Raadr Inc (RDAR)

[trader53]

RDAR - Shareholders Benefit from 12g-4 Filing


"Going Dark" - The Simple Path to Exiting the U.S. Public Company Reporting System - Delisting and Deregistration under the U.S. Securities Exchange Act of 1934 Update

Board Considerations

In order to cease its Exchange Act reporting obligations,
a company’s board of directors would generally need to conclude, in the exercise of its fiduciary obligations under the law of its jurisdiction of organization, that such termination would be in the best interests of the company and its shareholders. If the issuer is incorporated in Delaware, the business judgment rule would apply to this decision unless a board member had a particular conflict of interest or an affiliate transaction were involved with the decision (such as a purchase of minority shareholder interests) that might make a higher standard of review applicable. If there is an interested director transaction or other special circumstances affecting the independence of board members, a special committee of independent directors is sometimes appointed to consider the question of deregistration and its fairness to, and effects upon, unaffiliated shareholders. In any case, it is critical for the company and its counsel to review all outstanding debt agreement, investor agreements, registration rights agreements, preferred stock and warrant agreements and other material contracts to make sure that going dark or going private will not violate those agreements.

The decision to deregister involves balancing the costs and benefits of going dark to the company and its shareholders.
The benefits to the company of terminating its reporting obligations would normally include significantly lower accounting, legal, insurance and compliance costs related to Exchange Act and Sarbanes-Oxley requirements and public disclosure obligations. The company should make an effort to estimate and document these savings. The company would normally also benefit through the reduced public scrutiny and disclosure requirements following deregistration and the time saved and the reduction of burdens and distractions on its management and staff.

A “dark” period could, if needed, also give a troubled company an opportunity to develop a revised operating plan or a new financing plan to reinvigorate its business without the distractions and costs of being a public company. The company could also benefit from lower ongoing securities law liability risks, although Rule 10b-5 and other Federal and State antifraud statues would still be applicable to U.S. domestic transactions in its shares.

Negative effects of a “going dark” decision, on the other hand, would include reduced visibility of the company to its public shareholders after it ceases public reporting. However, if the market for a company’s stock is already relatively illiquid and is trading at a low price per share, public shareholders may not be greatly injured or even surprised by a decision to deregister. Following filing of a Form 15, shares would typically trade in the over-the-counter market operated by OTC Markets Group, Inc. known as the “Pink OTC Market” and would have the abbreviation “PK” added to the trading symbol.

In computing the number of record holders for purposes of Rule 12g5-1, an issuer need not look through the holdings of brokers, dealers, banks or other nominees to count the beneficial owners of its common shares. As a result, the company may have many hundreds of beneficial owners of its common stock while still having less than 300 holders of record for purposes of Rule 12g5-1.13

To determine whether the company has less than 300 holders of record, the company should obtain a shareholder list (including for employees who hold shares or others who directly own share certificates, other than any employees who acquired shares privately in exempt transactions, as such holders need not be counted) as of the beginning of the company’s most recent fiscal year and as of a subsequent date (nearer the date on which it intends to file a Form 15) as well as DTC security position listings dated the same dates in order to count the total number of record holders shown in the manner required by Rule 12g5-1.

The impact of any decision to deregister on a company’s minority shareholders must be carefully considered by the Board of Directors and/or a special committee. Public shareholders often view deregistration in a negative manner due to diminished available information about the company and the resulting potentially adverse impact on liquidity in the trading for the shares. However, the market for the company’s common stock is often already extremely illiquid when a company is considering whether to “go dark”.

A board of directors may also wish to consider whether it may be possible to mitigate the effect on the company’s public shareholders of the deregistration process by having the board of directors establish a policy of continuing to regularly report unaudited earnings information (and perhaps annual audited information) in a manner similar to the company’s past reporting practices for some further period. If desired this would help provide some additional liquidity to the company’s shareholders while saving the expense of complying with full SEC, Sarbanes-Oxley governance requirements.

The company may also wish to consider providing an alternative market such as the Hong Kong stock exchange for its shareholders. Providing an alternative listing or relisting in connection with a U.S. reporting system exit can be a time consuming and expensive process (particularly where an overseas corporate structure may need to be unwound), but provides a more attractive result for public shareholders. If a company which is a foreign private issuer is already listed outside the United States and the non-U.S. market is its primary trading market, the company may also wish to consider its eligibility to use Exchange Act Rule 12h-6 which can provide some dual listed foreign private issuers with an ability to exit the U.S. reporting system where a substantial majority of the company’s trading volume is outside the United States and various other technical requirements are met.14


https://www.dorsey.com/newsresources/publications/2013/01/going-dark--the-simple-path-to-exiting-the-us-pu__


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RDAR - Charts / News / Targets
Targets 0.0018 / 0.004 / $0.01 / $0.02
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RDAR On FAST-TRACK to OTCQB with 12g-4 Filing
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RDAR - Jump-starting to OTCQB $0.01
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12g-4 Certifications of termination
of registration under section 12(g)

http://www.ecfr.gov/cgi-bin/text-idx?SID=4d94796b6f35c434c82c856b6c0fa9ec&mc=true&node=pt17.4.240&rgn=div5#se17.4.240_112g_64

Termination of Registration of a Class of Security
Under Section 12(g) (15-12g)

February 27, 2017
FORM 15
Rule 12g-4

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11887721

http://www.otcmarkets.com/stock/RDAR/filings
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