Replies to post #123126 on DD Support Board and Research Team

[integral]

Let's suppose a Form 15 filer files a 10-12g to register securities:

1) Is the 60-day notice of effectiveness automatic in this case? Wouldn't regulators have something to say about a form 15 filer committing malfeasance and then turning around and registering securities?

2) Assuming the notice of effectiveness goes through and the shares are registered, what is the likelihood that a form 15 filer could return to full compliance?

The belief is that if a form 15 filer files a form 10 registration statement that becomes effective, they are now automatically subject to reporting requirements. I don't believe this to be the case. Am I wrong?

1)It would be automatic, and the SEC can contact the issuer. It happens. The SEC will remind the issuer, that once automatic the then registrant is subject to revocation.

2) They would be and subject to reporting requirements pursuant to the Exchange Act, Regulation S-X, Regulation S-K, SOX. Or risk Section 12(j) revocation.

3) See #2. Also, if an issuer "files a 10-12g" and it becomes effective after 60 days, and is deficient in and of itself, the registrant is subject to an immediate Section 12(j), irrespective if it begins to "file" its periodic reports. An issuer would be wise to withdraw the 10-12g before it becomes effective if the company knows it cannot comply.

[janice shell]

1) Is the 60-day notice of effectiveness automatic in this case? Wouldn't regulators have something to say about a form 15 filer committing malfeasance and then turning around and registering securities?

Yes, the registration statement would become automatically effective in 60 days. No, the SEC wouldn't make a point of expressing displeasure. Maybe the reviewer would ask why it did that, but I really don't know. It does happen, and not necessarily for sinister reasons. In most cases, it's because the company has received a financing offer that's contingent on it being an SEC registrant current with its filings.

2) Assuming the notice of effectiveness goes through and the shares are registered, what is the likelihood that a form 15 filer could return to full compliance?

I doubt there're any statistics on that, but it's what they're obliged to do.

[1manband]

You should also note the SEC is notoriously more strict regarding the review of registration statements for prior Form 15 filers. The Commission knows why companies file Form 15's to deregister (usually hiding fraud from the SEC) and thus are very skeptical about companies that try to re-register. Some attempts at reregistration fail because the SEC intentionally gives them the runaround with never ending rounds of comments, while others have to jump through more hoops than first-time registrants do. They also question (rightfully so) management's commitment to ongoing reporting requirements. If they terminated registration once, they can do it again, and that tends to rub the Commission the wrong way.

Filing a Form 15 and then later trying to reregister is not a good strategy. It is also much more expensive, in both time and money, than remaining an SEC registrant in the first place.