter or is a controlling
person or member of a firm that was or is to be a principal
underwriter.
2. For smaller reporting companies information shall be given
for the period specified in paragraph (a) of this Item and, in
addition, for the fiscal year preceding the small reporting
company's last fiscal year.
* * * * *
0
23. Amend Sec. 229.407 by revising paragraphs (a)(1)(iii),
(d)(4)(i)(B) and adding paragraph (g) before the Instructions to Item
407 to read as follows:
Sec. 229.407 (Item 407) Corporate governance.
(a) * * *
(1) * * *
(iii) If the information called for by paragraph (a) of this Item
is being presented in a registration statement on Form S-1 (Sec.
239.11 of this chapter) under the Securities Act or on a Form 10 (Sec.
249.210 of this chapter) under the Exchange Act where the registrant
has applied for listing with a national securities exchange or in an
inter-dealer quotation system that has requirements that a majority of
the board of directors be independent, the definition of independence
that the registrant uses for determining if a majority of the board of
directors is independent, and the definition of independence that the
registrant uses for determining if members of the specific committee of
the board of directors are independent, that is in compliance with the
independence listing standards of the national securities exchange or
inter-dealer quotation system on which it has applied for listing, or
if the registrant has not adopted such definitions, the independence
standards for determining if the majority of the board of directors is
independent and if members of the committee of the board of directors
are independent of that national securities exchange or inter-dealer
quotation system.
* * * * *
(d) * * *
(4)(i) * * *
(B) The registrant is filing an annual report on Form 10-K (Sec.
249.310 of this chapter) or a proxy statement or information statement
pursuant to the Exchange Act (15 U.S.C. 78a et seq.) if action is to be
taken with respect to the election of directors; and
* * * * *
(g) Smaller reporting companies. A registrant that qualifies as a
``smaller reporting company,'' as defined by Sec. 229.10(f)(1), is not
required to provide:
(1) The disclosure required in paragraph (d)(5) of this Item in its
first annual report filed pursuant to section 13(a) or 15(d) of the
Exchange Act (15 U.S.C. 78m(a) or 78o(d)) following the effective date
of its first registration statement filed under the Securities Act (15
U.S.C. 77a et seq.) or Exchange Act (15 U.S.C. 78a et seq.); and
(2) Need not provide the disclosures required by paragraphs (e)(4)
and (e)(5) of this Item.
* * * * *
0
24. Amend Sec. 229.503 by adding paragraph (e) before the Instruction
to Item 503 to read as follows:
Sec. 229.503 (Item 503) Prospectus summary, risk factors, and ratio
of earnings to fixed charges.
* * * * *
(e) Smaller reporting companies. A registrant that qualifies as a
smaller reporting company, as defined by Sec. 229.10(f), need not
comply with paragraph (d) of this Item.
* * * * *
0
25. Amend Sec. 229.504 by revising Instruction 6 to Item 504 to read
as follows:
Sec. 229.504 (Item 504) Use of proceeds.
* * * * *
Instructions to Item 504:
* * * * *
6. Where the registrant indicates that the proceeds may, or
will, be used to finance acquisitions of other businesses, the
identity of such businesses, if known, or, if not known, the nature
of the businesses to be sought, the status of any negotiations with
respect to the acquisition, and a brief description of such business
shall be included. Where, however, pro forma financial statements
reflecting such acquisition are not required by Regulation S-X (17
CFR 210.01 through 210.12-29), including Rule 8-05 for smaller
reporting companies, to be included in the registration statement,
the possible terms of any transaction, the identification of the
parties thereto or the nature of the business sought need not be
disclosed, to the extent that the registrant reasonably determines
that public disclosure of such information would jeopardize the
acquisition. Where Regulation S-X, including Rule 8-04 for smaller
reporting companies, as applicable, would require financial
statements of the business to be acquired to be included, the
description of the business to be acquired shall be more detailed.
* * * * *
0
26. Amend Sec. 229.512 by revising the introductory text of paragraph
(e) to read as follows:
Sec. 229.512 (Item 512) Undertakings.
* * * * *
(e) Incorporated annual and quarterly reports. Include the
following if the registration statement specifically incorporates by
reference (other than by indirect incorporation by reference through a
Form 10-K (Sec. 249.310 of this chapter) report) in the prospectus all
or any part of the annual report to security holders meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the
[[Page 965]]
Exchange Act (Sec. 240.14a-3 or Sec. 240.14c-3 of this chapter):
* * * * *
0
27. Amend Sec. 229.601 by:
0
a. Revising paragraph (a)(4); the Exhibit Table; and paragraphs
(b)(4)(ii), (b)(4)(v), (b)(10)(iii)(C)(6), introductory text (b)(13),
(b)(13)(i), (b)(15), (b)(19), and (b)(22); and
0
b. Adding paragraph (c) to read as follows:
Sec. 229.601 (Item 601) Exhibits.
(a) * * *
(4) If a material contract or plan of acquisition, reorganization,
arrangement, liquidation or succession is executed or becomes effective
during the reporting period reflected by a Form 10-Q or Form 10-K, it
shall be filed as an exhibit to the Form 10-Q or Form 10-K filed for
the corresponding period. Any amendment or modification to a previously
filed exhibit to a Form 10, 10-K or 10-Q document shall be filed as an
exhibit to a Form 10-Q and Form 10-K. Such amendment or modification
need not be filed where such previously filed exhibit would not be
currently required.
* * * * *
Exhibit Table
Instructions to the Exhibit Table.
1. The exhibit table indicates those documents that must be
filed as exhibits to the respective forms listed.
2. The ``X'' designation indicates the documents which are
required to be filed with each form even if filed previously with
another document, Provided, However, that such previously filed
documents may be incorporated by reference to satisfy the filing
requirements.
3. The number used in the far left column of the table refers to
the appropriate subsection in paragraph (b) where a description of
the exhibit can be found. Whenever necessary, alphabetical or
numerical subparts may be used.
Exhibit Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Securities Act forms Exchange Act forms
-------------------------------------------------------------------------------------------------------
S-4 F-4 8-K
S-1 S-3 \1\ S-8 S-11 F-1 F-3 \1\ 10 \2\ 10-D 10-Q 10-K
--------------------------------------------------------------------------------------------------------------------------------------------------
(1) Underwriting agreement................ X X X ...... X X X X ...... X ...... ...... ......
(2) Plan of acquisition, reorganization, X X X ...... X X X X X X ...... X X
arrangement, liquidation or succession...
(3)(i) Articles of incorporation.......... X ...... X ...... X X ...... X X X X X X
(ii) Bylaws............................... X ...... X ...... X X ...... X X X X X X
(4) Instruments defining the rights of X X X X X X X X X X X X X
security holders, including indentures...
(5) Opinion re legality................... X X X X X X X X ...... ...... ...... ...... ......
(6) [Reserved]............................ N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
(7) Correspondence from an independent ...... ...... ...... ...... ...... ...... ...... ...... ...... X ...... ...... ......
accountant regarding non-reliance on a
previously issued audit report or
completed interim review.................
(8) Opinion re tax matters................ X X X ...... X X X X ...... ...... ...... ...... ......
(9) Voting trust agreement................ X ...... X ...... X X ...... X X ...... ...... ...... X
(10) Material contracts................... X ...... X ...... X X ...... X X ...... X X X
(11) Statement re computation of per share X ...... X ...... X X ...... X X ...... ...... X X
earnings.................................
(12) Statements re computation of ratios.. X X X ...... X X ...... X X ...... ...... ...... X
(13) Annual report to security holders, ...... ...... X ...... ...... ...... ...... ...... ...... ...... ...... ...... X
Form 10-Q or quarterly report to security
holders \3\..............................
(14) Code of Ethics....................... ...... ...... ...... ...... ...... ...... ...... ...... ...... X ...... ...... X
(15) Letter re unaudited interim financial X X X X X X X X ...... ...... ...... X ......
information..............................
(16) Letter re change in certifying X ...... X ...... X ...... ...... ...... X X ...... ...... X
accountant \4\...........................
(17) Correspondence on departure of ...... ...... ...... ...... ...... ...... ...... ...... ...... X ...... ...... ......
director.................................
(18) Letter re change in accounting ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X X
principles...............................
(19) Report furnished to security holders. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X ......
(20) Other documents or statements to ...... ...... ...... ...... ...... ...... ...... ...... ...... X ...... ...... ......
security holders.........................
(21) Subsidiaries of the registrant....... X ...... X ...... X X ...... X X ...... ...... ...... X
(22) Published report regarding matters ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X X X
submitted to vote of security holders....
(23) Consents of experts and counsel...... X X X X X X X X ...... \5\ X \5\ X \5\ X \5\ X
(24) Power of attorney.................... X X X X X X X X X X ...... X X
(25) Statement of eligibility of trustee.. X X X ...... ...... X X X ...... ...... ...... ...... ......
[[Page 966]]
(26) Invitation for competitive bids...... X X X ...... ...... X X X ...... ...... ...... ...... ......
(27) through (30) [Reserved].............. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
(31)(i) Rule 13a-14(a)/15d-14(a) ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X X
Certifications...........................
(ii) Rule 13a-14/15d-14 Certifications.... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X
(32) Section 1350 Certifications \6\...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X X
(33) Report on assessment of compliance ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X
with servicing criteria for asset-backed
issuers..................................
(34) Attestation report on assessment of ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X
compliance with servicing criteria for
asset-backed securities..................
(35) Servicer compliance statement........ ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... X
(36) through (98) [Reserved].............. N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
(99) Additional exhibits.................. X X X X X X X X X X X X X
(100) XBRL-Related Documents.............. ...... ...... ...... ...... ...... ...... ...... ...... X X ...... X X
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ An exhibit need not be provided about a company if: (1) With respect to such company an election has been made under Form S-4 or F-4 to provide
information about such company at a level prescribed by Form S-3 or F-3; and (2) the form, the level of which has been elected under Form S-4 or F-4,
would not require such company to provide such exhibit if it were registering a primary offering.
\2\ A Form 8-K exhibit is required only if relevant to the subject matter reported on the Form 8-K report. For example, if the Form 8-K pertains to the
departure of a director, only the exhibit described in paragraph (b)(17) of this section need be filed. A required exhibit may be incorporated by
reference from a previous filing.
\3\ Where incorporated by reference into the text of the prospectus and delivered to security holders along with the prospectus as permitted by the
registration statement; or, in the case of the Form 10-K, where the annual report to security holders is incorporated by reference into the text of
the Form 10-K.
\4\ If required pursuant to Item 304 of Regulation S-K.
\5\ Where the opinion of the expert or counsel has been incorporated by reference into a previously filed Securities Act registration statement.
\6\ Pursuant to Sec. Sec. 240.13a-13(b)(3) and 240.15d-13(b)(3) of this chapter, asset-backed issuers are not required to file reports on Form 10-Q.
(b) * * *
(4) * * *
(ii) Except as set forth in paragraph (b)(4)(iii) of this Item for
filings on Forms S-1, S-4, S-11, N-14, and F-4 under the Securities Act
(Sec. 239.11, 239.25, 239.18, 239.23 and 239.34 of this chapter) and
Forms 10 and 10-K under the Exchange Act (Sec. Sec. 249.210 and
249.310 of this chapter) all instruments defining the rights of holders
of long-term debt of the registrant and its consolidated subsidiaries
and for any of its unconsolidated subsidiaries for which financial
statements are required to be filed.
* * * * *
(v) With respect to Forms 8-K and 10-Q under the Exchange Act that
are filed and that disclose, in the text of the Form 10-Q, the interim
financial statements, or the footnotes thereto the creation of a new
class of securities or indebtedness or the modification of existing
rights of security holders, file all instruments defining the rights of
holders of these securities or indebtedness. However, there need not be
filed any instrument with respect to long-term debt not being
registered which meets the exclusion set forth in paragraph
(b)(4)(iii)(A) of this Item.
* * * * *
(10) * * *
(iii) * * *
(C) * * *
(6) Any compensatory plan, contract, or arrangement if the
registrant is a wholly owned subsidiary of a company that has a class
of securities registered pursuant to section 12 or files reports
pursuant to section 15(d) of the Exchange Act and is filing a report on
Form 10-K or registering debt instruments or preferred stock that are
not voting securities on Form S-1.
* * * * *
(13) Annual report to security holders, Form 10-Q or quarterly
report to security holders.
(i) The registrant's annual report to security holders for its last
fiscal year, its Form 10-Q (if specifically incorporated by reference
in the prospectus) or its quarterly report to security holders, if all
or a portion thereof is incorporated by reference in the filing. Such
report, except for those portions thereof that are expressly
incorporated by reference in the filing, is to be furnished for the
information of the Commission and is not to be deemed ``filed'' as part
of the filing. If the financial statements in the report have been
incorporated by reference in the filing, the accountant's certificate
shall be manually signed in one copy. See Rule 411(b) (Sec. 230.411(b)
of this chapter).
* * * * *
(15) Letter re unaudited interim financial information. A letter,
where applicable, from the independent accountant that acknowledges
awareness of the use in a registration statement of a report on
unaudited interim financial information that pursuant to Rule 436(c)
under the Securities Act (Sec. 230.436(c) of this chapter) is not
considered a part of a registration statement prepared or certified by
an accountant or a report prepared or certified by an accountant within
the meaning of sections 7 and 11 of that Act. Such letter may be filed
with the registration statement, an amendment thereto, or a report on
Form 10-Q which is incorporated by reference into the registration
statement.
* * * * *
(19) Report furnished to security holders. If the registrant makes
available to its security holders or otherwise publishes, within the
period prescribed for filing the report, a document or
[[Page 967]]
statement containing information meeting some or all of the
requirements of Part I of Form 10-Q, the information called for may be
incorporated by reference to such published document or statement,
provided copies thereof are included as an exhibit to the registration
statement or to Part I of the Form 10-Q report.
* * * * *
(22) Published report regarding matters submitted to vote of
security holders. Published reports containing all of the information
called for by Item 4 of Part II of Form 10-Q or Item 4 of Part I of
Form 10-K that is referred to therein in lieu of providing disclosure
in Form 10-Q or 10-K, that are required to be filed as exhibits by Rule
12b-23(a)(3) under the Exchange Act (Sec. 240.12b-23(a)(3) of this
chapter).
