TheCorporateCounsel.net

February 28, 2008

Samples: Converting a Form SB-2 to Form S-1

Bob Dow of Arnall Golden Gregory has been in the process of taking a Form SB-2 and amending it with a Form S-1, pursuant to the recent SEC rulemaking regarding smaller reporting companies (see these related memos). In that connection, he decided to try to find a few samples where other companies are doing the same – below are a few he found. He notes that some of them still have inconsistencies, such as references to the registration statement as SB-2 within the body (esp. under “Available Information,” “Legal Matters” and “Signatures”); the title of the document varies (“S-1/A” “SB-2/A on Form S-1″ etc.); and some have neglected to add the new filer status check boxes recently added to S-1. The samples include:

- Majic Wheels Corp.

- General Environmental Management

- Visual Management Systems

- Battery Control Corp.

- PerfectEnergy International Limited

- Monster Offers

- Patient Portal Technologies

CII Weighs In on Auditor Departures

In this podcast, Jeff Mahoney, General Counsel of the Council of Institutional Investors, discusses CII’s recent petition to the SEC for rulemaking regarding plain English disclosure of auditor departures, including:

- What is the current state of affairs with respect to disclosure of auditor departures?
- Why does CII believe that enhanced disclosure of auditor departures is necessary?
- Why do you think companies don’t provide better disclosure of this area given its importance?

The Nasdaq Proposes to List SPACs

Last week, the Nasdaq Stock Market issued this proposal to create new listing standards that will relate to special purpose acquisition companies. Previously, even if a SPAC met Nasdaq’s market and financial initial listing standards, Nasdaq would not list the SPAC. These determinations were based on concerns about the underwriters of some of the earlier deals and because a SPAC is a “shell company” that does not have current business operations.

Under the Nasdaq’s proposal, Nasdaq would seek to list SPACs (whose listings are dominated by AMEX, according to this WSJ article) – albeit under more stringent listing standards compared to operating companies, including the following criteria:

- Gross proceeds from the initial public offering (IPO) must be deposited in an escrow account maintained by an insured depository institution as defined by the Federal Deposit Insurance Act or in a separate bank account established by a registered broker or dealer.

- Within 36 months of the effectiveness of its IPO registration statement, the company must complete one or more business combinations using aggregate cash consideration equal to at least 80% of the value of the escrow account at the time of the initial combination.

- So long as the company is in the acquisition stage, each business combination must be approved both by the company’s shareholders and by a majority of the company’s independent directors. Following each business combination, the combined company must meet all of the requirements for initial listing.

- Broc Romanek