February 15, 2008

Head’s Up: How Your Form 10-K Changes This Year

As a result of amendments to the disclosure rules for “smaller reporting companies” adopted in December and effective last week – February 4th – there are changes to Form 10-K that all reporting companies need to make in their Form 10-K reports. For companies that are not eligible (and do not elect) to report under the new “smaller reporting company” framework, these changes are minor – essentially amounting to changes in the check boxes relating to the company’s status on the cover page of Form 10-K.

Courtesy of John Newell of Goodwin Procter, we have posted “Comparison of Changes to Form 10-K,” which is a redline comparison of the newly-effective cover page of Form 10-K compared to the old version (this is a Word file and should help you tweak the Form you saved from last year; here is a PDF version if you need it).

On Monday, the SEC finally posted an updated Form 10-K – even though the new Form had been effective for a week – and as several members have e-mailed me, the SEC mistakenly reverted back to an old version of the Form for the Part III in its PDF…

More Glitches in Smaller Company Reporting

Recently, I blogged about a glitch in the SEC’s smaller company reporting scheme relating to audit committee reports – and there have been a few others identified in our “Q&A Forum.” Thanks to Steve Amen and Grant Leach of Kutak Rock, here is another:

“We’ve been working on a Form 10-Q for a company with a September 30th year end that qualifies as a “smaller reporting company.” As we looked at the SEC’s adopting release regarding changes to Form 10-Q resulting from the new smaller reporting company rules, we noticed that the familiar paragraph in which registrant’s indicate their filing status has been modified (as expected) to include the new option for “smaller reporting company”. However, in the adopting release, the whole thing looks like this:

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
– Large accelerated filer
– Accelerated filer
– Non-accelerated filer
– Smaller Reporting Company
(Do not check if a smaller reporting company)

We could not make any sense out the parenthetical language at the bottom and we finally decided to call the Corp Fin Staff for clarification. Turns out it’s a glitch and we were told we could delete it from the cover page.”

Let The Trades Begin: New Rule 144 Is Now Effective

Starting today, new Rule 144 is effective. The SEC has posted a copy of the new Form 144 in a PDF; we have a Word version available in our “Rule 144″ Practice Area.

As noted by Ron Orol in this The article, as much as $35 billion in restricted securities will suddenly be available to trade – so you can expect a sudden uptick in Rule 144 activity. So I posit this reminder: have you sent your memo to all our officers and directors explaining the new rule changes?

During our recent “Rule 144 Conference,” it was stressed that all companies need to get their officers and directors up to speed, particularly with the new potential pitfalls now facing affiliates. If you have not yet done so, we encourage you to furnish all your officers and directors with the model memorandum provided in the Conference “Course Materials.” It will get your key executives and directors updated on what they need to know now—and prevent costly violations.

By the way, I just posted a podcast with Ron Orol on regarding his new book: “Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking On The World.”

– Broc Romanek