* * * * *
(c) Smaller reporting companies. A smaller reporting company need
not provide the disclosure required in paragraph (b)(12) of this Item,
Statements re computation of ratios.
0
28. Amend Sec. 229.701 by revising paragraph (e) to read as follows:
Sec. 229.701 (Item 701) Recent sales of unregistered securities; use
of proceeds from registered securities.
* * * * *
(e) Terms of conversion or exercise. If the information called for
by this paragraph (e) is being presented on Form 8-K, Form 10-Q, Form
10-K, or Form 10-D under the Exchange Act (Sec. 249.308, Sec.
249.308(a), Sec. 240.310 or Sec. 249.312) of this chapter, and where
the securities sold by the registrant are convertible or exchangeable
into equity securities, or are warrants or options representing equity
securities, disclose the terms of conversion or exercise of the
securities.
* * * * *
0
29. Amend Sec. 229.1118 by revising paragraph (b)(2) to read as
follows:
Sec. 229.1118 (Item 1118) Reports and additional information.
* * * * *
(b) * * *
(2) State that the public may read and copy any materials filed
with the Commission at the Commission's Public Reference Room at 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. State that the public may obtain
information on the operation of the Public Reference Room by calling
the Securities and Exchange Commission at 1-800-SEC-0330. State that
the Commission maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers
that file electronically with the Commission and state the address of
that site (http://www.sec.gov).
* * * * *
PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933
0
30. The authority citation for part 230 continues to read in part as
follows:
Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r,
77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78t, 78w,
78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37,
unless otherwise noted.
* * * * *
0
31. Amend Sec. 230.110 by revising paragraph (a) to read as follows:
Sec. 230.110 Business hours of the Commission.
(a) General. The principal office of the Commission, at 100 F
Street, NE., Washington, DC 20549, is open each day, except Saturdays,
Sundays, and Federal holidays, from 9 a.m. to 5:30 p.m., Eastern
Standard Time or Eastern Daylight Saving Time, whichever is currently
in effect, provided that hours for the filing of documents pursuant to
the Act or the rules and regulations thereunder are as set forth in
paragraphs (b), (c) and (d) of this section.
* * * * *
0
32. Amend Sec. 230.138 by revising paragraph (a)(2)(i) to read as
follows:
Sec. 230.138 Publications or distributions of research reports by
brokers or dealers about securities other than those they are
distributing.
(a) * * *
(2) * * *
(i) Is required to file reports, and has filed all periodic reports
required during the preceding 12 months (or such shorter time that the
issuer was required to file such reports) on Forms 10-K (Sec. 249.310
of this chapter), 10-Q (Sec. 249.308a of this chapter), and 20-F
(Sec. 249.220f of this chapter) pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));
or
* * * * *
0
33. Amend Sec. 230.139 by revising paragraph (a)(1)(i)(A)(2) to read
as follows:
Sec. 230.139 Publications or distributions of research reports by
brokers or dealers distributing securities.
(a) * * *
(1) * * *
(i) * * *
(A) * * *
(2) As of the date of reliance on this section, has filed all
periodic reports required during the preceding 12 months on Forms 10-K
(Sec. 249.310 of this chapter), 10-Q (Sec. 249.308a of this chapter),
and 20-F (Sec. 249.220f of this chapter) pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)); or
* * * * *
0
34. Amend Sec. 230.158 by revising paragraphs (a)(1)(i), (a)(2)(i),
and (b) to read as follows:
Sec. 230.158 Definitions of certain terms in the last paragraph of
section 11(a).
(a) * * *
(1) * * *
(i) In Item 8 of Form 10-K (Sec. 239.310 of this chapter), part I,
Item 1 of Form 10-Q (Sec. 240.308a of this chapter), or Rule 14a-3(b)
(Sec. 240.14a-3(b) of this chapter) under the Securities Exchange Act
of 1934;
* * * * *
(2) * * *
(i) On Form 10-K, Form 10-Q, Form 8-K (Sec. 249.308 of this
chapter), or in the annual report to security holders pursuant to Rule
14a-3 under the Securities Exchange Act of 1934 (Sec. 240.14a-3 of
this chapter); or
* * * * *
(b) For purposes of the last paragraph of section 11(a) only, the
``earning statement'' contemplated by paragraph (a) of this section
shall be deemed to be ``made generally available to its security
holders'' if the registrant:
(1) Is required to file reports pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934 and
(2) Has filed its report or reports on Form 10-K and Form 10-KSB,
Form 10-Q and Form 10-QSB, Form 8-K, Form 20-F, Form 40-F, or Form 6-K,
or has supplied to the Commission copies of the annual report sent to
security holders pursuant to Rule 14a-3(c), (Sec. 240.14a-3(c) of this
chapter) containing such information.
A registrant may use other methods to make an earning statement
``generally available to its security holders'' for purposes of the
last paragraph of section 11(a).
* * * * *
0
35. Amend Sec. 230.175 by revising paragraphs (b)(1), (b)(1)(i), and
(b)(2) to read as follows:
Sec. 230.175 Liability for certain statements by issuers.
* * * * *
(b) * * *
(1) A forward-looking statement (as defined in paragraph (c) of
this section)
[[Page 968]]
made in a document filed with the Commission, in Part I of a quarterly
report on Form 10-Q, (Sec. 249.308a of this chapter), or in an annual
report to security holders meeting the requirements of Rule 14a-3(b)
and (c) or 14c-3(a) and (b) under the Securities Exchange Act of 1934
(Sec. Sec. 240.14a-3(b) and (c) or 240.14c-3(a) and (b) of this
chapter), a statement reaffirming such forward-looking statement after
the date the document was filed or the annual report was made publicly
available, or a forward-looking statement made before the date the
document was filed or the date the annual report was publicly available
if such statement is reaffirmed in a filed document, in Part I of a
quarterly report on Form 10-Q, or in an annual report made publicly
available within a reasonable time after the making of such forward-
looking statement; Provided, that
(i) At the time such statements are made or reaffirmed, either the
issuer is subject to the reporting requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 and has complied with the
requirements of Rule 13a-1 or 15d-1 (Sec. Sec. 239.13a-1 or 239.15d-1
of this chapter) thereunder, if applicable, to file its most recent
annual report on Form 10-K, Form 20-F, or Form 40-F; or if the issuer
is not subject to the reporting requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, the statements are made in a
registration statement filed under the Act, offering statement or
solicitation of interest, written document or broadcast script under
Regulation A or pursuant to sections 12(b) or (g) of the Securities
Exchange Act of 1934; and
* * * * *
(2) Information that is disclosed in a document filed with the
Commission, in Part I of a quarterly report on Form 10-Q (Sec.
249.308a of this chapter) or in an annual report to shareholders
meeting the requirements of Rules 14a-3 (b) and (c) or 14c-3 (a) and
(b) under the Securities Exchange Act of 1934 (Sec. Sec. 240.14a-3(b)
and (c) or 240.14c-3(a) and (b) of this chapter) and that relates to:
(i) The effects of changing prices on the business enterprise,
presented voluntarily or pursuant to Item 303 of Regulation S-K (Sec.
229.303 of this chapter), ``Management's Discussion and Analysis of
Financial Condition and Results of Operations,'' Item 5 of Form 20-F
(Sec. 249.220(f) of this chapter), ``Operating and Financial Review
and Prospects,'' Item 302 of Regulation S-K (Sec. 229.302 of this
chapter), ``Supplementary Financial Information,'' or Rule 3-20(c) of
Regulation S-X (Sec. 210.3-20(c) of this chapter); or
(ii) The value of proved oil and gas reserves (such as a
standardized measure of discounted future net cash flows relating to
proved oil and gas reserves as set forth in paragraphs 30-34 of
Statement of Financial Accounting Standards No. 69) presented
voluntarily or pursuant to Item 302 of Regulation S-K (Sec. 229.302 of
this chapter).
* * * * *
0
36. Amend Sec. 230.405 by removing the definition of ``small business
issuer'' and adding the definition of ``smaller reporting company'' in
alphabetical order to read as follows:
Sec. 230.405 Definitions of terms.
* * * * *
Smaller reporting company: As used in this part, the term smaller
reporting company means an issuer that is not an investment company, an
asset-backed issuer (as defined in Sec. 229.1101 of this chapter), or
a majority-owned subsidiary of a parent that is not a smaller reporting
company and that:
(1) Had a public float of less than $75 million as of the last
business day of its most recently completed second fiscal quarter,
computed by multiplying the aggregate worldwide number of shares of its
voting and non-voting common equity held by non-affiliates by the price
at which the common equity was last sold, or the average of the bid and
asked prices of common equity, in the principal market for the common
equity; or
(2) In the case of an initial registration statement under the
Securities Act or Exchange Act for shares of its common equity, had a
public float of less than $75 million as of a date within 30 days of
the date of the filing of the registration statement, computed by
multiplying the aggregate worldwide number of such shares held by non-
affiliates before the registration plus, in the case of a Securities
Act registration statement, the number of such shares included in the
registration statement by the estimated public offering price of the
shares; or
(3) In the case of an issuer whose public float as calculated under
paragraph (1) or (2) of this definition was zero, had annual revenues
of less than $50 million during the most recently completed fiscal year
for which audited financial statements are available.
(4) Determination: Whether or not an issuer is a smaller reporting
company is determined on an annual basis.
(i) For issuers that are required to file reports under section
13(a) or 15(d) of the Exchange Act, the determination is based on
whether the issuer came within the definition of smaller reporting
company using the amounts specified in paragraph (f)(2)(iii) of Item 10
of Regulation S-K (Sec. 229.10(f)(1)(i) of this chapter), as of the
last business day of the second fiscal quarter of the issuer's previous
fiscal year. An issuer in this category must reflect this determination
in the information it provides in its quarterly report on Form 10-Q for
the first fiscal quarter of the next year, indicating on the cover page
of that filing, and in subsequent filings for that fiscal year, whether
or not it is a smaller reporting company, except that, if a
determination based on public float indicates that the issuer is newly
eligible to be a smaller reporting company, the issuer may choose to
reflect this determination beginning with its first quarterly report on
Form 10-Q following the determination, rather than waiting until the
first fiscal quarter of the next year.
(ii) For determinations based on an initial Securities Act or
Exchange Act registration statement under paragraph (f)(1)(ii) of Item
10 of Regulation S-K (Sec. 229.10(f)(1)(ii) of this chapter), the
issuer must reflect the determination in the information it provides in
the registration statement and must appropriately indicate on the cover
page of the filing, and subsequent filings for the fiscal year in which
the filing is made, whether or not it is a smaller reporting company.
The issuer must redetermine its status at the end of its second fiscal
quarter and then reflect any change in status as provided in paragraph
(4)(i) of this definition. In the case of a determination based on an
initial Securities Act registration statement, an issuer that was not
determined to be a smaller reporting company has the option to
redetermine its status at the conclusion of the offering covered by the
registration statement based on the actual offering price and number of
shares sold.
(iii) Once an issuer fails to qualify for smaller reporting company
status, it will remain unqualified unless it determines that its public
float, as calculated in accordance with paragraph (f)(1) of this
definition, was less than $50 million as of the last business day of
its second fiscal quarter or, if that calculation results in zero
because the issuer had no public equity outstanding or no market price
for its equity existed, if the issuer had annual revenues of less than
$40 million during its previous fiscal year.
* * * * *
0
37. Amend Sec. 230.415 by revising paragraph (a)(3) to read as
follows:
[[Page 969]]
Sec. 230.415 Delayed or continuous offerings and sale of securities.
(a) * * *
(3) The registrant furnishes the undertakings required by Item
512(a) of Regulation S-K (Sec. 229.512(a) of this chapter), except
that a registrant that is an investment company filing on Form N-2 must
furnish the undertakings required by Item 34.4 of Form N-2 (Sec.
239.14 and Sec. 274.11a-1 of this chapter).
* * * * *
0
38. Amend Sec. 230.428 by revising paragraphs (b)(2)(ii), (b)(2)(iii),
(b)(2)(iv), and (b)(4) to read as follows:
Sec. 230.428 Documents constituting a section 10(a) prospectus for
Form S-8 registration statement; requirements relating to offerings of
securities registered on Form S-8.
* * * * *
(b) * * *
(2) * * *
(ii) The registrant's annual report on Form 10-K (Sec. 249.310 of
this chapter), 20-F (Sec. 249.220f of this chapter) or, in the case of
registrants described in General Instruction A.(2) of Form 40-F (Sec.
249.240f of this chapter), for its latest fiscal year;
(iii) The latest prospectus filed pursuant to Rule 424(b) (Sec.
230.424(b)) under the Act that contains audited financial statements
for the registrant's latest fiscal year, Provided that the financial
statements are not incorporated by reference from another filing, and
Provided further that such prospectus contains substantially the
information required by Rule 14a-3(b) (Sec. 240.14a-3(b) of this
chapter) or the registration statement was on Form S-1 (Sec. 239.11 of
this chapter) or F-1 (Sec. 239.31 of this chapter); or
(iv) The registrant's effective Exchange Act registration statement
on Form 10 (Sec. 249.210 of this chapter), 20-F or, in the case of
registrants described in General Instruction A.(2) of Form 40-F,
containing audited financial statements for the registrant's latest
fiscal year.
* * * * *
(4) Where interests in a plan are registered, the registrant shall
deliver or cause to be delivered promptly, without charge, to each
employee to whom information is required to be delivered, upon written
or oral request, a copy of the then latest annual report of the plan
filed pursuant to section 15(d) of the Exchange Act, whether on Form
11-K (Sec. 249.311 of this chapter) or included as part of the
registrant's annual report on Form 10-K.
* * * * *
0
39. Amend Sec. 230.430B by revising paragraphs (f)(4) introductory
text, (ii), and (i) to read as follows:
Sec. 230.430B Prospectus in a registration statement after effective
date.
* * * * *
(f) * * *
(4) Except for an effective date resulting from the filing of a
form of prospectus filed for purposes of including information required
by section 10(a)(3) of the Act or pursuant to Item 512(a)(1)(ii) of
Regulation S-K (Sec. 229.512(a)(1)(ii) of this chapter), the date a
form of prospectus is deemed part of and included in the registration
statement pursuant to this paragraph shall not be an effective date
established pursuant to paragraph (f)(2) of this section as to:
(i) * * *
(ii) Any person signing any report or document incorporated by
reference into the registration statement, except for such a report or
document incorporated by reference for purposes of including
information required by section 10(a)(3) of the Act or pursuant to Item
512(a)(1)(ii) of Regulation S-K (such person except for such reports
being deemed not to be a person who signed the registration statement
within the meaning of section 11(a) of the Act).
