SunWorks Inc (SUNWQ)

[SandridgeEnergy]

You are wrong!

You are correct to say that a Form 5 is due 45 days after the fiscal year.

But, and this is the key part:

You are assuming that this type of transaction is exempt from Form 4, and is therefore being included on a Form 5.

Here is a list of the exemptions:

The SEC has adopted a variety of exemptions from the reporting requirements of Section 16(a) based upon the nature of the transaction. These exemptions apply to the following types of transactions:

Any increase or decrease in the number of equity securities held as a result of a stock split or a stock dividend applying equally to all securities of a class

The acquisition of rights, such as shareholder or preemptive rights, pursuant to a pro rata grant to all holders of the same class of registered equity securities

Transactions that effect only a change in the form of beneficial ownership without changing the person’s pecuniary interest in the subject equity securities (note, however, that this exemption does not cover the exercise and conversion of derivative securities or deposits to and withdrawals from voting trusts)

Certain transactions pursuant to tax-conditioned employee benefit plans
Acquisitions made pursuant to a dividend reinvestment plan, provided that the plan meets certain requirements specified in Rule 16a-11 under the Exchange Act

Acquisitions or dispositions of an equity security pursuant to a domestic relations order
The disposition or closing of a long derivative security position as a result of cancellation or expiration, provided that the Section 16 insider receives no value in exchange for the expiration or cancellation

Note that in all of these exemptions the actual value / percentage of the company owned by the insider remains the same relative to other holders. This obviously does not apply when you give away shares to somebody.

If gifting shares was an exemption to form 4, then anybody could just gift tons of shares to family members to sell on their behalf and effectively sell-off their holdings in secret. This is exactly the kind of thing that Form 4 is there for, to inform investors on the current status of insider holdings.

So it's really obvious that a gift transaction should have been on a Form 4 and not a Form 5.

I know these things are kind of complicated but I think you should be able to understand now.

Other executives have reported gifting on their Form 4's.

Here is an example:

https://www.sec.gov/Archives/edgar/data/1326801/000112760216068703/xslF345X03/form4.xml

Sure it's only a small number shares and is not a huge deal compared with lying for years about a bogus solar cell project in an effort to fool naive people into giving him their retirement savings. But still, you are wrong.