Megas World

[mastaflash]

At the time of the revocation, BCIT was eligible for exemption from reporting requirements as they had less than 500 shareholders, and in any case, less than $10M in assets. BCIT did file a form 15 for this purpose prior to revocation. This never showed up on Edgar, which it should, whether it is accepted or not. SEC claims they 'lost' it. Example Fortel ( Envit Capital ) filed in 2008:

http://www.sec.gov/Archives/edgar/data/731647/000121390008001211/f1512g_ea2fortel.htm

Note it states 656 shareholders. Fortel was susequently revoked for failing to report, and the 15-12g was rejected on the grounds 'too many shareholders'....i.e. more than 500.

In its Answer, Respondent moved for a more definite statement with respect to the allegation in
the OIP that a Form 15-12G it filed with the Commission was ineffective. In a June 5, 2009,
telephonic prehearing conference, the motion was rendered moot as Respondent understood that
the alleged defect in the filing was that the company had too many shareholders.

http://www.sec.gov/litigation/aljdec/2009/id385rgm.pdf

Now it is my understanding that if total assets of the company was less than $10M, a company can still be exempt, even if more than 500 shs. Fortel never had more than $1m in assets. So what is going on here?

SEA 1934 12(g)(1) Every issuer which is engaged in interstate commerce, or
in a business affecting interstate commerce, or whose securities are
traded by use of the mails or any means or instrumentality of
interstate commerce shall—
(A) within 120 days after the last day of its first fiscal year
ended on which the issuer has total assets exceeding
$10,000,000 and a class of equity security (other than an exempted security) held of record by either—
(i)
[37] 2,000 persons, or
(ii)
[37] 500 persons who are not accredited investors

http://www.sec.gov/about/laws/sea34.pdf

Well, I believe I now understand that the point at which registration is required, is not the same as the threshold to de-register.

(4) Registration of any class of security pursuant to this sub-
section shall be terminated ninety days, or such shorter period as
the Commission may determine, after the issuer files a certification
with the Commission that the number of holders of record of such
class of security is reduced to less than 300 persons, or, in the case
of a bank or a bank holding company, as such term is defined in
section 2 of the Bank Holding Company Act of 1956 (12 U.S.C.
1841), 1,200 persons persons.
[39] The Commission shall after notice
and opportunity for hearing deny termination of registration if it
finds that the certification is untrue. Termination of registration
shall be deferred pending final determination on the question of denial.


I could not understand why pink companies with more than 500 shareholders are not required to be registered and fully reporting, while reporting companies with more than 500 are revoked...regardless of their net worth. It should also be pointed out that failure to report can get you revoked even if you have less than 500 shs but fail to file and exemption request ( form 15-12g ).