* * * * *
(i) Issuers relying on this section shall furnish the undertakings
required by Item 512(a) of Regulation S-K.
* * * * *
0
40. Amend Sec. 230.430C by revising paragraph (d) to read as follows:
Sec. 230.430C Prospectus in a registration statement pertaining to an
offering other than pursuant to Rule 430A or Rule 430B after the
effective date.
* * * * *
(d) Issuers subject to paragraph (a) of this section shall furnish
the undertakings required by Item 512(a) of Regulation S-K (Sec.
229.512(a) of this chapter) or Item 34.4 of Form N-2 (Sec. Sec. 239.14
and 274.11a-1 of this chapter), as applicable.
0
41. Revise Sec. 230.455 to read as follows:
Sec. 230.455 Place of filing.
All registration statements and other papers filed with the
Commission shall be filed at its principal office. Such material may be
filed by delivery to the Commission; provided, however, that only
registration statements and post-effective amendments thereto filed
pursuant to Rule 462(b) (Sec. 230.462(b)) and Rule 110(d) (Sec.
230.110(d)) may be filed by means of facsimile transmission.
0
42. Amend Sec. 30.502 by revising paragraphs (b)(2)(i)(B)(1),
(b)(2)(i)(B)(2), (b)(2)(ii)(A), (b)(2)(ii)(B), and (b)(2)(iii) to read
as follows:
Sec. 230.502 General conditions to be met.
* * * * *
(b) * * *
(2) * * *
(i) * * *
(B) Financial statement information. (1) Offerings up to
$2,000,000. The information required in Article 8 of Regulation S-X
(Sec. 210.8 of this chapter), except that only the issuer's balance
sheet, which shall be dated within 120 days of the start of the
offering, must be audited.
(2) Offerings up to $7,500,000. The financial statement information
required in Form S-1 (Sec. 239.10 of this chapter) for smaller
reporting companies. If an issuer, other than a limited partnership,
cannot obtain audited financial statements without unreasonable effort
or expense, then only the issuer's balance sheet, which shall be dated
within 120 days of the start of the offering, must be audited. If the
issuer is a limited partnership and cannot obtain the required
financial statements without unreasonable effort or expense, it may
furnish financial statements that have been prepared on the basis of
Federal income tax requirements and examined and reported on in
accordance with generally accepted auditing standards by an independent
public or certified accountant.
* * * * *
(ii) * * *
(A) The issuer's annual report to shareholders for the most recent
fiscal year, if such annual report meets the requirements of Rules 14a-
3 or 14c-3 under the Exchange Act (Sec. 240.14a-3 or Sec. 240.14c-3
of this chapter), the definitive proxy statement filed in connection
with that annual report, and if requested by the purchaser in writing,
a copy of the issuer's most recent Form 10-K (Sec. 249.310 of this
chapter) under the Exchange Act.
(B) The information contained in an annual report on Form 10-K
(Sec. 249.310 of this chapter) under the Exchange Act or in a
registration statement on Form S-1 (Sec. 239.11 of this chapter) or S-
11 (Sec. 239.18 of this chapter) under the Act or on Form 10 (Sec.
249.210 of this chapter) under the Exchange Act, whichever filing is
the most recent required to be filed.
* * * * *
(iii) Exhibits required to be filed with the Commission as part of
a registration statement or report, other than an annual report to
shareholders or parts of
[[Page 970]]
that report incorporated by reference in a Form 10-K report, need not
be furnished to each purchaser that is not an accredited investor if
the contents of material exhibits are identified and such exhibits are
made available to a purchaser, upon his or her written request, a
reasonable time before his or her purchase.
* * * * *
PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
0
43. The authority citation for part 239 continues to read in part as
follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll, 78mm, 80a-
2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29,
80a-30, and 80a-37, unless otherwise noted.
* * * * *
0
44. Amend Sec. 239.0-1 by revising paragraph (b) to read as follows:
Sec. 239.0-1 Availability of forms.
* * * * *
(b) Any person may obtain a copy of any form prescribed for use in
this part by written request to the Securities and Exchange Commission,
100 F Street, NE, Washington, DC 20549. Any persons may inspect the
forms at this address and at the Commission's regional offices. (See
Sec. 200.11 of this chapter for the addresses of the SEC regional
offices.)
0
45. By removing and reserving Sec. Sec. 239.9 and 239.10 and removing
Form SB-1 and Form SB-2.
Note: The text of Forms SB-1 and SB-2 does not appear in the
Code of Federal Regulations.
0
46. Amend Form S-1 (referenced in Sec. 239.11) by:
0
a. Adding to the cover page, above the calculation of the registration
fee table, check boxes requesting the registrant to indicate whether it
is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company; and
0
b. Revising Items 11(e), 11A, and 12(a)(1) in Part I.
The revisions and addition read as follows:
Note: The text of Form S-1 does not and this amendment will not
appear in the Code of Federal Regulations.
* * * * *
FORM S-1--REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Accelerated filer
[ballot] Non-accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
PART I--INFORMATION REQUIRED IN PROSPECTUS
* * * * *
Item 11. Information With Respect to the Registrant
* * * * *
(e) Financial statements meeting the requirements of Regulation
S-X (17 CFR part 210) (Schedules required under Regulation S-X shall
be filed as ``Financial Statements Schedules'' pursuant to Item 15,
Exhibits and Financial Statement Schedules, of this form), as well
as any financial information required by Rule 3-05 and Article 11 of
Regulation S-X. A smaller reporting company may provide the
information in Rule 8-04 and 8-05 of Regulation S-X in lieu of the
financial information required by Rule 3-05 and Article 11 of
Regulation S-X;
* * * * *
Item 11A. Material Changes
If the registrant elects to incorporate information by reference
pursuant to General Instruction VII, describe any and all material
changes in the registrant's affairs that have occurred since the end
of the latest fiscal year for which audited financial statements
were included in the latest Form 10-K and that have not been
described in a Form 10-Q or Form 8-K filed under the Exchange Act.
Item 12. Incorporation of Certain Information by Reference
* * * * *
(a) * * *
(1) The registrant's latest annual report on Form 10-K filed
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that
contains financial statements for the registrant's latest fiscal
year for which a Form 10-K was required to have been filed; and
* * * * *
0
47. Amend Form S-3 (referenced in Sec. 239.13) by adding to the cover
page, above the calculation of the registration fee table, check boxes
requesting the registrant to indicate whether it is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company and revising General Instruction II C., and in Part
I, Items 11(a) and 12(a)(1) to read as follows.
Note: The text of Form S-3 does not and this amendment will not
appear in the Code of Federal Regulations.
* * * * *
FORM S-3--REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
GENERAL INSTRUCTIONS
* * * * *
II. Application of General Rules and Regulations
* * * * *
C. A smaller reporting company, defined in Rule 405 (17 CFR
230.405), that is eligible to use Form S-3 shall use the disclosure
items in Regulation S-K (17 CFR 229.10 et seq.) with specific
attention to the scaled disclosure provided for smaller reporting
companies, if any. Smaller reporting companies may provide the
financial information called for by Article 8 of Regulation S-X in
lieu of the financial information called for by Item 11 in this
form.
* * * * *
PART I--INFORMATION REQUIRED IN PROSPECTUS
* * * * *
Item 11. Material Changes
(a) Describe any and all material changes in the registrant's
affairs that have occurred since the end of the latest fiscal year
for which certified financial statements were included in the latest
annual report to security holders and that have not been described
in a report on Form 10-Q (Sec. 249.308a of this chapter) or Form 8-
K (Sec. 249.308 of this chapter) filed under the Exchange Act.
* * * * *
Item 12. Incorporation of Certain Information by Reference
(a) * * *
(1) The registrant's latest annual report on Form 10-K (17 CFR
249.310) filed pursuant to Section 13(a) or 15(d) of the Exchange
Act that contains financial statements for the registrant's latest
fiscal year for which a Form 10-K was required to be filed; and
* * * * *
0
48. Amend Form S-8 (referenced in Sec. 239.16b) by adding to the cover
page, above the calculation of registration fee table, check boxes
requesting the registrant to indicate whether a registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company and
[[Page 971]]
revising General Instructions A.1(a)(6) and B.3. to read as follows:
Note: The text of Form S-8 does not and this amendment will not
appear in the Code of Federal Regulations.
FORM S-8--REGISTRATION OF SECURITIES UNDER THE SECURITIES ACT OF 1933
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
GENERAL INSTRUCTIONS
A. Rule as to Use of Form S-8
1. * * *
(a) * * *
(6) The term ``Form 10 information'' means the information that
is required by Form 10 or Form 20-F (Sec. 249.210 or Sec. 249.220f
of this chapter), as applicable to the registrant, to register under
the Securities Exchange Act of 1934 each class of securities being
registered using this form. A registrant may provide the Form 10
information in another Commission filing with respect to the
registrant.
* * * * *
B. Application of General Rules and Regulations
* * * * *
3. A ``smaller reporting company,'' defined in Sec. 230.405,
shall use the disclosure items in Regulation S-K (17 CFR 229.10 et
seq.) with specific attention to the scaled disclosure provided for
smaller reporting companies, if any.
* * * * *
0
49. Amend Form S-11 (referenced in Sec. 229.18) by:
0
a. Adding to the cover page, above the calculation of registration fee
table, check boxes requesting the registrant to indicate whether it is
a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company; and
0
b. Revising Item 27.
The revision and addition read as follows:
Note: The text of Form S-11 does not and this amendment will not
appear in the Code of Federal Regulations.
FORM S-11--FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF CERTAIN REAL ESTATE COMPANIES
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
Item 27. Financial Statements and Information
Include in the prospectus the financial statements required by
Regulation S-X, the supplementary financial information required in
Item 302 of Regulation S-K (Sec. 229.302 of this chapter) and the
information concerning changes in and disagreements with accountants
on accounting and financial disclosure required by Item 304 of
Regulation S-K (Sec. 229.304 of this chapter). Although all
schedules required by Regulation S-X are to be included in the
registration statement, all such schedules other than those prepared
in accordance with Rules 12-12, 12-28, and 12-29 of Regulation S-X
(Sec. Sec. 210.12-12, 12-28, and 12-29 of this chapter) may be
omitted from the prospectus. A smaller reporting company may provide
the information in Article 8 of Regulation S-X (Sec. 210.8 of this
chapter) in lieu of the financial information required by other
parts of Regulation S-X, and need not provide the supplementary
financial information required in Item 302 of Regulation S-K.
* * * * *
0
50. Amend Form S-4 (referenced in Sec. 239.25) by:
0
a. Adding to the cover page, above the calculation of the registration
fee table, check boxes requesting the registrant to indicate whether it
is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company;
0
b. Removing paragraph 4 of General Instruction D; and
0
c. Revising paragraph 1 of General Instruction I and in Part I Item
4(b), Item 5, Item 12(a) before the Instruction, the introductory text
of Item 12(b), paragraph 3 of Item 12(c), Item 17(b)(8), Item 18(b),
and Item 19(c).
The addition and revisions read as follows:
* * * * *
Note: The text of Form S-4 does not and this amendment will not
appear in the Code of Federal Regulations.
* * * * *
FORM S-4--REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
GENERAL INSTRUCTIONS
* * * * *
I. Roll-Up Transactions
1. If securities to be registered on this Form will be issued in
a roll-up transaction as defined in Item 901(c) of Regulation S-K
(17 CFR 229.901(c)), then the disclosure provisions of Subpart
229.900 of Regulation S-K (17 CFR 229.900) shall apply to the
transaction in addition to the provisions of this Form. A smaller
reporting company, defined in Sec. 230.405, that is engaged in a
roll-up transaction shall refer to the disclosure items in subpart
900 of Regulation S-K. To the extent that the disclosure
requirements of Subpart 229.900 are inconsistent with the disclosure
requirements of any other applicable forms or schedules, the
requirements of Subpart 229.900 are controlling.
* * * * *
PART I--INFORMATION REQUIRED IN THE PROSPECTUS
* * * * *
A. Information About the Transaction
* * * * *
Item 4. Terms of the Transaction
* * * * *
(b) If a report, opinion or appraisal materially relating to the
transaction has been received from an outside party, and such
report, opinion or appraisal is referred to in the prospectus,
furnish the same information as would be required by Item 1015(b) of
Regulation M-A (Sec. 229.1015(b) of this chapter).
Item 5. Pro Forma Financial Information
Furnish financial information required by Article 11 of
Regulation S-X (Sec. 210.11-01 et seq. of this chapter) with
respect to this transaction. A smaller reporting company may provide
the information in Rule 8-05 of Regulation S-X (Sec. 210.8-05 of
this chapter) in lieu of the financial information required by
Article 11 of Regulation S-X.
* * * * *
Item 12. Information With Respect to S-3 Registrants
* * * * *
(a) If the registrant elects to deliver this prospectus together
with a copy of either its latest Form 10-K filed pursuant to Section
13(a) or 15(d) of the Exchange Act or its latest annual report to
security holders, which at the time of original preparation met the
requirements of either Rule 14a-3 or Rule 14c-3:
[[Page 972]]
(1) Indicate that the prospectus is accompanied by either a copy
of the registrant's latest Form 10-K or a copy of its latest annual
report to security holders, whichever the registrant elects to
deliver pursuant to paragraph (a) of this Item.
(2) Provide financial and other information with respect to the
registrant in the form required by Part I of Form 10-Q as of the end
of the most recent fiscal quarter which ended after the end of the
latest fiscal year for which certified financial statements were
included in the latest Form 10-K or the latest report to security
holders (whichever the registrant elects to deliver pursuant to
paragraph (a) of this Item), and more than forty-five days before
the effective date of this registration statement (or as of a more
recent date) by one of the following means:
(i) Including such information in the prospectus;
(ii) Providing without charge to each person to whom a
prospectus is delivered a copy of the registrant's latest Form 10-Q;
or
(iii) Providing without charge to each person to whom a
prospectus is delivered a copy of the registrant's latest quarterly
report that was delivered to security holders and included the
required financial information.
