I'm attorney Laura Anthony founding partner of Legal & Compliance, a full service corporate,
securities, and business transactions law firm.
Today is the continuation in a LawCast series talking about Form 8-K. Any company that is
subject to the reporting requirements of the Securities Exchange Act of 1934, must file
periodic reports on Form 8-K. I have been going through the events that trigger such
8-K filing requirement.
Section 3 of Form 8-K relates to Securities and Trading Markets.
Item 3.01 reports a Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; or a Transfer of Listing.
An example would be a notice of delinquency with the listing requirements of an exchange
such as the NASDAQ or NYSE MKT.
If such notice culminates in an actual delisting, another 8-K would need to be filed under this
item.
Likewise, a company’s decision to delist and move to the OTC Markets would be reportable
under Item 3.01.
Item 3.02 reports the Unregistered Sales of Equity Securities.
For a smaller reporting company, this Item requires that a company report the unregistered
sale of securities if the aggregate sales or issuances of securities constitutes five
percent or more of the outstanding securities since the last reported number filed with
the SEC.
For all other companies, the threshold is triggered at a one percent change.
I have discussed this Item in more detail earlier in this LawCast series related to
PIPE transactions involving convertible debt, preferred stock, options and warrants.
Item 3.03 reports Material Modifications to Rights of Securities Holders.
Examples would be amendments to preferred stock preferences or the issuances of senior
securities.
Section 4 reports Matters Related to Accountants and Financial Statements.
Item 4.01 reports Changes in the Company’s Certifying Accountant.
An 8-K filing under this Item will always be reviewed by the SEC and must meet the exact
particular disclosure requirements set forth in the Form 8-K. Item 4.02 reports a Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or Completed Interim
Review.
A filing on this Item is usually accompanied by or quickly followed by an amendment to
the subject report and financial statements.
Moreover, if the amended underlying report is not concurrently filed, an Item 4.02 filing
in essence reports that the company is delinquent in its filing requirements, as an unreliable
report is equivalent to no report.
An Item 4.02 filing is due within two days of receipt of an auditor’s restatement letter,
which is different from the usual four-day requirement.
I am securities attorney Laura Anthony, founding partner of Legal & Compliance, and producer
of LawCast.
Should you have any questions about today’s topic, please visit SecuritiesLawBlog.com
and LawCast.com, or contact me directly.
Inquiries of a technical nature are always encouraged.