What Is A Form 10 Registration Statement? Form 10 Securities Lawyers

Form 10 is a type of registration statement used to register a class of securities under Section 12(g) of the Securities Exchange Act of 1934 (“Exchange Act”). Both public and private companies can register a class of securities on Form 10. Form 10 is also used by shell purveyors to create inventory for reverse merger transactions that take a company from private to public company status. These shells are subject to SEC reporting requirements. This blog post addresses the most common questions we receive about Form 10 registration statement during the going public process.

Q.  When is a company required to file a Form 10 registration statement with the SEC?

A. Companies with more than $10 million of total assets and over the applicable minimum number of holders of their equity securities must register that class of equity securities under the Exchange Act. For companies that are banks or bank holding companies, there must be more than 2,000 holders of record of the class of equity securities. For companies that are not banks or bank holding companies, there must be either more than 2,000 holders of record of the class of equity securities or more than 500 record holders of the class of equity securities that aren’t accredited investors.  If a company meets these thresholds it will be required to register a class of securities under the Exchange Act even if it does not seek to list on the NYSE or NASDAQ.

Q. When does a registration statement on Form 10 become effective?

A. Form 10 registration statement becomes effective automatically, sixty days after the initial filing date regardless of whether there are unresolved SEC comments.

Q. What happens when a Form 10 registration statement becomes effective?

A. Upon effectiveness of a Form 10 registration statement, the issuer becomes subject to SEC reporting requirements of the Exchange Act and is obligated to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Unlike effectiveness of a registration statement on Form S-1, effectiveness of a Form 10 registration statement causes the issuer to be subject to Exchange Act Section 14’s proxy rules. Management and shareholders also become subject to the beneficial reporting requirements of Sections 13 and 16 of the Exchange Act.

Q. Can an issuer voluntarily file a registration statement on Form 10?

A. Yes, an issuer can voluntarily file a Form 10 to register a class of securities.

Q. If I file Form 10 registration statement will FINRA give me a ticker symbol?

A. Even though an effective Form 10 registration statement causes an issuer to become subject to SEC reporting requirements of the Exchange Act, a Form 10 registration statement  does not make a company public or result in assignment of a ticker symbol by FINRA.

Q. How does a company obtain a ticker symbol after filing a registration statement  on Form 10?

A. FINRA assigns ticker symbols and the company must meet FINRA’s requirements which vary depending upon whether the company will trade them on the OTC Markets Pink Sheets, OTCQB, OTCQX or an exchange such as NASDAQ, AMEX or NYSE. Generally the Company must have 35 shareholders with unrestricted shares and locate a sponsoring market maker to submit a Form 211 on its behalf.

Q. If my company files a registration statement on Form 10 will the shares registered become free trading shares?

A. No, unlike a registration statement on Form S-1, Form 10 does not register a securities offering or transaction pursuant to Section 5 of the Securities Act of 1933, as amended (the “Securities Act”). As such, a Form 10 registration statement will not cause restricted securities to become unrestricted.

Q. If a company files a Form 10 registration statement will it meet the informational requirements of SEC Rule 15c-211?

A. Yes, assuming the information in the Form 10 registration statement is complete and current.

Q. What is a public shell company?

A. A public shell company is an issuer with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents or assets consisting of any amount of cash and cash equivalents and nominal other assets.

Q. Does a Form 10 registration statement cure “public shell company” status for purposes of Rule 144 for an issuer which engaged in a reverse merger with a public shell company?

A. A Form 10 registration status can cure public shell company status and has been used by many companies after reverse mergers. Rule 144 is available to shareholders of former shell companies if:

• The company is no longer a shell company;
• The shell company must be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
• The shell company must have filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports;
•  The shell company must have filed all and have filed current “Form 10 information” with the SEC reflecting its status as an entity that is no longer a shell company,

Q. If a non-reporting company was a shell company twenty years ago, is it required to file a Form 10 to cure its shell status for purposes of its shareholders having the ability to rely upon Rule 144’s safe harbor?

A. Yes, if a non-reporting entity was a shell company during any time in its history, it must either file a Form 10 registration statement or a registration statement on Form S-1 in order for its shareholders to rely upon Rule 144.

For further information about Form 10 Registration Statements, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real South, Suite 202 North, Boca Raton, FL, (561) 416-8956, or by email at [email protected].  This securities law Q & A is provided as a general or informational service to clients and friends of Hamilton & Associates Law Group, P.A. and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Going Public Attorneys
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com