(3) If not reflected in the registrant's latest Form 10-K or its
latest annual report to security holders (whichever the registrant
elects to deliver pursuant to paragraph (a) of this Item) provide
information required by Rule 3-05 (Sec. 210.3-05 of this chapter)
and Article 11 (Sec. 210.11-01 through 210.11.03 of this chapter)
of Regulation S-X. Smaller reporting companies may provide the
information required by Rules 8-04 and 8-05 of Regulation S-X.
(4) Describe any and all material changes in the registrant's
affairs that have occurred since the end of the latest fiscal year
for which audited financial statements were included in the latest
Form 10-K or latest annual report to security holders (whichever the
registrant elects to deliver pursuant to paragraph (a) of this Item)
and that were not described in a Form 10-Q or quarterly report
delivered with the prospectus in accordance with paragraph
(a)(2)(ii) or (iii) of this Item.
* * * * *
(b) If the registrant does not elect to deliver its latest Form
10-K or its latest annual report to security holders:
* * * * *
(c) * * *
(3) Such restatement of financial statements or disposition of
assets was not reflected in the registrant's latest annual report to
security holders and/or in its latest Form 10-K filed pursuant to
Section 13(a) or 15(d) of the Exchange Act.
* * * * *
Item 17. Information With Respect to Companies Other Than S-3 Companies
* * * * *
(b) * * *
(8) The quarterly financial and other information that would
have been required had the company being acquired been required to
file Part I of Form 10-Q (Sec. 249.308a of this chapter) for the
most recent quarter for which such a report would have been on file
at the time the registration statement becomes effective or for a
period ending as of a more recent date.
* * * * *
Item 18. Information if Proxies, Consents or Authorizations Are To Be
Solicited
* * * * *
(b) If the registrant or the company being acquired meets the
requirements for use of Form S-3, any information required by
paragraphs (a)(5)(ii) and (7) of this Item with respect to such
company may be incorporated by reference from its latest annual
report on Form 10-K.
Item 19. Information if Proxies, Consents or Authorizations Are Not To
Be Solicited or in an Exchange Offer
* * * * *
(c) If the registrant or the company being acquired meets the
requirements for use of Form S-3, any information required by
paragraphs (a)(5) and (7) of this Item with respect to such company
may be incorporated by reference from its latest annual report on
Form 10-K.
* * * * *
0
51. Revise Sec. 239.42 to read as follows:
Sec. 239.42 Form F-X, for appointment of agent for service of process
and undertaking for issuers registering securities on Form F-8, F-9, F-
10, or F-80 (Sec. Sec. 239.38, 239.39, 239.40, or 239.41), or
registering securities or filing periodic reports on Form 40-F (Sec.
249.240f of this chapter), or by any issuer or other non-U.S. person
filing tender offer documents on Schedule 13E-4F, 14D-1F, or 14D-9F
(Sec. Sec. 240.13e-102, 240.14d-102, or 240.14d-103 of this chapter),
by any non-U.S. person acting as trustee with respect to securities
registered on Form F-7 (Sec. 239.37), F-8, F-9, F-10, or by a Canadian
issuer qualifying an offering statement pursuant to Regulation A (Sec.
230.251 et seq. of this chapter) on Form 1-A (Sec. 239.90), or by any
non-U.S. issuer providing Form CB (Sec. 249.480 of this chapter) to
the Commission in connection with a tender offer, rights offering or
business combination.
Form F-X shall be filed with the Commission:
(a) By any issuer registering securities on Form F-8, F-9, F-10, or
F-80 under the Securities Act of 1933;
(b) By any issuer registering securities on Form 40-F under the
Securities Exchange Act of 1934;
(c) By any issuer filing a periodic report on Form 40-F, if it has
not previously filed a Form F-X in connection with the class of
securities in relation to which the obligation to file a report on Form
40-F arises;
(d) By any issuer or other non-U.S. person filing tender offer
documents on Schedule 13E-4F, 14D-1F, or 14D-9F;
(e) By any non-U.S. person acting as trustee with respect to
securities registered on Form F-7, F-8, F-9, F-10, or F-80;
(f) By a Canadian issuer qualifying an offering statement pursuant
to the provisions of Regulation A; and
(g) By any non-U.S. issuer providing Form CB to the Commission in
connection with a tender offer, rights offering or business
combination.
0
52. Amend Form F-X (referenced in Sec. 239.42) by revising General
Instructions I.(e) and II.F.(a) and (c) to read as follows:
Note: The text of Form F-X does not and this amendment will not
appear in the Code of Federal Regulations.
FORM F-X--APPOINTMENT OF AGENT FOR SERVICE OF PROCESS AND UNDERTAKING
GENERAL INSTRUCTIONS
I. * * *
* * * * *
(e) By any non-U.S. person acting as trustee with respect to
securities registered on Form F-7, F-8, F-9, F-10, or F-80; and
* * * * *
II. * * *
F. Each person filing this Form in connection with:
(a) The use of Form F-9, F-10, or 40-F or Schedule 13E-4F, 14D-
1F, or 14D-9F stipulates and agrees to appoint a successor agent for
service of process and file an amended Form F-X if the Filer
discharges the Agent or the Agent is unwilling or unable to accept
service on behalf of the Filer at any time until six years have
elapsed from the date the issuer of the securities to which such
Forms and Schedules relate has ceased reporting under the Exchange
Act;
* * * * *
(c) Its status as trustee with respect to securities registered
on Form F-7, F-8, F-9, F-10, or F-80 stipulates and agrees to
appoint a successor agent for service of process and file an amended
Form F-X if the Filer discharges the Agent or the Agent is unwilling
or unable to accept service on behalf of the Filer at any time
during which any of the securities subject to the indenture remain
outstanding; and
* * * * *
0
53. Amend Form 1-A (referenced in Sec. 239.90) by revising paragraph B
in Part II to read as follows:
Note: The text of Form 1-A does not and this amendment will not
appear in the Code of Federal Regulations.
FORM 1-A--REGULATION A OFFERING STATEMENT UNDER THE SECURITIES ACT OF
1933
* * * * *
PART II--OFFERING CIRCULAR
* * * * *
B. For all other issuers and for any issuer that so chooses--the
information required by either Part I of Form S-1, (17 CFR 239.11),
except for the financial statements called for there, or Model B of
this Part II of Form 1-A. Offering circulars prepared pursuant to
[[Page 973]]
this instruction need not follow the order of the items or other
requirements of the disclosure form. Such information shall not,
however, be set forth in such a fashion as to obscure any of the
required information or information necessary to keep the required
information from being incomplete or misleading. Information
requested to be presented in a specified tabular format shall be
given in substantially the tabular form specified in the item.
* * * * *
PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934
0
54. The authority citations for part 240 continue to read in part as
follows:
Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i,
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5,
78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4,
80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise
noted.
* * * * *
0
55. Amend Sec. 240.0-2 by revising paragraph (a) to read as follows:
Sec. 240.0-2 Business hours of the Commission.
(a) The principal office of the Commission, at 100 F Street, NE,
Washington, DC 20549, is open each day, except Saturdays, Sundays, and
Federal holidays, from 9 a.m. to 5:30 p.m., Eastern Standard Time or
Eastern Daylight Saving Time, whichever currently is in effect in
Washington, DC, provided that hours for the filing of documents
pursuant to the Act or the rules and regulations thereunder are as set
forth in paragraphs (b) and (c) of this section.
* * * * *
0
56. Amend Sec. 240.0-12 by revising the second sentence of paragraph
(c) to read as follows:
Sec. 240.0-12 Commission procedures for filing applications for
orders for exemptive relief under Section 36 of the Exchange Act.
* * * * *
(c) * * * Five copies of every paper application and every
amendment to such an application must be submitted to the Office of the
Secretary at 100 F Street, NE., Washington, DC 20549-1090. * * *
* * * * *
0
57. Amend Sec. 240.3b-6 by revising the introductory text of paragraph
(b)(1), paragraphs (b)(1)(i) and (b)(2) to read as follows:
Sec. 240.3b-6 Liability for certain statements by issuers.
* * * * *
(b) * * *
(1) A forward-looking statement (as defined in paragraph (c) of
this section) made in a document filed with the Commission, in Part I
of a quarterly report on Form 10-Q, Sec. 249.308a of this chapter, or
in an annual report to security holders meeting the requirements of
Rules 14a-3(b) and (c) or 14c-3(a) and (b) (Sec. Sec. 240.14a-3(b) and
(c) or 240.14c-3(a) and (b)), a statement reaffirming such forward-
looking statement after the date the document was filed or the annual
report was made publicly available, or a forward-looking statement made
before the date the document was filed or the date the annual report
was made publicly available if such statement is reaffirmed in a filed
document, in Part I of a quarterly report on Form 10-Q, or in an annual
report made publicly available within a reasonable time after the
making of such forward-looking statement; Provided, that:
(i) At the time such statements are made or reaffirmed, either the
issuer is subject to the reporting requirements of Section 13(a) or
15(d) of the Act and has complied with the requirements of Rule 13a-1
or 15d-1 thereunder, if applicable, to file its most recent annual
report on Form 10-K, Form 20-F or Form 40-F; or if the issuer is not
subject to the reporting requirements of Section 13(a) or 15(d) of the
Act, the statements are made in a registration statement filed under
the Securities Act of 1933 offering statement or solicitation of
interest, written document or broadcast script under Regulation A or
pursuant to Section 12(b) or (g) of the Securities Exchange Act of
1934; and
* * * * *
(2) Information that is disclosed in a document filed with the
Commission in Part I of a quarterly report on Form 10-Q (Sec. 249.308a
of this chapter) or in an annual report to security holders meeting the
requirements of Rules 14a-3(b) and (c) or 14c-3(a) and (b) under the
Act (Sec. Sec. 240.14a-3(b) and (c) or 240.14c-3(a) and (b) of this
chapter) and that relates to:
(i) The effects of changing prices on the business enterprise,
presented voluntarily or pursuant to Item 303 of Regulation S-K (Sec.
229.303 of this chapter), ``Management's Discussion and Analysis of
Financial Condition and Results of Operations,'' Item 5 of Form 20-F
(Sec. 240.220(f) of this chapter), ``Operating and Financial Review
and Prospects,'' Item 302 of Regulation S-K (Sec. 229.302 of this
chapter) ``Supplementary Financial Information,'' or Rule 3-20(c) of
Regulation S-X (Sec. 210.3-20(c) of this chapter); or
(ii) The value of proved oil and gas reserves (such as a
standardized measure of discounted future net cash flows relating to
proved oil and gas reserves as set forth in paragraphs 30-34 of
Statement of Financial Accounting Standards No. 69), presented
voluntarily or pursuant to Item 302 of Regulation S-K (Sec. 229.302 of
this chapter).
* * * * *
0
58. Amend Sec. 240.10A-1 by revising paragraphs (a)(4)(ii) and (b)(3)
to read as follows:
Sec. 240.10A-1 Notice to the Commission Pursuant to Section 10A of
the Act.
(a)(1) * * *
(4) * * *
(ii) The disclosure requirements of Item 304 of Regulation S-K,
Sec. 229.304 of this chapter.
(b)(1) * * *
(3) Submission of the report (or documentation) by the independent
accountant as described in paragraphs (b)(1) and (b)(2) of this section
shall not replace, or otherwise satisfy the need for, the newly engaged
and former accountants' letters under Items 304(a)(2)(D) and 304(a)(3)
of Regulation S-K, Sec. Sec. 229.304(a)(2)(D) and 229.304(a)(3) of
this chapter, respectively, and shall not limit, reduce, or affect in
any way the independent accountant's obligations to comply fully with
all other legal and professional responsibilities, including, without
limitation, those under generally accepted auditing standards and the
rules or interpretations of the Commission that modify or supplement
those auditing standards.
* * * * *
0
59. Amend Sec. 240.10A-3 by revising paragraph (a)(5)(i)(A) to read as
follows:
Sec. 240.10A-3 Listing standards relating to audit committees.
(a) * * *
(5) * * *
(i) * * *
(A) July 31, 2005 for foreign private issuers and smaller reporting
companies (as defined in Sec. 240.12b-2); and
* * * * *
0
60. Amend Sec. 240.12b-2 by:
0
a. Revising paragraphs (1)(iv) and (2)(iv) in the definition of
accelerated filer and large accelerated filer;
0
b. Removing the definition of small business issuer; and
0
c. Adding the definition of smaller reporting company in alphabetical
order.
The revisions and addition to read as follows:
[[Page 974]]
Sec. 240.12b-2 Definitions.
* * * * *
Accelerated filer and large accelerated filer
(1) * * *
(iv) The issuer is not eligible to use the requirements for smaller
reporting companies in Part 229 of this chapter for its annual and
quarterly reports.
(2) * * *
(iv) The issuer is not eligible to use the requirements for smaller
reporting companies in Part 229 of this chapter for its annual and
quarterly reports.
* * * * *
Smaller reporting company: As used in this part, the term smaller
reporting company means an issuer that is not an investment company, an
asset-backed issuer (as defined in Sec. 229.1101 of this chapter), or
a majority-owned subsidiary of a parent that is not a smaller reporting
company and that:
(1) Had a public float of less than $75 million as of the last
business day of its most recently completed second fiscal quarter,
computed by multiplying the aggregate worldwide number of shares of its
voting and non-voting common equity held by non-affiliates by the price
at which the common equity was last sold, or the average of the bid and
asked prices of common equity, in the principal market for the common
equity; or
(2) In the case of an initial registration statement under the
Securities Act or Exchange Act for shares of its common equity, had a
public float of less than $75 million as of a date within 30 days of
the date of the filing of the registration statement, computed by
multiplying the aggregate worldwide number of such shares held by non-
affiliates before the registration plus, in the case of a Securities
Act registration statement, the number of such shares included in the
registration statement by the estimated public offering price of the
shares; or
(3) In the case of an issuer whose public float as calculated under
paragraph (1) or (2) of this definition was zero, had annual revenues
of less than $50 million during the most recently completed fiscal year
for which audited financial statements are available.
(4) Determination: Whether or not an issuer is a smaller reporting
company is determined on an annual basis.
