Tag Archives: SEC Form 8-K

When Must an SEC Filer Post an 8-K?

Public companies usually post several 8-Ks throughout the year.   An 8-K should be filed whenever a significant corporate event happens which triggers a disclosure. These are known as “material events” and are beyond what occurs in the ordinary course of business.

Material Events Trigger 8-K Filings

SEC Filers, such as OTC Bulletin Board and OTC Markets OTCQB and OTCQX, must file these 8-Ks promptly when material events occur.  They cannot wait until the next 10-Q or 10-K is due.

SEC Form 8-K Must Be Filed Within 4 Business Days

The time frame in which these SEC fully reporting companies are required to make most 8-K disclosures is within Four (4) Business Days of the triggering material event.  (In some cases the 8-K must be filed even earlier).

The SEC has posted a detailed and helpful explanation of disclosure items that need to be filed in an 8-K on SEC.gov.

OTC Markets Securities Attorney to Review and Draft 8-Ks

Matt Stout is a OTC Markets securities compliance attorney representing microcap public companies, including SEC filers quoted on the OTCQB and OTCQX and those on FINRA’s OTC Bulletin Board (OTCBB).

Issuers with questions regarding SEC regulation and reporting, securities compliance, FINRA corporate actions and DTC eligibility can contact OTC Bulletin Board lawyer Matt Stout at (410) 429-7076 or mstout@otclawyers.com.

What is an SEC Comment Letter?

The term SEC Comment Letter generally refers to correspondence from the Securities and Exchange Commission (“SEC”) staff to public companies which are SEC filers.  An SEC Comment Letter is sent by the SEC to an Issuer when an Issuer’s SEC filing needs further clarification.

SEC Comments on an S-1 Registration Statement

One example of an SEC Comment Letter is in response to an Issuer’s filing of an S-1 Registration Statement.  An S-1 Comment Letter is sent by SEC staff who review the disclosures set forth in an S-1 when there are questions that need to be answered or typos which need to be corrected.  There may be a series of SEC Comment Letters and Issuer response letters that go back and forth until the S-1 is finalized and declared effective by the SEC staff.

SEC Comment Letters on 10-K, 10-Q, Reg A, and 8-K Filings

The SEC can also issue an SEC Comment Letter in response to disclosures made in a public company’s 10-K, 10-Q, Regulation A, or 8-K, or in any other SEC filing, such as a Form 10.

SEC Comment Letters are Searchable in EDGAR

SEC comment Letters and the responses by Issuers or their securities lawyers are contained in the SEC’s EDGAR database as “correspondence.” The SEC made this correspondence public record in 2005 for filings made after August 1, 2004 which were reviewed by the SEC staff.

SEC Comment Letters Can Address Questions of Disclosure

SEC Comment Letters usually ask for additional information so the SEC staff can understand the Issuer’s disclosure.  Sometimes the SEC requests that an Issuer revise disclosures in a document already filed with the SEC if the facts and circumstances warrant such a change.  In other cases, the SEC will allow prior filings to remain, but request that the Issuer provide additional or different disclosures in future SEC filings.

Are SEC Comment Letters Legally Binding?

There are often several rounds of letters between the SEC and an Issuer’s securities attorney  until the SEC is satisfied with the information provided and changes made. SEC Comment Letters provide SEC staff positions on the issues discussed but are not an official or legally binding statement of the SEC’s views on the particular issues. SEC Comment Letters are expressly limited to the specific facts and circumstances of the named filing in question and do not automatically apply to other filings or to other SEC filers.

Experienced Securities Lawyers Can Respond to SEC Comment Letters

OTC public companies that received an SEC Comment Letter in response to an S-1 Registration Statement or to any other disclosure in an SEC Filing can contact securities attorney Matt Stout at (410) 429-7076 or mstout@otclawyers.com.


What is Fair Disclosure under Regulation FD?

Regulation FD is a public company disclosure rule designed to address selective disclosure.  The theory behind Regulation FD is to prevent insider trading by promoting the full and fair disclosure of material non public information.

When a public company discloses material nonpublic information to shareholders or market professionals, (who may trade on that information) that the company must also make public disclosure of the same material information.

How is Public Disclosure Made Under Regulation FD?

Under Regulation FD, the required public disclosure is generally made by filing an 8-K, but it is possible for an Issuer to follow the spirit of the regulation through a combination of other methods if the same information is disseminated.

When Must Disclosure Be Made Under Regulation FD?

Under Regulation FD, the timing of the required public disclosure depends on whether the selective disclosure was intentional.  If the selective disclosure is intentional, the public company must make public disclosure at the same time.   In the case of a non-intentional disclosure, the Issuer must promptly make disclosure to the public.


When Does an Issuer Need to File an 8-K?

An 8-K is Filed When Something Material Happens

One of the most often asked questions of a securities attorney is when an Issuer is required to file an 8-K.  There is a laundry list of specific events that require the filing available at SEC.gov and on the Form 8-K itself.  But it is helpful for management of small public “bulletin board” companies, listed on the OTCMarkets OTCQB, to look at these requirements as more of an opportunity to both document and share news, instead of trying to find a way “not to file” to avoid administrative hassle and costs.

The short answer is whenever there is a material development or the occurrence of an “event” that the Issuer’s shareholders (and the investing public) should know about.  These material events may differ greatly when comparing a development stage, micro cap company with Google or Microsoft, and therefore it likely that a development stage company should actually be filing more 8-Ks if it is actively operating.

Microcap Issuers Should Provide As Much Information As Possible to Shareholders

At the Law Office of Matheau J. W. Stout, Esq., we advise our OTCQB and OTCBB microcap public company clients to err on the side of full disclosure, and if there is a doubt as to whether or not the transaction or event is “material” the Issuer should file the 8-K.  Simply put, there is no penalty for providing shareholders with too much information (“TMI”) as long as that information is accurate and the SEC appreciates those public companies which go above and beyond in communicating with their shareholders.

File an 8-K When News Goes Out In a Press Release

Although it may seem obvious, quite often, development stage OTCQB and bulletin board public companies are so eager to issue good news to the public through press releases that they forget to file the 8-K.  In general, if the news is press release worthy, it might very well be considered material, and there should be an 8-K filed within four (4) business days of the occurrence of the event.   Because of the difference in market cap, shareholder base, revenue and cash flow, the signing of (or loss of ) a Letter of Intent or Purchase Order for $50,000 may not be material for Google, but it may be radically good (or bad) news for a newly reporting Issuer still in the development stage with few assets and no revenue.

This kind of thinking (that there is no such thing as “TMI”) prevents many problems.  When small public companies take the time to think hard about whether the news being distributed can be easily and well documented, that moment of pause can save many headaches later.