If a company files within an extension period, will it be considered timely for form eligibility purposes?
Yes - it will be treated as having timely filed its Exchange Act reports for the purposes of the Form S-3 eligibility requirements.
Form S-3 is available only to registrants who have filed their Form 10-Ks and 10-Qs on time during the most recent 12 month period.
Companies that file late and do not use Rule 12b-25 at all - and companies that file a Form 12b-25 but do not submit their reports within the applicable extension period - lose their ability to use short-form registration.
Source: The SEC's Manual of Publicly Available Phone Interpretations under "M. Exchange Act Rules", interpretation #17 discusses how secondary offerings on Form S-3 can continue during an extension - until a company fails to make a filing by the Rule 12b-25 deadline.
When a company no longer is "listed" by an exchange.
In other words, the exchange no longer allows the securities to be traded through its system.
Before a company can begin trading on an exchange or the Nasdaq Stock Market, it must meet certain initial requirements or "listing standards." The exchanges and the Nasdaq Stock Market set their own standards for listing and continuing to trade.
The SEC does not set listing standards. Many distressed companies are at risk of falling out of compliance with the Nasdaq, NYSE or Amex listing maintenance standards.
Nasdaq has been aggressive about enforcing its standards at least in part because it has been embarrassed by the number of Nasdaq-listed technology companies that have developed serious financial problems.
Source: An investor can determine whether the New York Stock Exchange is seeking to delist a company by visiting the NYSE's "Press Releases" Web page
Each exchange has minimum qualifications that a company must meet - and maintain - to be listed.
These include quantitative and qualitative (e.g., corporate governance) standards.
The initial listing requirements mandate that a company meets specified minimum thresholds for: the number of publicly traded shares, total market value, stock price, and number of shareholders.
After a company starts trading, it must continue to meet different, less stringent standards set by the exchanges or Nasdaq.
The maintenance standards include, among other requirements, quantitative standards based on: market capitalization, minimum bid price for the stock, market value of the public float number of market makers.
The exchanges and Nasdaq also have broad discretion to delist when it determines that a delisting is in the best interest of investors. Source: The initial and continued listing requirements are on the Web sites of the NYSE
stock can also be traded on two different quotation services:
the Over the Counter Bulletin Board, which has minimal financial reporting requirements,
or on the Pink Sheets, which do not have reporting requirements.
When a company isn't listed, it often will trade on the Pink Sheets or the Over the Counter Bulletin Board (OTCBB).
A stock that doesn't trade on a major exchange is said to trade over the counter (OTC).
This means that the stock is dealt between individuals connected by telephone and computer networks.
The company may be listed on the OTCBB because it is unable to meet the initial listing requirements of the Nasdaq or NYSE. In such a case, a company may choose to test the waters of the OTCBB, using it as a stepping stone before leaping into the larger exchanges and markets.
The Pink Sheets are different from the OTCBB.
Companies on the Pink Sheets are not required to meet minimum requirements or file with the SEC. So-named because they were actually printed on pink paper, the Pink Sheets started out as a daily quote service provided by the National Quotation Bureau.
Typically, companies are on the Pink Sheets because either they are too small to be listed on a national exchange or they do not wish to make their budgets and accounting statements public.
To avoid having to file with the SEC, some large foreign companies such as Nestle S.A. have penetrated the American securities markets through the Pink Sheets.
Companies listed on the Pink Sheets are difficult to analyze because it is tough to obtain accurate information about them.
The companies on the Pink Sheets are usually penny stocks and are often targets of price manipulation. They should only be purchased with extreme caution.
How Does a Company Become Quoted on the Pink Sheets?
To be quoted on the Pink Sheets, you need to find one market maker willing to quote your company's stock.
Only SEC-registered broker-dealers (market makers) that are members of the National Association of Securities Dealers (NASD) can quote securities in the Pink Sheets.
There are three ways a market maker can initiate a quotation in a security that is not already quoted on the Pink Sheets:
Form 211 - SEC Rule 15c2-11 requires that, before a broker or dealer publishes proprietary quotes on a quotation medium, it must gather, review, and retain certain information about the issuer.