(i) For issuers that are required to file reports under section
13(a) or 15(d) of the Exchange Act, the determination is based on
whether the issuer came within the definition of smaller reporting
company using the amounts specified in paragraph (f)(2)(iii) of Item 10
of Regulation S-K (Sec. 229.10(f)(1)(i) of this chapter), as of the
last business day of the second fiscal quarter of the issuer's previous
fiscal year. An issuer in this category must reflect this determination
in the information it provides in its quarterly report on Form 10-Q for
the first fiscal quarter of the next year, indicating on the cover page
of that filing, and in subsequent filings for that fiscal year, whether
or not it is a smaller reporting company, except that, if a
determination based on public float indicates that the issuer is newly
eligible to be a smaller reporting company, the issuer may choose to
reflect this determination beginning with its first quarterly report on
Form 10-Q following the determination, rather than waiting until the
first fiscal quarter of the next year.
(ii) For determinations based on an initial Securities Act or
Exchange Act registration statement under paragraph (f)(1)(ii) of Item
10 of Regulation S-K (Sec. 229.10(f)(1)(ii) of this chapter), the
issuer must reflect the determination in the information it provides in
the registration statement and must appropriately indicate on the cover
page of the filing, and subsequent filings for the fiscal year in which
the filing is made, whether or not it is a smaller reporting company.
The issuer must redetermine its status at the end of its second fiscal
quarter and then reflect any change in status as provided in paragraph
(4)(i) of this definition. In the case of a determination based on an
initial Securities Act registration statement, an issuer that was not
determined to be a smaller reporting company has the option to
redetermine its status at the conclusion of the offering covered by the
registration statement based on the actual offering price and number of
shares sold.
(iii) Once an issuer fails to qualify for smaller reporting company
status, it will remain unqualified unless it determines that its public
float, as calculated in accordance with paragraph (f)(1) of this
definition, was less than $50 million as of the last business day of
its second fiscal quarter or, if that calculation results in zero
because the issuer had no public equity outstanding or no market price
for its equity existed, if the issuers had annual revenues of less than
$40 million during its previous fiscal year.
* * * * *
0
61. Amend Sec. 240.12b-23 by revising paragraphs (a)(3)(i) and (b) to
read as follows:
Sec. 240.12b-23 Incorporation by reference.
(a) * * *
(3) * * *
(i) A proxy or information statement incorporated by reference in
response to Part III of Form 10-K (17 CFR 249.310);
* * * * *
(b) Any incorporation by reference of matter pursuant to this
section shall be subject to the provisions of Sec. 229.10(d) of this
chapter restricting incorporation by reference of documents that
incorporate by reference other information. Material incorporated by
reference shall be clearly identified in the reference by page,
paragraph, and caption or otherwise. Where only certain pages of a
document are incorporated by reference and filed as an exhibit, the
document from which the material is taken shall be clearly identified
in the reference. An express statement that the specified matter is
incorporated by reference shall be made at the particular place in the
statement or report where the information is required. Matter shall not
be incorporated by reference in any case where such incorporation would
render the statement or report incomplete, unclear or confusing.
0
62. Amend Sec. 240.12b-25 by revising the section heading and
paragraphs (a) and (b)(2)(ii) to read as follows:
Sec. 240.12b-25 Notification of inability to timely file all or any
required portion of a Form 10-K, 20-F, 11-K, N-SAR, N-CSR, 10-Q, or 10-
D.
(a) If all or any required portion of an annual or transition
report on Form 10-K, 20-F or 11-K (17 CFR 249.310, 249.220f or
249.311), a quarterly or transition report on Form 10-Q (17 CFR
249.308a), or a distribution report on Form 10-D (17 CFR 249.312)
required to be filed pursuant to Section 13 or 15(d) of the Act (15
U.S.C. 78m or 78o(d)) and rules thereunder, or if all or any required
portion of a semi-annual, annual or transition report on Form N-CSR (17
CFR 249.331; 17 CFR 274.128) or Form N-SAR (17 CFR 249.330; 17 CFR
274.101) required to be filed pursuant to Section 13 or 15(d) of the
Act or section 30 of the Investment Company Act of 1940 (15 U.S.C. 80a-
29) and the rules thereunder, is not filed within the time period
prescribed for such report, the registrant, no later than one business
day after the due date for such report, shall file a Form 12b-25 (17
CFR 249.322) with the Commission which shall contain disclosure of its
inability to file the report timely and the reasons therefore in
reasonable detail.
(b) * * *
(2) * * *
(ii) The subject annual report, semi-annual report or transition
report on Form 10-K, 20-F, 11-K, N-SAR, or N-CSR, or portion thereof,
will be filed no
[[Page 975]]
later than the fifteenth calendar day following the prescribed due
date; or the subject quarterly report or transition report on Form 10-Q
or distribution report on Form 10-D, or portion thereof, will be filed
no later than the fifth calendar day following the prescribed due date;
and
* * * * *
0
63. Amend Sec. 240.12h-3 by revising paragraph (e) to read as follows:
Sec. 240.12h-3 Suspension of duty to file reports under section
15(d).
* * * * *
(e) If the suspension provided by this section is discontinued
because a class of securities does not meet the eligibility criteria of
paragraph (b) of this section on the first day of an issuer's fiscal
year, then the issuer shall resume periodic reporting pursuant to
section 15(d) of the Act by filing an annual report on Form 10-K for
its preceding fiscal year, not later than 120 days after the end of
such fiscal year.
0
64. Amend Sec. 240.13a-10 by revising paragraphs (c), (d)(2)(ii),
(d)(2)(iii), the introductory text of paragraph (e), paragraphs (e)(1),
(e)(2), (e)(4), the Note to paragraphs (c) and (e) and the introductory
text of paragraph (j)(2) to read as follows:
Sec. 240.13a-10 Transition reports.
* * * * *
(c) If the transition period covers a period of less than six
months, in lieu of the report required by paragraph (b) of this
section, a report may be filed for the transition period on Form 10-Q
(Sec. 249.308a of this chapter) not more than the number of days
specified in paragraph (j) of this section after either the close of
the transition period or the date of the determination to change the
fiscal closing date, whichever is later. The report on Form 10-Q shall
cover the period from the close of the last fiscal year end and shall
indicate clearly the period covered. The financial statements filed
therewith need not be audited but, if they are not audited, the issuer
shall file with the first annual report for the newly adopted fiscal
year separate audited statements of income and cash flows covering the
transition period. The notes to financial statements for the transition
period included in such first annual report may be integrated with the
notes to financial statements for the full fiscal period. A separate
audited balance sheet as of the end of the transition period shall be
filed in the annual report only if the audited balance sheet as of the
end of the fiscal year prior to the transition period is not filed.
Schedules need not be filed in transition reports on Form 10-Q.
(d) * * *
(2) * * *
(ii) The first report required to be filed by the issuer for the
newly adopted fiscal year after the date of the determination to change
the fiscal year end is a quarterly report on Form 10-Q; and
(iii) Information on the transition period is included in the
issuer's quarterly report on Form 10-Q for the first quarterly period
(except the fourth quarter) of the newly adopted fiscal year that ends
after the date of the determination to change the fiscal year. The
information covering the transition period required by Part II and Item
2 of Part I may be combined with the information regarding the quarter.
However, the financial statements required by Part I, which may be
unaudited, shall be furnished separately for the transition period.
(e) Every issuer required to file quarterly reports on Form 10-Q
pursuant to Sec. 240.13a-13 of this chapter that changes its fiscal
year end shall:
(1) File a quarterly report on Form 10-Q within the time period
specified in General Instruction A.1. to that form for any quarterly
period (except the fourth quarter) of the old fiscal year that ends
before the date on which the issuer determined to change its fiscal
year end, except that the issuer need not file such quarterly report if
the date on which the quarterly period ends also is the date on which
the transition period ends;
(2) File a quarterly report on Form 10-Q within the time specified
in General Instruction A.1. to that form for each quarterly period of
the old fiscal year within the transition period. In lieu of a
quarterly report for any quarter of the old fiscal year within the
transition period, the issuer may file a quarterly report on Form 10-Q
for any period of three months within the transition period that
coincides with a quarter of the newly adopted fiscal year if the
quarterly report is filed within the number of days specified in
paragraph (j) of this section after the end of such three month period,
provided the issuer thereafter continues filing quarterly reports on
the basis of the quarters of the newly adopted fiscal year;
* * * * *
(4) Unless such information is or will be included in the
transition report, or the first annual report on Form 10-K for the
newly adopted fiscal year, include in the initial quarterly report on
Form 10-Q for the newly adopted fiscal year information on any period
beginning on the first day subsequent to the period covered by the
issuer's final quarterly report on Form 10-Q or annual report on Form
10-K for the old fiscal year. The information covering such period
required by Part II and Item 2 of Part I may be combined with the
information regarding the quarter. However, the financial statements
required by Part I, which may be unaudited, shall be furnished
separately for such period.
Note to paragraphs (c) and (e): If it is not practicable or
cannot be cost-justified to furnish in a transition report on Form
10-Q or a quarterly report for the newly adopted fiscal year
financial statements for corresponding periods of the prior year
where required, financial statements may be furnished for the
quarters of the preceding fiscal year that most nearly are
comparable if the issuer furnishes an adequate discussion of
seasonal and other factors that could affect the comparability of
information or trends reflected, an assessment of the comparability
of the data, and a representation as to the reason recasting has not
been undertaken.
* * * * *
(j) * * *
(2) For transition reports to be filed on Form 10-Q (Sec. 249.308a
of this chapter) the number of days shall be:
* * * * *
0
65. Amend Sec. 240.13a-13 by revising the section heading, paragraph
(a), the introductory text of paragraph (c), and paragraph (d) to read
as follows:
Sec. 240.13a-13 Quarterly reports on Form 10-Q (Sec. 249.308a of
this chapter).
(a) Except as provided in paragraphs (b) and (c) of this section,
every issuer that has securities registered pursuant to section 12 of
the Act and is required to file annual reports pursuant to section 13
of the Act, and has filed or intends to file such reports on Form 10-K
(Sec. 249.310 of this chapter), shall file a quarterly report on Form
10-Q (Sec. 249.308a of this chapter) within the period specified in
General Instruction A.1. to that form for each of the first three
quarters of each fiscal year of the issuer, commencing with the first
fiscal quarter following the most recent fiscal year for which full
financial statements were included in the registration statement, or,
if the registration statement included financial statements for an
interim period subsequent to the most recent fiscal year end meeting
the requirements of Article 10 of Regulation S-X and Rule 8-03 of
Regulation S-X for smaller reporting companies, for the first fiscal
quarter subsequent to the quarter reported upon in the registration
statement. The first quarterly report of the issuer shall be filed
either within 45 days after the effective date of the registration
statement or on or before the date on which such report would have
[[Page 976]]
been required to be filed if the issuer has been required to file
reports on Form 10-Q as of its last fiscal quarter, whichever is later.
* * * * *
(c) Part I of the quarterly reports on Form 10-Q need not be filed
by:
* * * * *
(d) Notwithstanding the foregoing provisions of this section, the
financial information required by Part I of Form 10-Q shall not be
deemed to be ``filed'' for the purpose of Section 18 of the Act or
otherwise subject to the liabilities of that section of the Act, but
shall be subject to all other provisions of the Act.
0
66. Amend Sec. 240.13a-14 by revising paragraph (a) to read as
follows:
Sec. 240.13a-14 Certification of disclosure in annual and quarterly
reports.
(a) Each report, including transition reports, filed on Form 10-Q,
Form 10-K, Form 20-F or Form 40-F (Sec. Sec. 249.308a, 249.310,
249.220f or 249.240f of this chapter) under Section 13(a) of the Act
(15 U.S.C. 78m(a)), other than a report filed by an Asset-Backed Issuer
(as defined in Sec. 229.1101 of this chapter) or a report on Form 20-F
filed under Sec. 240.13a-19, must include certifications in the form
specified in the applicable exhibit filing requirements of such report
and such certifications must be filed as an exhibit to such report.
Each principal executive and principal financial officer of the issuer,
or persons performing similar functions, at the time of filing of the
report must sign a certification. The principal executive and principal
financial officers of an issuer may omit the portion of the
introductory language in paragraph 4 as well as language in paragraph
4(b) of the certification that refers to the certifying officers'
responsibility for designing, establishing and maintaining internal
control over financial reporting for the issuer until the issuer
becomes subject to the internal control over financial reporting
requirements in Sec. 240.13a-15 or 240.15d-15.
* * * * *
0
67. Amend Sec. 240.13a-16 by revising paragraph (a)(3) to read as
follows:
Sec. 240.13a-16 Reports of foreign private issuers on Form 6-K (17
CFR 249.306).
(a) * * *
(3) Issuers filing periodic reports on Form 10-K, Form 10-Q, and
Form 8-K; or
* * * * *
0
68. Amend Sec. 240.13a-20 by revising the introductory text of
paragraph (a) to read as follows:
Sec. 240.13a-20 Plain English presentation of specified information.
(a) Any information included or incorporated by reference in a
report filed under section 13(a) of the Act (15 U.S.C. 78m(a)) that is
required to be disclosed pursuant to Item 402, 403, 404 or 407 of
Regulation S-K (Sec. 229.402, 229.403, 229.404 or 229.407 of this
chapter) must be presented in a clear, concise and understandable
manner. You must prepare the disclosure using the following standards:
* * * * *
0
69. Amend Sec. 240.14a-3 by:
0
a. Removing the Note to Small Business Issuers following the
introductory text of paragraph (b);
0
b. Revising paragraph (b)(1) and Note 1;
0
c. Revising the heading ``Note 2'' to read ``Note 2 to Paragraph
(b)(i)''; and
0
d. Revising paragraphs (b)(5)(ii), (b)(10) and its Note, and (d) to
read as follows:
Sec. 240.14a-3 Information to be furnished to security holders.
