From an online explanation of the pros and cons of "going dark," as HERB did on April 23, 2021 (effective 90 days after that date):
Pros and Cons of “Going Dark”
The following chart briefly summarizes some of the pros and cons of “going dark.” Of course, these factors will have different weight for different companies depending on the circumstances. It is important for the board of directors to consider and review the specific factors most important to its company and in particular to obtain a detailed analysis of the cost savings expected from “going dark.”
(This is copied from a chart, so to read it, the first numbered item is the "pro" and the second item with the same number is the "con" in that category.)
I found this interesting, with respect to HERB, and why it may have filed the Form 15.
Pros
Cons
1. Significantly lower operating costs and management time commitment for compliance and reporting activities. Sarbanes-Oxley Act compliance is also no longer needed.
1. If the company “goes dark,” but later somehow finds itself back over the 300/500 stockholder limit at a test date, it will once again be subject to SEC reporting requirements.
Securities laws and the Pink Sheets may require some level of ongoing disclosure to stockholders. Annual stockholder meetings are still required.
2. D&O insurance costs may be decreased.
2. Stockholders may bring litigation against the board of directors for, among other things, (a) breach of fiduciary duty caused by decreased liquidity and trading price resulting from “going dark,” if that in fact occurs, (b) insider trading by officers and directors on the basis of material non-public information (because no periodic reports have been filed or adequate information released), or (c) repurchases by the corporation on the basis of material non-public information.
3. Personal liability of officers and directors, particularly certifying CEOs and CFOs, is reduced.
3. The absence of public exposure decreases not only the financial markets presence of the company, but can also hurt the company’s business. The securities of an unlisted non-reporting company will (a) be substantially less useful as currency for acquisitions, and (b) be significantly less attractive to employees for equity based compensation.
4. The stock will continue to trade on the Pink Sheets.
4. Trading volumes and analyst coverage will likely be significantly lower.
5. Less public scrutiny and disclosure, making it easier to keep confidential such matters as competitive business information and executive compensation.
5. The company will remain subject to anti-fraud provisions of state and federal securities laws.
The reduced governance and oversight requirements can result in an increase in conflict transactions, and even breaches of the duty of loyalty and a decreased focus on stockholders as a constituency.
6. The company will have greater freedom to explore possible extraordinary corporate transactions.
6. Stockholders may think the decision to “go dark” means that the company is in play or is trying to hide something.
7. Corporate governance requirements can be simplified. For example, it would not be necessary to have a majority of independent directors and the board of directors may be decreased in size.
7. “Going dark” will likely reduce liquidity in the trading market for the company’s securities and can sometimes result in a significant decrease in trading prices.
8. Many companies which “go dark” are sold or cease doing business within a few years after “going dark.”
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