The market maker must file a Form 211 with the NASD OTC Compliance Unit, along with two copies of the required issuer information. After a successful review, the NASD Compliance Unit will notify the market maker that it may enter a quotation on the Pink Sheets. Issuers may contact a registered broker-dealer for sponsorship of a security on the Pink Sheets.
Unsolicited Quote - An exception to Rule 15c2-11 exists for Unsolicited Customer Orders. To avail itself of this exception, an NASD member firm must ensure that the quotation published or submitted: (1) is solely on behalf of a customer; (2) represents the customer's indication of interest; and (3) does not involve the solicitation of the customer's interest
Exemption to Rule 15c2-11 - If a market maker already quotes the security in another market center, the market maker may qualify for an exemption to Rule 15c2-11 and skip the review by the NASD OTC Compliance Unit. In this case, the market maker can contact the Pink Sheets and request to quote the security in the Pink Sheets immediately
There are over 200 market makers that participate in the Pink Sheets. Only one market maker is required for a security to be in the Pink Sheets; however, not all market makers are willing to file a Form 211. Many market makers will begin to quote a security after it becomes "piggyback qualified" and they can do so without filing the Form 211.
There are no listing requirements to be quoted on the Pink Sheets. Current financial information must be submitted with the Form 211. Current NASD rules do not require the financial statements of Pink Sheet issuers to be audited, but they should be prepared in accordance with GAAP or, for foreign issuers, in accordance with their home country's accounting standards.
While Pink Sheets does not have a requirement that the issuer continue to provide updated financial information to the Pink Sheets; federal securities law requires that adequate current information must be publicly available when an issuer's securities are traded in the OTC market under the following circumstances:
At the time of initial quotation in public markets;
At any time corporate insiders or other affiliates of the issuer are offering, buying or selling the issuer's securities in the OTC market;
With regards to the MMs...read this passage completely and then read it again for some interesting insight....
A company can help a market maker quote its stock by providing the market maker with information.
SEC Rule 15c2-11 requires a broker/dealer to obtain and keep in its files certain information about an issuer before initiating a quote for the issuer.
The market maker must have a reasonable basis for believing that the information is accurate and obtained from reliable sources.
The required information includes a general business description, location and contact information, officers, total shares outstanding, transfer agent, recent prospectus or offering circular, balance sheet, retained earnings and profit and loss statements.
The NASD monitors compliance with this rule by requiring market makers to file a Form 211 at least 3 days prior to quotation in the Pink Sheets.
NASD review may take a considerable amount of time depending, among other things, on whether or not the NASD requests additional information from the market maker and the amount of time required to respond to requests for additional information.
Quotation of a Delisted Security on the Pink Sheets Because the Pink Sheets is a quotation medium for subscribing members and not an issuer listing service, a delisted issuer cannot "list" themselves in the Pink Sheets.
Last Edit: Mar 6, 2005 20:43:14 GMT -5 by fastwalker
SEC Rule 15c2-11 provides an exemption to filing a Form 211 with the NASD for brokers that wish to submit an unsolicited quote. An unsolicited quote represents a customer order and not a market maker's own position and must be removed from the system once the customer order is executed. Pink Sheets generally will publish unsolicited quotations in securities that meet one of the following six conditions: The Issuer of the securities is subject to Section 13 or 15(d) of the Securities Exchange Act of 1934 and current in its filing obligations. The securities were delisted from NYSE, AMEX, NASDAQ or the OTCBB. The Issuer is a bank, savings and loan, or insurance company. The securities were issued as part of a bankruptcy plan of reorganization. The security being quoted is a foreign ordinary, which is listed on a foreign exchange, or an ADR representing such ordinaries. The Issuer is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934. However, adequate current information concerning the Issuer is publicly available via the Pink Sheets News Service and the Issuer's transfer agent is registered under the Exchange Act. This information must be [is] less than 90 days old and [it] include, at a minimum, the following basic information regarding the issuer specified in paragraphs (a)(5)(i) to (xiii), inclusive, and paragraph (a)(5)(xvi) of Rule 15c2-11 under the Exchange Act or, if the issuer is an insurance company, the information specified in Section 12(g)(2)(G)(i) of the Exchange Act. Pink Sheets has created a Guideline for Providing Adequate Current Information Pursuant to Rule 15c2-11 (pdf) to help OTC issuers and brokers in understanding what information is required to be provided.