* * * * *
(b) * * *
(1) The report shall include, for the registrant and its
subsidiaries, consolidated and audited balance sheets as of the end of
the two most recent fiscal years and audited statements of income and
cash flows for each of the three most recent fiscal years prepared in
accordance with Regulation S-X (part 210 of this chapter), except that
the provisions of Article 3 (other than Sec. Sec. 210.3-03(e), 210.3-
04 and 210.3-20) and Article 11 shall not apply. Any financial
statement schedules or exhibits or separate financial statements which
may otherwise be required in filings with the Commission may be
omitted. If the financial statements of the registrant and its
subsidiaries consolidated in the annual report filed or to be filed
with the Commission are not required to be audited, the financial
statements required by this paragraph may be unaudited. A smaller
reporting company may provide the information in Article 8 of
Regulation S-X (Sec. 210.8 of this chapter) in lieu of the financial
information required by this paragraph 9(b)(1).
Note 1 to Paragraph (b)(1): If the financial statements for a
period prior to the most recently completed fiscal year have been
examined by a predecessor accountant, the separate report of the
predecessor accountant may be omitted in the report to security
holders, provided the registrant has obtained from the predecessor
accountant a reissued report covering the prior period presented and
the successor accountant clearly indicates in the scope paragraph of
his or her report (a) that the financial statements of the prior
period were examined by other accountants, (b) the date of their
report, (c) the type of opinion expressed by the predecessor
accountant and (d) the substantive reasons therefore, if it was
other than unqualified. It should be noted, however, that the
separate report of any predecessor accountant is required in filings
with the Commission. If, for instance, the financial statements in
the annual report to security holders are incorporated by reference
in a Form 10-K, the separate report of a predecessor accountant
shall be filed in Part II or in Part IV as a financial statement
schedule.
* * * * *
(5) * * *
(ii) The report shall contain management's discussion and analysis
of financial condition and results of operations required by Item 303
of Regulation S-K (Sec. 229.303 of this chapter).
* * * * *
(10) The registrant's proxy statement, or the report, shall contain
an undertaking in bold face or otherwise reasonably prominent type to
provide without charge to each person solicited upon the written
request of any such person, a copy of the registrant's annual report on
Form 10-K, including the financial statements and the financial
statement schedules, required to be filed with the Commission pursuant
to Rule 13a-1 (Sec. 240.13a-1 of this chapter) under the Act for the
registrant's most recent fiscal year, and shall indicate the name and
address (including title or department) of the person to whom such a
written request is to be directed. In the discretion of management, a
registrant need not undertake to furnish without charge copies of all
exhibits to its Form 10-K, provided that the copy of the annual report
on Form 10-K furnished without charge to requesting security holders is
accompanied by a list briefly describing all the exhibits not contained
therein and indicating that the registrant will furnish any exhibit
upon the payment of a specified reasonable fee, which fee shall be
limited to the registrant's reasonable expenses in furnishing such
exhibit. If the registrant's annual report to security holders complies
with all of the disclosure requirements of Form 10-K and is filed with
the Commission in satisfaction of its Form 10-K filing requirements,
such registrant need not furnish a separate Form 10-K to security
holders who receive a copy of such annual report.
Note to Paragraph (b)(10): Pursuant to the undertaking required
by paragraph (b)(10) of this section, a registrant shall furnish a
copy of its annual report on Form 10-K (Sec. 249.310
[[Page 977]]
of this chapter) to a beneficial owner of its securities upon
receipt of a written request from such person. Each request must set
forth a good faith representation that, as of the record date for
the solicitation requiring the furnishing of the annual report to
security holders pursuant to paragraph (b) of this section, the
person making the request was a beneficial owner of securities
entitled to vote.
* * * * *
(d) An annual report to security holders prepared on an integrated
basis pursuant to General Instruction H to Form 10-K (Sec. 249.310 of
this chapter) may also be submitted in satisfaction of this section.
When filed as the annual report on Form 10-K, responses to the Items of
that form are subject to section 18 of the Act notwithstanding
paragraph (c) of this section.
* * * * *
0
70. Amend Sec. 240.14a-5 by removing the authority citation following
the section and revising paragraph (f) to read as follows:
Sec. 240.14a-5 Presentation of information in proxy statement.
* * * * *
(f) If the date of the next annual meeting is subsequently advanced
or delayed by more than 30 calendar days from the date of the annual
meeting to which the proxy statement relates, the registrant shall, in
a timely manner, inform shareholders of such change, and the new dates
referred to in paragraphs (e)(1) and (e)(2) of this section, by
including a notice, under Item 5, in its earliest possible quarterly
report on Form 10-Q (Sec. 249.308a of this chapter), or, in the case
of investment companies, in a shareholder report under Sec. 270.30d-1
of this chapter under the Investment Company Act of 1940, or, if
impracticable, any means reasonably calculated to inform shareholders.
0
71. Amend Sec. 240.14a-8, by revising paragraph (e)(1) to read as
follows:
Sec. 240.14a-8 Shareholder proposals.
* * * * *
(e) * * *
(1) If you are submitting your proposal for the company's annual
meeting, you can in most cases find the deadline in last year's proxy
statement. However, if the company did not hold an annual meeting last
year, or has changed the date of its meeting for this year more than 30
days from last year's meeting, you can usually find the deadline in one
of the company's quarterly reports on Form 10-Q (Sec. 249.308a of this
chapter), or in shareholder reports of investment companies under Sec.
270.30d-1 of this chapter of the Investment Company Act of 1940. In
order to avoid controversy, shareholders should submit their proposals
by means, including electronic means, that permit them to prove the
date of delivery.
* * * * *
0
72. Amend Sec. 240.14a-101 by:
0
a. Revising Notes C. and D.1, and the introductory text of Note E.;
0
b. Removing Notes F. and G. to the cover page;
0
c. Revising paragraph (e)(1) of Item 9, and revising paragraph (a)(1)
of Item 13.
The revisions to read as follows:
Sec. 240.14a-101 Schedule 14A. Information required in proxy
statement.
* * * * *
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
* * * * *
Notes: * * *
C. Except as otherwise specifically provided, where any item
calls for information for a specified period with regard to
directors, executive officers, officers or other persons holding
specified positions or relationships, the information shall be given
with regard to any person who held any of the specified positions or
relationship at any time during the period. Information, other than
information required by Item 404 of Regulation S-K (Sec. 229.404 of
this chapter), need not be included for any portion of the period
during which such person did not hold any such position or
relationship, provided a statement to that effect is made.
D. * * *
1. Any incorporation by reference of information pursuant to the
provisions of this schedule shall be subject to the provisions of
Sec. 229.10(d) of this chapter restricting incorporation by
reference of documents that incorporate by reference other
information. A registrant incorporating any documents, or portions
of documents, shall include a statement on the last page(s) of the
proxy statement as to which documents, or portions of documents, are
incorporated by reference. Information shall not be incorporated by
reference in any case where such incorporation would render the
statement incomplete, unclear or confusing.
* * * * *
E. In Item 13 of this Schedule, the reference to ``meets the
requirement of Form S-3'' shall refer to a registrant who meets the
following requirements:
* * * * *
Item 9. Independent public accountants.
* * * * *
(e)(1) Disclose, under the caption Audit Fees, the aggregate
fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the
registrant's annual financial statements and review of financial
statements included in the registrant's Form 10-Q (17 CFR 249.308a)
or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for
those fiscal years.
* * * * *
Item 13. Financial and other information. (See Notes D and E at
the beginning of this Schedule.)
(a) * * *
(1) Financial statements meeting the requirements of Regulation
S-X, including financial information required by Rule 3-05 and
Article 11 of Regulation S-X with respect to transactions other than
pursuant to which action is to be taken as described in this proxy
statement (A smaller reporting company may provide the information
in Rules 8-04 and 8-05 of Regulation S-X (Sec. 210.8-04 and Sec.
210.8-05 of this chapter) in lieu of the financial information
required by Rule 3-05 and Article 11 of Regulation S-X);
* * * * *
Sec. 240.14c-3 [Amended]
0
73. Amend Sec. 240.14c-3 by removing the Note to Small Business
Issuers following paragraph (a)(2).
0
74. Amend Sec. 240.14c-101 by revising the Note that follows the cover
page to read as follows:
Sec. 240.14c-101 Schedule 14C. Information required in information
statement.
Schedule 14C Information
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
* * * * *
Note to Cover Page: Where any item, other than Item 4, calls for
information with respect to any matter to be acted upon at the
meeting or, if no meeting is being held, by written authorization or
consent, such item need be answered only with respect to proposals
to be made by the registrant. Registrants and acquirees that meet
the definition of ``smaller reporting company'' under Rule 12b-2 of
the Exchange Act (Sec. 240.12b-2) shall refer to the disclosure
items in Regulation S-K (Sec. Sec. 229.10 through 229.1123 of this
chapter) with specific attention to the scaled disclosure
requirements for smaller reporting companies, if any. A smaller
reporting company may provide the information in Article 8 of
Regulation S-X in lieu of any financial statements required by Item
1 of Sec. 240.14c-101.
* * * * *
0
75. Amend Sec. 240.14d-3 by removing the authority citation following
the section and revising paragraph (a)(3)(i) to read as follows:
Sec. 240.14d-3 Filing and transmission of tender offer statement.
(a) * * *
(3) * * *
(i) To each national securities exchange where such class of the
subject company's securities is registered and listed for trading
(which may be based upon information contained in the subject company's
[[Page 978]]
most recent Annual Report on Form 10-K (Sec. 249.310 of this chapter)
filed with the Commission unless the bidder has reason to believe that
such information is not current), which telephonic notice shall be made
when practicable before the opening of each such exchange; and
* * * * *
0
76. Amend Sec. 240.15d-10 by revising paragraphs (c), (d)(2)(ii),
(d)(2)(iii), the introductory text of (e), paragraphs (e)(1), (e)(2),
(e)(4), the Note to paragraphs (c) and (e), paragraph (f), and the
introductory text of (j)(2) to read as follows:
Sec. 240.15d-10 Transition reports.
* * * * *
(c) If the transition period covers a period of less than six
months, in lieu of the report required by paragraph (b) of this
section, a report may be filed for the transition period on Form 10-Q
(Sec. 249.308 of this chapter) not more than the number of days
specified in paragraph (j) of this section after either the close of
the transition period or the date of the determination to change the
fiscal closing date, whichever is later. The report on Form 10-Q shall
cover the period from the close of the last fiscal year end and shall
indicate clearly the period covered. The financial statements filed
therewith need not be audited but, if they are not audited, the issuer
shall file with the first annual report for the newly adopted fiscal
year separate audited statements of income and cash flows covering the
transition period. The notes to financial statements for the transition
period included in such first annual report may be integrated with the
notes to financial statements for the full fiscal period. A separate
audited balance sheet as of the end of the transition period shall be
filed in the annual report only if the audited balance sheet as of the
end of the fiscal year before the transition period is not filed.
Schedules need not be filed in transition reports on Form 10-Q.
(d) * * *
(2)(i) * * *
(ii) The first report required to be filed by the issuer for the
newly adopted fiscal year after the date of the determination to change
the fiscal year end is a quarterly report on Form 10-Q; and
(iii) Information on the transition period is included in the
issuer's quarterly report on Form 10-Q for the first quarterly period
(except the fourth quarter) of the newly adopted fiscal year that ends
after the date of the determination to change the fiscal year. The
information covering the transition period required by Part II and Item
2 of Part I may be combined with the information regarding the quarter.
However, the financial statements required by Part I, which may be
unaudited, shall be furnished separately for the transition period.
* * * * *
(e) Every issuer required to file quarterly reports on Form 10-Q
pursuant to Sec. 240.15d-13 that changes its fiscal year end shall:
(1) File a quarterly report on Form 10-Q within the time period
specified in General Instruction A.1. to that form for any quarterly
period (except the fourth quarter) of the old fiscal year that ends
before the date on which the issuer determined to change its fiscal
year end, except that the issuer need not file such quarterly report if
the date on which the quarterly period ends also is the date on which
the transition period ends;
(2) File a quarterly report on Form 10-Q within the time specified
in General Instruction A.1 to that form for each quarterly period of
the old fiscal year within the transition period. In lieu of a
quarterly report for any quarter of the old fiscal year within the
transition period, the issuer may file a quarterly report on Form 10-Q
for any period of three months within the transition period that
coincides with a quarter of the newly adopted fiscal year if the
quarterly report is filed within the number of days specified in
paragraph (j) of this section after the end of such three month period,
provided the issuer thereafter continues filing quarterly reports on
the basis of the quarters of the newly adopted fiscal year;
* * * * *
(4) Unless such information is or will be included in the
transition report, or the first annual report on Form 10-K for the
newly adopted fiscal year, include in the initial quarterly report on
Form 10-Q for the newly adopted fiscal year information on any period
beginning on the first day after the period covered by the issuer's
final quarterly report on Form 10-Q or annual report on Form 10-K for
the old fiscal year. The information covering such period required by
Part II and Item 2 of Part I may be combined with the information
regarding the quarter. However, the financial statements required by
Part I, which may be unaudited, shall be furnished separately for such
period.
Note to Paragraphs (c) and (e): If it is not practicable or
cannot be cost-justified to furnish in a transition report on Form
10-Q or a quarterly report for the newly adopted fiscal year
financial statements for corresponding periods of the prior year
where required, financial statements may be furnished for the
quarters of the preceding fiscal year that most nearly are
comparable if the issuer furnishes an adequate discussion of
seasonal and other factors that could affect the comparability of
information or trends reflected, an assessment of the comparability
of the data, and a representation as to the reason recasting has not
been undertaken.
(f) Every successor issuer that has a different fiscal year from
that of its predecessor(s) shall file a transition report pursuant to
this section, containing the required information about each
predecessor, for the transition period, if any, between the close of
the fiscal year covered by the last annual report of each predecessor
and the date of succession. The report shall be filed for the
transition period on the form appropriate for annual reports of the
issuer not more than the number of days specified in paragraph (j) of
this section after the date of the succession, with financial
statements in conformity with the requirements set forth in paragraph
(b) of this section. If the transition period covers a period of less
than six months, in lieu of a transition report on the form appropriate
for the issuer's annual reports, the report may be filed for the
transition period on Form 10-Q not more than the number of days
specified in paragraph (j) of this section after the date of the
succession, with financial statements in conformity with the
requirements set forth in paragraph (c) of this section.
Notwithstanding the foregoing, if the transition period covers a period
of one month or less, the successor issuer need not file a separate
transition report if the information is reported by the successor
issuer in conformity with the requirements set forth in paragraph (d)
of this section.
