SEC Form 10 is a filing with the Securities and Exchange Commission (SEC), also known as the General Form for Registration of Securities. It is used to register a class of securities for potential trading on U.S. exchanges. Any company with over $10 million in total assets and 750 or more shareholders is required to file a Form 10 with the SEC. Any company under these thresholds may file a Form 10 voluntarily. The Form 10 registration statement automatically becomes effective sixty days post filing.
The filing of SEC Form 10 is a necessary but insufficient step to register securities for trading. Financial Industry Regulatory Authority (FINRA) must approve the trading of the securities.
When the registration statement takes effect, other reporting requirements are triggered. The issuer must file annual reports (10-K), quarterly reports (10-Q), current reports (8-K) and annual proxy statements. In addition, management and shareholders become subject to the beneficial ownership reporting requirements of Sections 13 and 16 of the Securities Exchange Act of 1934.
The Elements of SEC Form 10
The General Form for Registration of Securities includes the following items that need to be furnished:
Business
Risk Factors
Financial Information
Properties
Security Ownership of Certain Beneficial Owners and Management
Directors and Executive Officers
Executive Compensation
Certain Relationships and Related Transactions, and Director Independence
Legal Proceedings
Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters
Recent Sales of Unregistered Securities
Description of Registrant's Securities to be Registered
Indemnification of Directors and Officers
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Financial Statements and Exhibits
SHORT AND LONG TERM BENEFITS TO F10/AUDITS?
1). CREDIBILITY - As most HHSE longs know, the "unaudited" status of the majority of HHSE's prior filings has provide fertile ground for a small but vocal handful of stock critics. For eight years, their chorus of "impending doom, any minute now... just wait... just wait a bit longer, hold on, it's coming," has in it's own ironic way mirrored the failure of HHSE management to promptly finish the Form 10 registration. So, management understands that we have inadvertently empowered the critics to think (or state) that the Registration filing will never happen. However, keep in mind that the delay in the Form 10 filing has been the ONLY prediction that the naysayers have gotten right. That said, this one and only temporarily correct critique is about to move over onto the stock critic's extraordinarily long "WRONG" statements column, which will give them a perfect 100% ALWAYS WRONG rating. Audited financials are credible financials. Whether you like it or not. Period.
2). UPLIST TO OTC:QB - The next natural step following registration is an automatic move of HHSE changing its annual subscription with the OTC Markets from "Pink" to QB. This more-prestigious trading platform is not only more credible to investors, but is also a threshold requirement for MANY forms of investors and institutional shareholders.
3). INFUSION OF NEW SHAREHOLDERS - There is a significant list of individuals, funds and investment groups that have been observing and following HHSE for years (and communicating frequently with Hannover House as to their interest). We're not talking about "toxic lenders" of the sorts like TCA or JSJ that function as neither legitimate investors nor lenders but are instead operating on the fringes of securities and usury laws by structuring inflated stock conversion ventures. No, we are talking about legitimate, high-net worth individuals and "whale" funds that see an EASY step to pop the HHSE stock to north of $.10 per share, prior to the implementation of more sophisticated investment tools (ranging from multi-million dollar lines of credit to direct stock purchase ventures). FOR INSTANCE - with HHSE at $.10 per share, an investment group pursuing a direct-stock purchase of 9.9% equity,would be buying approx. 80-mm shares for a payment directly to HHSE of $8-million. That would be an $8-million cash infusion that could be used to grow operations and revenues, and to clean-up the Company's balance sheet debts, perhaps negotiating substantial reductions in exchange for cash in some cases (most of which were already discussed with major creditors during last year's protracted Crimson Forest merger effort).
Please note that we are NOT saying that the Company definitely will obtain a multi-million dollar line of credit under attractive terms post-registration... and that we are NOT saying we will be issuing any new stock at all once the HHSE price hits $.10 per share. But we want it to be clear to our shareholders that these options would exist after a registration filing followed by the infusion of new shareholder capital on the open market. It's a powerful position that is obtainable for the Company... and one that does not currently exist as a Pinksheets-listed equity.
4). SHARE LIQUIDITY AND EXCHANGE - Once registered, the Company's shares can be moved to electronic trading platforms (DWAC / DTC) for simplified deposit of shares and trading eligibility for many larger funds and brokerages.
AI