Previously in this thread, I supplied several posts that will identify various discussion points of the PR. If you feel that additional data is required, PM me and I will add it, after it has been edited for content where relevent to this thread..
Last Edit: Mar 6, 2005 23:27:48 GMT -5 by fastwalker
For the sake of clarity and ease of discussion, I’ve broke out this PR up into 38 distinctive discussion points.
LAS VEGAS--(BUSINESS WIRE)--March 4, 2005--Commencing at 9:30 a.m. EST yesterday, trading of the common stock of CMKM Diamonds Inc. (Pink Sheets:CMKX) was temporarily suspended by the Securities and Exchange Commission ("SEC").
(1). This temporary suspension will expire on March 16 at 11:59 p.m. EST and trading in CMKX is anticipated to resume on March 17, 2005.
(2). In its reasoning, the SEC stated it had concerns over the adequacy of publicly available information concerning CMKX's
(a). assets and liabilities, mining and other business activities,
(b). share structure and stock issuances, and corporate management.
(c). Further, the SEC was concerned that CMKX may have unjustifiably relied on
(d). Form S-8, filed in May 2003, to issue unrestricted securities and that
(e). CMKX and/or certain of its stockholders may have unjustifiably relied on Rule 144(k) of the 33 Act in conducting an unlawful distribution of its securities
(f). that failed to comply with the resale restrictions of Rules 144 and 145 of the Securities Act.
(3). CMKX has been in discussions with the SEC in relation to the SEC's inquiry into another public company that has done business with CMKX.
(4). In this process, CMKX has provided the SEC with substantial documentation, much of which spans back to transactions and stock issuances in 2002.
(5). It is believed some of the information provided raised concerns with the SEC, sufficient enough to cause this temporary suspension of trading.
(6). CMKX anticipates a formal request for documents to be issued by the SEC in the near future.
(7). "The SEC did not provide us with any notice of the temporary trading halt," stated Urban Casavant, CEO of CMKX.
(8). "This was an unwelcome surprise, especially since our counsel has had ongoing dialogue with the SEC."
(9). According to the SEC's Web site, ww.sec.gov, "The primary mission of the SEC is to protect investors and maintain the integrity of the securities markets.
(10)."Consistent with this mission, Casavant specifically engaged Robert A. Maheu to assist CMKX in its compliance efforts.
(11)."Like the SEC, protecting our investors is a primary concern. We have been aggressively gathering the essential information needed to comply with our public disclosure obligations and anticipate working with the SEC to ensure our compliance with all federal regulations," stated Maheu, co-chairman of CMKX.
Last Edit: Mar 6, 2005 23:43:10 GMT -5 by fastwalker
(12)."We are not letting these regulatory matters impede our primary focus of creating stockholder value through the mining and development of our mineral assets," stated Maheu.
(13). CMKX is continuing to search for additional property claims in Canada and monitor its holdings in Ecuador.
(14). On Feb. 17, 2005, CMKX filed an amended Form 15 to reinstate its reporting obligations under the 34 Act. SEC regulations require CMKX to file, within 60 days after the date of the filing of the amended Form 15, all reports which would have been required had the original Form 15 not been filed.
(15). CMKX has not been provided a waiver, "variance" or any other relief by the SEC for complying with the 60-day requirement.
(16).In fact, due to the overwhelming number of reports that need to be filed, coupled with the necessary financial statement preparation, CMKX will not be able to comply with the 60-day requirement.
(17). Management does not believe the filing of the amended Form 15 had anything to do with the SEC's decision to temporarily suspend trading in its common stock and continues to aggressively do everything within its power to comply with its 34 Act reporting requirements.
(18). With its reporting status reinstated,
(19) CMKX anticipates filing a number of significant corporate updates with the SEC in the upcoming weeks on Form 8-K.
(20).Investors and stockholders are encouraged to review these forms as they become available through the SEC's EDGAR database.
(21).The SEC's Web site further discloses, "The laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it.
(22)."Casavant reiterated, "We understand the importance of supplying accurate information to the public and have made it our top priority to uncompromisingly disclose all material corporate information as soon as it becomes available."