* * * * *
(j) * * *
(2) For transition reports to be filed on Form 10-Q (Sec. 249.308
of this chapter), the number of days shall be:
* * * * *
0
77. Amend Sec. 240.15d-13 by revising the section heading, paragraph
(a), the introductory text of (c), and paragraphs (d) and (e) to read
as follows:
Sec. 240.15d-13 Quarterly reports on Form 10-Q (Sec. 249.308 of this
chapter).
(a) Except as provided in paragraphs (b) and (c) of this section,
every issuer that has securities registered pursuant to the Securities
Act and is required to file annual reports pursuant to section 15(d) of
the Act on Form 10-K (Sec. 249.310 of this chapter) shall file a
quarterly report on Form 10-Q (Sec. 249.308 of this chapter) within
the period specified in General Instruction A.1 to that form for each
of the first three quarters of each fiscal year of the issuer,
commencing
[[Page 979]]
with the first fiscal quarter following the most recent fiscal year for
which full financial statements were included in the registration
statement, or, if the registration statement included financial
statements for an interim period after the most recent fiscal year end
meeting the requirements of Article 10 of Regulation S-X, or Rule 8-03
of Regulation S-X for smaller reporting companies, for the first fiscal
quarter after the quarter reported upon in the registration statement.
The first quarterly report of the issuer shall be filed either within
45 days after the effective date of the registration statement or on or
before the date on which such report would have been required to be
filed if the issuer had been required to file reports on Form 10-Q as
of its last fiscal quarter, whichever is later.
* * * * *
(c) Part I of the quarterly reports on Form 10-Q need not be filed
by:
* * * * *
(d) Notwithstanding the foregoing provisions of this section, the
financial information required by Part I of Form 10-Q shall not be
deemed to be ``filed'' for the purpose of section 18 of the Act or
otherwise subject to the liabilities of that section of the Act, but
shall be subject to all other provisions of the Act.
(e) Notwithstanding the foregoing provisions of this section, the
financial information required by Part I of Form 10-Q, or financial
information submitted in lieu thereof pursuant to paragraph (d) of this
section, shall not be deemed to be ``filed'' for the purpose of section
18 of the Act or otherwise subject to the liabilities of that section
of the Act, but shall be subject to all other provisions of the Act.
0
78. Amend Sec. 240.15d-14 by revising paragraph (a) to read as
follows:
Sec. 240.15d-14 Certification of disclosure in annual and quarterly
reports.
(a) Each report, including transition reports, filed on Form 10-Q,
Form 10-K, Form 20-F or Form 40-F (Sec. 249.308a, 249.310, 249.220f or
249.240f of this chapter) under section 15(d) of the Act (15 U.S.C.
78o(d)), other than a report filed by an Asset-Backed Issuer (as
defined in Sec. 229.1101 of this chapter) or a report on Form 20-F
filed under Sec. 240.15d-19, must include certifications in the form
specified in the applicable exhibit filing requirements of such report,
and such certifications must be filed as an exhibit to such report.
Each principal executive and principal financial officer of the issuer,
or persons performing similar functions, at the time of filing of the
report must sign a certification. The principal executive and principal
financial officers of an issuer may omit the portion of the
introductory language in paragraph 4 as well as language in paragraph
4(b) of the certification that refers to the certifying officers'
responsibility for designing, establishing and maintaining internal
control over financial reporting for the issuer until the issuer
becomes subject to the internal control over financial reporting
requirements in Sec. 240.13a-15 or 240.15d-15.
* * * * *
0
79. Amend Sec. 240.15d-20 by revising the introductory text of
paragraph (a) to read as follows:
Sec. 240.15d-20 Plain English presentation of specified information.
(a) Any information included or incorporated by reference in a
report filed under section 15(d) of the Act (15 U.S.C. 78o(d)) that is
required to be disclosed pursuant to Item 402, 403, 404 or 407 of
Regulation S-K (Sec. 229.402, 229.403, 229.404 or 229.407 of this
chapter) must be presented in a clear, concise and understandable
manner. You must prepare the disclosure using the following standards:
* * * * *
0
80. Amend Sec. 240.15d-21 by revising paragraph (a)(1) to read as
follows:
Sec. 240.15d-21 Reports for employee stock purchase, savings and
similar plans.
(a) * * *
(1) The issuer of the stock or other securities offered to
employees through their participation in the plan files annual reports
on Form 10-K (Sec. 249.310 of this chapter); and
* * * * *
PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934
0
81. The authority citations for part 249 continues to read in part as
follows:
Authority: 15 U.S.C. 78a et seq., 7202, 7233, 7241, 7262, 7264,
and 7265; and 18 U.S.C. 1350, unless otherwise noted.
* * * * *
0
82. Amend Sec. 249.0-1 by revising paragraph (b) to read as follows:
Sec. 249.0-1 Availability of forms.
* * * * *
(b) Any person may obtain a copy of any form prescribed for use in
this part by written request to the Securities and Exchange Commission,
100 F Street, NE, Washington, DC 20549. Any person may inspect the
forms at this address and at the Commission's regional offices. (See
Sec. 200.11 of this chapter for the addresses of SEC regional
offices).
0
83. Amend Form 8-A (referenced in Sec. 249.208a) by revising Item 1
before the Instruction to read as follows:
Note: The text of Form 8-A does not and this amendment will not
appear in the Code of Federal Regulations.
FORM 8-A--FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO
SECTION 12(b) OR (g) OF THE SECURITIES ACT OF 1934
* * * * *
Item 1. Description of Registrant's Securities to be Registered
Furnish the information required by Item 202 of Regulation S-K
(Sec. 229.202 of this chapter), as applicable.
* * * * *
0
84. Amend Form 10 (referenced in Sec. 249.210) by:
0
a. Adding check boxes to the cover page, above the Information
Requested in Registration Statement, requesting the registrant indicate
by check mark whether it is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company;
0
b. Revising Item 1A; and
0
c. Revising Item 13.
The addition and revision read as follows:
Note: The text of Form 10 does not and this amendment will not
appear in the Code of Federal Regulations.
FORM 10--GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
Item 1A. Risk Factors
Set forth, under the caption ``Risk Factors,'' where
appropriate, the risk factors described in Item 503(c) of Regulation
S-K (Sec. 229.503(c) of this chapter) applicable to the registrant.
Provide any discussion of risk factors in plain English in
accordance with Rule 421(d) of the Securities Act of 1933 (Sec.
230.421(d) of this chapter). Smaller reporting companies are not
required to provide the information required by this item.
* * * * *
[[Page 980]]
Item 13. Financial Statements and Supplementary Data
Furnish all financial statements required by Regulation S-X and
supplementary financial information required by Item 302 of
Regulation S-K (Sec. 229.302 of this chapter). Smaller reporting
companies may provide the financial information required by Article
8 of Regulation S-X in lieu of the information required by in other
parts of Regulation S-X.
* * * * *
Sec. 249.210b [Removed]
0
85. By removing and reserving Sec. 249.210b and removing Form 10-SB.
Note: The text of Form 10-SB does not appear in the Code of
Federal Regulations.
0
86. Amend Form 20-F (referenced in Sec. 249.220f) by adding
instruction (f) to the General Instructions B to read as follows:
Note: The text of Form 20-F does not and this amendment will not
appear in the Code of Federal Regulations.
FORM 20-F
* * * * *
GENERAL INSTRUCTIONS
* * * * *
B. General Rules and Regulation That Apply to this Form
* * * * *
(f) A foreign private issuer that is a smaller reporting
company, as defined in Rule 12b-2 under the Exchange Act (17 CFR
240.12b-2), may not use the scaled disclosure requirements in
Regulation S-X and Regulation S-K available to smaller reporting
companies for the purposes of preparing this form.
* * * * *
0
87. Amend Form 8-K (referenced in Sec. 249.308) by revising General
Instruction B.4.; removing General Instruction C.3; revising Item 2.01
paragraph (f) before the Instructions; Instructions 2 and 4 to Item
2.02; Item 2.03 paragraph (d); Item 3.02 paragraphs (a) and (b) before
the Instructions and Instruction 2; Item 4.01 paragraphs (a) and (b)
before the Instructions; Item 4.02 the introductory text of paragraph
(a); Item 5.01 paragraphs (a)(8) and (b); Item 5.02 paragraphs (c)(2),
(d)(4), (f), and Instruction 4; in Item 5.03 paragraph (b), revise the
phrase ``Form 10-K, Form 10-KSB, Form 10-Q or Form 10-QSB'' to read
``Form 10-K or Form 10-Q'', and revise Instruction 1; Item 5.05
paragraph (a); and Item 9.01 paragraphs (a)(1), (a)(3), (b)(1) and (d)
before the Instruction
The revisions read as follows:
FORM 8-K--CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
* * * * *
GENERAL INSTRUCTIONS
* * * * *
B. Events to be Reported and Time for Filing of Reports
* * * * *
4. Copies of agreements, amendments or other documents or
instruments required to be filed pursuant to Form 8-K are not
required to be filed or furnished as exhibits to the Form 8-K unless
specifically required to be filed or furnished by the applicable
Item. This instruction does not affect the requirement to otherwise
file such agreements, amendments or other documents or instruments,
including as exhibits to registration statements and periodic
reports pursuant to the requirements of Item 601 of Regulation S-K.
* * * * *
Item 2.01 Completion of Acquisition or Disposition of Assets
* * * * *
(f) If the registrant was a shell company, other than a business
combination related shell company, as those terms are defined in
Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2), immediately
before the transaction, the information that would be required if
the registrant were filing a general form for registration of
securities on Form 10 under the Exchange Act reflecting all classes
of the registrant's securities subject to the reporting requirements
of Section 13 (15 U.S.C. 78m) or Section 15(d) (15 U.S.C. 78o(d)) of
such Act upon consummation of the transaction, with such information
reflecting the registrant and its securities upon consummation of
the transaction. Notwithstanding General Instruction B.3 to Form 8-
K, if any disclosure required by this Item 2.01(f) is previously
reported, as that term is defined in Rule 12b-2 under the Exchange
Act (17 CFR 240.12b-2), the registrant may identify the filing in
which that disclosure is included instead of including that
disclosure in this report.
* * * * *
Item 2.02 Results of Operations and Financial Condition
* * * * *
Instructions.
* * * * *
2. The requirements of paragraph (e)(1)(i) of Item 10 of
Regulation S-K (17 CFR 229.10(e)(1)(i)) shall apply to disclosures
under this Item 2.02.
* * * * *
4. This Item 2.02 does not apply in the case of a disclosure
that is made in a quarterly report filed with the Commission on Form
10-Q (17 CFR 249.308a) or an annual report filed with the Commission
on Form 10-K (17 CFR 249.310).
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
* * * * *
(d) For purposes of this Item 2.03, off-balance sheet
arrangement has the meaning set forth in Item 303(a)(4)(ii) of
Regulation S-K (17 CFR 229.303(a)(4)(ii)).
* * * * *
Item 3.02 Unregistered Sales of Equity Securities
(a) If a registrant sells equity securities in a transaction
that is not registered under the Securities Act, furnish the
information set forth in paragraphs (a) and (c) through (e) of Item
701 of Regulation S-K (17 CFR 229.701(a) and (c) through (e)). For
purposes of determining the required filing date for the Form 8-K
under this Item 3.02(a), the registrant has no obligation to
disclose information under this Item 3.02 until the registrant
enters into an agreement enforceable against the registrant, whether
or not subject to conditions, under which the equity securities are
to be sold. If there is no such agreement, the registrant must
provide the disclosure within four business days after the
occurrence of the closing or settlement of the transaction or
arrangement under which the equity securities are to be sold.
(b) No report need be filed under this Item 3.02 if the equity
securities sold, in the aggregate since its last report filed under
this Item 3.02 or its last periodic report, whichever is more
recent, constitute less than 1% of the number of shares outstanding
of the class of equity securities sold. In the case of a smaller
reporting company, no report need be filed if the equity securities
sold, in the aggregate since its last report filed under this Item
3.02 or its last periodic report, whichever is more recent,
constitute less than 5% of the number of shares outstanding of the
class of equity securities sold.
Instructions.
* * * * *
2. A smaller reporting company is defined in Item 10(f)(1) of
Regulation S-K (17 CFR 229.10(f)(1)).
* * * * *
Item 4.01 Changes in Registrant's Certifying Accountant
(a) If an independent accountant who was previously engaged as
the principal accountant to audit the registrant's financial
statements, or an independent accountant upon whom the principal
accountant expressed reliance in its report regarding a significant
subsidiary, resigns (or indicates that it declines to stand for re-
appointment after completion of the current audit) or is dismissed,
disclose the information required by Item 304(a)(1) of Regulation S-
K (Sec. 229.304(a)(1) of this chapter), including compliance with
Item 304(a)(3) of Regulation S-K (Sec. 229.304(a)(3) of this
chapter).
(b) If a new independent accountant has been engaged as either
the principal accountant to audit the registrant's financial
statements or as an independent accountant on whom the principal
accountant is expected to express reliance in its report regarding a
significant subsidiary, the registrant must disclose the information
required by Item 304(a)(2) of Regulation S-K (17 CFR 229.302(a)(2)).
* * * * *
[[Page 981]]
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review
(a) If the registrant's board of directors, a committee of the
board of directors or the officer or officers of the registrant
authorized to take such action if board action is not required,
concludes that any previously issued financial statements, covering
one or more years or interim periods for which the registrant is
required to provide financial statements under Regulation S-X (17
CFR 210) should no longer be relied upon because of an error in such
financial statements as addressed in Accounting Principles Board
Opinion No. 20, as may be modified, supplemented or succeeded,
disclose the following information:
* * * * *
Item 5.01 Changes in Control of the Registrant
(a) * * *
(8) if the registrant was a shell company, other than a business
combination related shell company, as those terms are defined in
Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2), immediately
before the change in control, the information that would be required
if the registrant were filing a general form for registration of
securities on Form 10 under the Exchange Act reflecting all classes
of the registrant's securities subject to the reporting requirements
of Section 13 (15 U.S.C. 78m) or Section 15(d) (15 U.S.C. 78o(d)) of
such Act upon consummation of the change in control, with such
information reflecting the registrant and its securities upon
consummation of the transaction. Notwithstanding General Instruction
B.3. to Form 8-K, if any disclosure required by this Item 5.01(a)(8)
is previously reported, as that term is defined in Rule 12b-2 under
the Exchange Act (17 CFR 240.12b-2), the registrant may identify the
filing in which that disclosure is included instead of including
that disclosure in this report.
