Glossary of Reverse Merger Terms

This list, adapted from my book, provides definitions of some of the most-commonly used terms on this blog. backdoor registration. A method by which a company’s shares can become publicly tradable through a merger directly with a public shell, after which the private operating company survives the merger and succeeds to the public status of ...

Worm/Wulff Change: A Major Improvement with Some Disappointment

It has taken a bit of analysis, discussion and interaction with SEC staff, but I am now able to offer some thoughts on the ultimately very positive change (albeit not as far-reaching as hoped) implemented by the SEC with respect to codifying certain positions of the staff under what have been known as the Worm/Wulff ...

SEC Offering More Sarbanes 404 Relief for Smaller Companies 2

The SEC intends to propose delaying for another year the need for smaller public companies to have outside auditors assess internal financial controls under Section 404 of the Sarbanes-Oxley Act, and expect it to start in 2009. According to published reports, you would still have to have management assess the controls. This is not official ...

Barron's Article Serves as Good Reminder

An article in this week’s Barron’s magazine raises a number of concerns about a Chinese company that went public through a reverse merger. The article points primarily to the company’s Chinese auditors and a question about their true independence and the extent to which that potential problem was disclosed. As a result, it appears the ...

Alert: S-3 Availability Limited to Exchange-Traded Stocks

Today the SEC approved the expanded availability of “short form” registration on Form S-3 (and F-3 for foreign companies), as well as changes to Regulation D. Unfortunately I was not able to listen in, so will have to play the replay at some point in the next few days. I have heard, however, that they ...

Some Rule 144 Tidbits

Dear blogees: I have read the new Rule 144 release initially. There are a few things that are not clear to me that I am discussing with colleagues and others to report about later. In the meantime, here are some interesting tidbits, which should be taken together with my brief summary from the other day ...

December 11 SEC Open Hearing to Approve Form S-3 Availability

The SEC has announced that there will be an open hearing of the Commission on Tuesday, December 11 at 10 am with the following agenda items included: 1. The Commission will consider whether to adopt amendments to the eligibility requirements of Form S-3 and Form F-3 of the Securities Act of 1933 to allow companies ...

Alert: Rule 144 Final Release Out; Shell Holders Can Sell in One Year

Today the SEC published the final Rule 144 release. I have not yet read it fully. It takes effect 60 days after publication in the Federal Register, which presumably will be soon. The big news: Worm/Wulff is officially lifted. They did change from their original proposal and now will allow former holders of shell shares ...