(23).Consistent with CMKX's continuing efforts to furnish the investing public and its stockholders with current information and to quell any inaccurate rumors, CMKX has disclosed certain corporate information pertaining to its operations and corporate structure.
(24).Of the 800 billion authorized shares of common stock, CMKX currently has 703,518,875,000 shares of common stock issued and outstanding to approximately 2,032 stockholders of record (excluding shares held in "street name").
Last Edit: Mar 6, 2005 23:31:44 GMT -5 by fastwalker
(25).In addition, effective March 1, 2005, CMKX has relocated its executive office address to 5375 Procyon St., Suite 101, Las Vegas, NV.
(26).Lastly, CMKX's current officer is Urban Casavant (CEO/President/Secretary/ Treasurer) and current directors are Urban Casavant and Robert A. Maheu
(27).Michael Williams will join the board of directors upon CMKX's obtainment of D&O insurance.
(28).Investors and stockholders are being asked to please refrain from contacting the company, the SEC, NASD, the Transfer Agent and/or Stoecklein Law Group to allow them to focus on completing the tasks at hand.
(29).All corporate updates will be made in press releases and filed in current reports on Form 8-K as they become available.
(30).CMKX also would like to repeat the SEC's statement of, "At the heart of effective investor protection is an educated and careful investor" and encourage its stockholders and other investors to visit the SEC's Web site (www.sec.gov), which offers the public a wealth of educational information.
(31).This press release may contain statements that constitute "forward-looking statements" as defined under U.S. federal securities laws describing the reinstatement of CMKX's reporting obligations and the expected impact of these obligations on CMKX's operations.
(32).Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "establish," "project" and similar expressions identify forward-looking statements, which generally are not historical in nature.
(33).Forward-looking statements are based on current expectations and assumptions that are subject to certain risks and uncertainties that could cause actual results to differ materially from CMKX's historical experience and its projections.
(34).Such forward-looking statements are inherently uncertain, and actual results may differ from those expressed or implied in the forward-looking statements.
(35).Consequently, readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date they are made.
(36).CMKX's actual results could differ materially from such forward-looking statements because of factors such as:
(37).Impact of the temporary halt in trading on CMKX's stock price; (a). impact of the halt on CMKX's operations; (b). uncertain further regulatory scrutiny; the current state of operations; (c) unavailability of documentation and corporate records; (d). changes in the number of outstanding shares of common stock and number of stockholders of record; (e). the impact of failing to meet the 60-day filing requirement; timing necessary to comply with reporting requirements; (f). lack of adequate internal controls; (g). unforeseen capital deficiencies; unavailability of insurance; (h). changes in the mining and metals environment, (i). including actions of competitors; (j). the effectiveness of CMKX's development and drilling programs; regulatory and legal changes; and other risks associated with companies in similar industries
Point #1 (hereafter all points will be referred to as simply their numerial assigned identifer).
This is a straight forward statement clearly indicating a specific intent on the part of the SEC to impose it's will upon CMKX.
#2. This statement indicates that the SEC has at least six (6) "stated" areas of concerns arising from CMKX's failure to initate, comply and file forms in accordance with SEC stated "mandatory" rules / regulations.
#3. This statement clearly indicates that CMKX was involved with the SEC at some level, to accomodate the requirements necessary to satisfy the SEC stated "mandatory" rules / regulations.
It also indicates that the SEC is requiring additional information relevent to "another" entity, which CMKX had prior dealings with in 2002.
#4. This statement clearly indicates that as a result of this "inquiry" initated by the SEC with regards to this "other entity," the association between CMKX is or was current, involves stock transactions and in was initiated in 2002 and may culminates at some point here, in the present.
#5. This stock transaction was of a nature that caused the SEC concern, that its process may have been so blantant or "inconsistent" with the stated "mandatory" rules / regulations, that the transaction could be views as a "conflict."
Last Edit: Mar 6, 2005 23:44:29 GMT -5 by fastwalker
(38). CMKX undertakes no obligation to publicly update or revise any forward-looking statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Unfortunately, I do not have the time right know to start on the various points. Please review them and if you feel like making a post of substance, please do so on this thread...