(b) Furnish the information required by Item 403(c) of
Regulation S-K (17 CFR 229.403(c)).
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers
* * * * *
(c) * * *
(2) the information required by Items 401(b), (d), (e) and Item
404(a) of Regulation S-K (17 CFR 229.401(b), (d), (e) and
229.404(a); and
* * * * *
(d) * * *
(4) the information required by Item 404(a) of Regulation S-K
(17 CFR 229.404(a)).
* * * * *
(f) If the salary or bonus of a named executive officer cannot
be calculated as of the most recent practicable date and is omitted
from the Summary Compensation Table as specified in Instruction 1 to
Item 402(c)(2)(iii) and (iv) of Regulation S-K, disclose the
appropriate information under this Item 5.02(f) when there is a
payment, grant, award, decision or other occurrence as a result of
which such amounts become calculable in whole or in part. Disclosure
under this Item 5.02(f) shall include a new total compensation
figure for the named executive officer, using the new salary or
bonus information to recalculate the information that was previously
provided with respect to the named executive officer in the
registrant's Summary Compensation Table for which the salary and
bonus information was omitted in reliance on Instruction 1 to Item
402(c)(2)(iii) and (iv) of Regulation S-K (17 CFR 229.402(c)(2)(iii)
and (iv)).
Instructions to Item 5.02
* * * * *
(4) For purposes of this Item, the term ``named executive
officer'' shall refer to those executive officers for whom
disclosure was required in the registrant's most recent filing with
the Commission under the Securities Act (15 U.S.C. 77a et seq.) or
Exchange Act (15 U.S.C. 78a et seq.) that required disclosure
pursuant to Item 402(c) of Regulation S-K (17 CFR 229.402(c)).
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year
* * * * *
Instructions to Item 5.03
1. Refer to Item 601(b)(3) of Regulation S-K (17 CFR
229.601(b)(3)) regarding the filing of exhibits to this Item 5.03.
* * * * *
Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a
Provision of the Code of Ethics
(a) Briefly describe the date and nature of any amendment to a
provision of the registrant's code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller or persons
performing similar functions and that relates to any element of the
code of ethics definition enumerated in Item 406(b) of Regulation S-
K (17 CFR 229.406(b)).
* * * * *
Item 9.01 Financial Statements and Exhibits
* * * * *
(a) * * *
(1) For any business acquisition required to be described in
answer to Item 2.01 of this form, financial statements of the
business acquired shall be filed for the periods specified in Rule
3-05(b) of Regulation S-X (17 CFR 210.3-05(b)) or Rule 8-04(b) of
Regulation S-X (17 CFR 210.8-04(b)) for smaller reporting companies.
* * * * *
(2) * * *
(3) With regard to the acquisition of one or more real estate
properties, the financial statements and any additional information
specified by Rules 3-14 (17 CFR 210.3-14) or Rule 8-06 of Regulation
S-X ( 17 CFR 210.8-06) for smaller reporting companies.
(b) * * *
(1) For any transaction required to be described in answer to
Item 2.01 of this form, furnish any pro forma financial information
that would be required pursuant to Article 11 of Regulation S-X
(Sec. 210.11 of this chapter) or Rule 8-05 of Regulation S-X (Sec.
210.8-05 of this chapter) for smaller reporting companies.
* * * * *
(d) Exhibits. The exhibits will be deemed to be filed or
furnished, depending upon the relevant item requiring such exhibit,
in accordance with the provisions of Item 601 of Regulation S-K (17
CFR 229.601) and Instruction B.2 of this form.
* * * * *
88. Amend Form 10-Q (referenced in Sec. 249.308a) by:
0
a. Revising the cover page of Form 10-Q to add, above Part I Financial
Information, check boxes requesting the registrant to indicate whether
it is a large accelerated filer, an accelerated filer, a non-
accelerated filer, or a smaller reporting company;
0
b. In Part I, revising the text of Item 1; and
0
c. In Part II, revising the text of Item 1A.
The revisions and addition read as follows:
Note: The text of Form 10-Q does not and this amendment will not
appear in the Code of Federal Regulations.
FORM 10-Q
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
Part I--Financial Information
Item 1. Financial Statements
Provide the information required by Rule 10-01 of Regulation S-X
(17 CFR 210). A smaller reporting company, defined in Rule 12b-2
(Sec. 240.12b-2 of this chapter) may provide the information
required by Article 8-03 of Regulation S-X (Sec. 210.8-03 of this
chapter).
* * * * *
Part II--Other Information
* * * * *
Item 1A. Risk Factors
Set forth any material changes from risk factors as previously
disclosed in the registrant's Form 10-K (Sec. 249.310) in response
to Item 1A to Part 1 of Form 10-K. Smaller reporting companies are
not required to provide the information required by this item.
Sec. 249.308b [Removed]
0
89. By removing and reserving Sec. 249.308b and removing Form 10-QSB.
[[Page 982]]
Note: The text of Form 10-QSB does not appear in the Code of
Federal Regulations.
0
90. Amend Form 10-K (referenced in Sec. 249.310) by:
0
a. Revising the cover page of Form 10-K to add, above the line asking
the registrant to indicate whether it is a shell company, check boxes
requesting the registrant to indicate whether it is a large accelerated
filer, or an accelerated filer; a non-accelerated filer, or a smaller
reporting company;
0
b. Revising Item 1A; and
0
c. Revising Item 5 paragraph (a), Item 8 and Item 14 paragraph (1).
The additions and revisions read as follows:
Note: The text of Form 10-K does not and this amendment will not
appear in the Code of Federal Regulations.
Form 10-K--Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Form 10-K
* * * * *
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of ``large
accelerated filer,'' ``accelerated filer'' and ``smaller reporting
company'' in Rule 12b-2 of the Exchange Act. (Check one):
[ballot] Large accelerated filer
[ballot] Non-accelerated filer
[ballot] Accelerated filer
[ballot] Smaller reporting company
(Do not check if a smaller reporting company)
* * * * *
Item 1A. Risk Factors
Set forth, under the caption ``Risk Factors,'' where
appropriate, the risk factors described in Item 503(c) of Regulation
S-K (Sec. 229.503(c) of this chapter) applicable to the registrant.
Provide any discussion of risk factors in plain English in
accordance with Rule 421(d) of the Securities Act of 1933 (Sec.
230.421(d) of this chapter). Smaller reporting companies are not
required to provide the information required by this item.
* * * * *
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
(a) Furnish the information required by Item 201 of Regulation
S-K (17 CFR 229.201) and Item 701 of Regulation S-K (17 CFR 229.701)
as to all equity securities of the registrant sold by the registrant
during the period covered by the report that were not registered
under the Securities Act. If the Item 701 information previously has
been included in a Quarterly Report on Form 10-Q (17 CFR 249.308a)
or in a Current Report on Form 8-K (17 CFR 249.308), it need not be
furnished.
* * * * *
Item 8. Financial Statements and Supplementary Data
(a) Furnish financial statements meeting the requirements of
Regulation S-X (Sec. 210 of this chapter), except Sec. 210.3-05
and Article 11 thereof, and the supplementary financial information
required by Item 302 of Regulation S-K (Sec. 229.302 of this
chapter). Financial statements of the registrant and its
subsidiaries consolidated (as required by Rule 14a-3(b)) shall be
filed under this item. Other financial statements and schedules
required under Regulation S-X may be filed as ``Financial Statement
Schedules'' pursuant to Item 15, Exhibits, Financial Statement
Schedules, and Reports on Form 8-K, of this Form.
(b) A smaller reporting company may provide the information
required by Article 8 of Regulation S-X in lieu of any financial
statements required by Item 8 of this Form.
* * * * *
Item 14. Principal Accounting Fees and Services
* * * * *
(1) Disclose, under the caption Audit Fees, the aggregate fees
billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the
registrant's annual financial statements and review of financial
statements included in the registrant's Form 10-Q (17 CFR 249.308a)
or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for
those fiscal years.
* * * * *
Sec. 249.310b [Removed]
0
91. By removing and reserving Sec. 249.310b and removing Form 10-KSB.
Note: The text of Form 10-KSB does not appear in the Code of
Federal Regulations.
0
92. Amend Form 11-K (referenced in Sec. 249.311) by removing General
Instruction E(b) and redesignating the text of General Instruction E(a)
as General Instruction E.
0
93. Amend Form SE (referenced in Sec. 249.444) by revising General
Instruction 3.C to read as follows:
* * * * *
Form SE--Form for Submission of Paper Format Exhibits by Edgar
Electronic Filers
* * * * *
Form SE General Instructions
* * * * *
3. Filing of Form SE
* * * * *
C. Identify the exhibit being filed. Attach to the Form SE the
paper format exhibit and an exhibit index if required by Item 601 of
Regulation S-K (Sec. 229.601 of this chapter).
* * * * *
PART 260--GENERAL RULE AND REGULATIONS, TRUST INDENTURE ACT OF 1939
0
94. The authority citation for part 260 continues to read as follows:
Authority: 15 U.S.C. 77eee, 77ggg, 77nnn, 77sss, 78ll(d), 80b-3,
80b-4, and 80b-11.
0
95. Amend Sec. 260.0-11 by revising the introductory text of paragraph
(b)(1), paragraphs (b)(1)(i) and (b)(2) to read as follows:
Sec. 260.0-11 Liability for certain statements by issuers.
* * * * *
(b) * * *
(1) A forward-looking statement (as defined in paragraph (c) of
this section) made in a document filed with the Commission, in Part I
of a quarterly report on Form 10-Q, Sec. 249.308a of this chapter, or
in an annual report to security holders meeting the requirements of
Rules 14a-3(b) and (c) or 14c-3(a) and (b) under the Securities
Exchange Act of 1934 (Sec. 240.14a-3(b) and (c) or Sec. 240.14c-3(a)
and (b) of this chapter), a statement reaffirming such forward-looking
statement after the date the document was filed or the annual report
was made publicly available, or a forward-looking statement made before
the date the document was filed or the date the annual report was made
publicly available if such statement is reaffirmed in a filed document,
in Part I of a quarterly report on Form 10-Q, or in an annual report
made publicly available within a reasonable time after the making of
such forward-looking statement; Provided, that:
(i) At the time such statements are made or reaffirmed, either the
issuer is subject to the reporting requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934 and has complied with the
requirements of Rule 13a-1 or 15d-1 (Sec. 240.13a-1 or Sec. 240.15d-1
of this chapter) thereunder, if applicable, to file its most recent
annual report on Form 10-K, Form 20-F, or Form 40-F; or if the issuer
is not subject to the reporting requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934, the statements are made in a
registration statement filed under the Securities Act of 1933 or
pursuant to section 12(b) or (g) of the Securities Exchange Act of
1934; and
* * * * *
(2) Information relating to the effects of changing prices on the
business enterprise presented voluntarily or pursuant to Item 303 of
Regulation S-K (Sec. 229.303 of this chapter), Item 5 of Form 20-F
(Sec. 249.220f of this chapter), ``Operating and Financial Review and
[[Page 983]]
Prospects,'' Item 302 of Regulation S-K (Sec. 229.302 of this
chapter), ``Supplementary Financial Information,'' or Rule 3-20(c) of
Regulation S-X (Sec. 210.3-20(c) of this chapter), and disclosed in a
document filed with the Commission, in Part I of a quarterly report on
Form 10-Q, or in an annual report to shareholders meeting the
requirements of Rules 14a-3(b) and (c) or 14c-3(a) and (b) (Sec.
240.14a-3(b) and (c) or Sec. 240.14c-3(a) and (b)) under the
Securities Exchange Act of 1934.
* * * * *
0
96. Amend Sec. 260.4d-9 by revising the introductory text to read as
follows:
Sec. 260.4d-9 Exemption for Canadian Trust Indentures from Specified
Provisions of the Act.
Any trust indenture filed in connection with offerings on a
registration statement on Form S-1, (Sec. 239.1 of this chapter) F-7,
F-8, F-9, F-10 or F-80 (Sec. Sec. 239.37 through 239.41 of this
chapter) shall be exempt from the operation of sections 310(a)(3) and
310(a)(4), sections 310(b) through 316(a), and sections 316(c) through
318(a) of the Act; provided that the trust indenture is subject to:
* * * * *
0
97. Amend Sec. 260.10a-5 by revising paragraph (a) to read as follows:
Sec. 260.10a-5 Eligibility of Canadian Trustees.
(a) Subject to paragraph (b) of this section, any trust company,
acting as trustee under an indenture qualified or to be qualified under
the Act and filed in connection with offerings on a registration
statement on Form S-1 (Sec. 239.11 of this chapter) F-7, F-8, F-9, F-
10 or F-80 (Sec. Sec. 239.37 through 239.41 of this chapter) that is
incorporated and regulated as a trust company under the laws of Canada
or any of its political subdivisions and that is subject to supervision
or examination pursuant to the Trust Companies Act (Canada), R.S.C.
1985, or the Canada Deposit Insurance Corporation Act, R.S.C. 1985
shall not be subject to the requirement of domicile in the United
States under section 310(a) of the Act (15 U.S.C. 77jjj(a)).
* * * * *
PART 269--FORMS PRESCRIBED UNDER THE TRUST INDENTURE ACT OF 1939
0
98. The authority citation for part 269 is revised to read as follows:
Authority: 15 U.S.C. 77ddd(c), 77eee, 77ggg, 77hhh, 77iii,
77jjj, 77sss, and 78ll(d), unless otherwise noted.
0
99. Amend Sec. 260.01 by revising paragraph (b) to read as follows:
Sec. 269.0-1 Availability of forms.
* * * * *
(b) Any person may obtain a copy of any form prescribed for use in
this part by written request to the Securities and Exchange Commission,
100 F Street, NE., Washington, DC 20549. Any person may inspect the
forms at this address and at the Commission's regional offices. (See
Sec. 200.11 of this chapter for the addresses of SEC regional
offices.)
By the Commission.
Dated: December 19, 2007.
Nancy M. Morris,
Secretary.
[FR Doc. E7-24965 Filed 1-3-08; 8:45 am]
BILLING CODE 8011-01-P