Get down to brass tacks: when must you amend? According to The Corporate Counsel, the requirement to amend a 1934 Act filing such as Form 8-K, 10-Q, or 10-K can arise from three sources: the instructions in the form itself; comments from SEC staff; or the discovery of a material misstatement or omission. Ten line items in Form 8-K call for certain information and an amendment to provide any of that information that was unavailable at the time of the first filing. Form 10-Q does not require such an amendment, but Form 10-K requires amending to include the disclosures mandated by 10-K’s Part III if they are not timely filed in proxy materials. The form also provides, at the filer’s option, amending to give the schedules specified in Regulation S-X’s Article 12. Most of the 8-K and 10-K amendments are merely updates and do not trouble companies or shareholders by suggesting any neglect of disclosure duties.
Abstracted from: When, Why & How To Amend An Exchange Act Report
The Corporate Counsel
Vol. 54, No. 3, Pgs. 5-16
Other amendments result from the SEC staff’s review of 1934 Act filings and their issuance of comment letters that ask filers—albeit rarely—to correct materially deficient disclosure or to supply omitted disclosure. The requirement to amend may also result from a company’s own discovery of deficiencies or omissions during a review of past filings.
Pin down the reasons to opt out ... or not. Immaterial mistakes in 1934 Act reports do not usually require amendments. Examples that might not require an amendment would include:
- Making trivial typos
- Not checking the Well-Known Seasoned Issuer (WKSI) box while having that status (that is, as opposed to checking
the box without being a WKSI; The Corporate Counsel recommends amending in such an instance, suggesting it
would be inappropriate to claim a “privileged status” that does not apply)
- Not putting an already filed exhibit in the report’s exhibit index
Nevertheless, there might be powerful nonlegal reasons for correcting immaterial mistakes. The mistakes could, for example, prompt shareholders to ask embarrassing questions; or in lawsuits stemming from offerings, plaintiffs could argue that the errors indicate a carelessness which refutes a defense of due diligence.
A different question confronts the numerous companies that file reports well before the due dates. Assuming the report is correct on the filing date, no SEC rule requires an amendment simply because an important business development occurs thereafter but before the due date. An 8-K (or other public disclosure under Regulation FD) might, however, be required or prudent.
Do not let the SEC nail you for noncompliance. A company may not correct flawed disclosure in a 1934 Act report with a subsequent report, The Corporate Counsel cautions. Furthermore, failure to file a correcting amendment to the original report before its due date could result in the temporary loss of the right to use a short-form registration statement such as Form S-3 or the company’s existing registration statements. If it neither incorporates by reference Part III disclosure from timely filed proxy materials into its 10-K nor timely amends the 10-K to provide that disclosure, the filer may not use Form S-3 for a year.
The SEC will sometimes decide that a report’s mistakes or omissions, unless addressed in an amendment, render the report “materially deficient” and consequently unfiled. A company’s assessment that an amendment is necessary does not often lead to such a decision by the SEC, which tends to be flexible in these circumstances. Among the small number of bright-line criteria that would lead to negative decisions is the failure to provide either an unqualified opinion by the outside auditors, mandatory audited or reviewed financials, or management’s report on financial controls.
Know the nuts and bolts of the process. The amendment procedure is relatively clear-cut, advises The Corporate
Counsel, although some quirks can complicate the process. Briefly, the mechanics are:
- Follow the instructions to update the ten designated line items in Form 8-K with previously unavailable data; do not file a
new Form 8-K.
- Submit the amendment format, titled as “8-K/A” or “10-K/A.”
- Do a separate filing for every report amended, except after obtaining a waiver to submit a Jumbo 10-K with several
years’ restated or delinquent financials.
- If an amendment’s rationale is at all unclear, explain it to quiet any concerns of shareholders, analysts, and financial
media that the company is in distress.
- Provide new CEO and CFO certifications when amending any report that requires them.
- File a new auditor’s consent with audited financials.
- Have the company’s “duly authorized representative” sign; although some filers have a majority of the directors sign, only
the representative’s signature is required.
- Include every amended line item’s full text.
- Refile the whole report if there are certain flaws in mandatory CEO and CFO certifications (e.g., specifying the incorrect
periodic report or omitting the date).
- State that the amend
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