Hi_Lo
3 days ago
https://www.hg.org/legal-articles/how-finra-rule-6490-lmpacts-reverse-mergers-30567
HOW FINRA RULE 6490 lMPACTS REVERSE MERGERS
FINRA Rule 6490, has evolved since it was enacted over two years ago. For some time, FINRA has required that issuers provide expansive disclosures and supporting documentation not only for the corporate change subject to the notice but for the company’s entire corporate history from inception.
These disclosures are required of both SEC reporting and non-reporting issuers if they undertake corporate actions including reverse mergers. Compliance with Rule 6490's requirements is a minor task for companies going public by filing a registration statement with the SEC. Companies filing registration statements rarely have difficulties obtaining DTC eligibility unlike reverse merger issuers.
The public filings of companies who register with the SEC contain most of the supporting documentation required by Rule 6490.
It is no surprise that compliance with the requirements of Rule 6490 is less burdensome for companies going public using a registration statement because these companies have fewer corporate changes in their company history than companies engaging in reverse mergers. This is especially true for reverse merger issuers who undergo multiple changes of control and periods of inactivity.
The Problem with Reverse Mergers & Disclosure under Rule 6490
For companies that engage in reverse mergers as part of their going public transaction, compliance with Rule 6490's requirements can be impossible particularly when custodianship or receivership actions have been used by shell brokers to create public shells after years of inactivity. These companies may have multiple corporate actions related to prior changes of control and often have sketchy corporate histories. Some have even been hijacked through custodianship or receivership actions. In these circumstances, documents may be unavailable or if provided to FINRA, it could potentially result in FINRA referring the matter to the SEC’s Division of Enforcement.
These companies are almost always plagued with incomplete or fraudulent corporate records which make it extremely difficult for the post-reverse merger company to comply with FINRA Rule 6490. As a result, these companies may never get FINRA approval of the contemplated corporate action.
Rule 6490 Disclosures
Issuers must provide a cover letter disclosing the full corporate history for the issuer itemizing all material facts including every corporate change that has occurred from inception to present day.
Triggers for Review under FINRA RULE 6490
A FINRA review will be triggered if any of the five factors set forth in Rule 6490 are thought to be present:
• FINRA believes the forms are incomplete, inaccurate or filed without the appropriate corporate authority;
• The issuer is not current in its reporting obligations with the Securities and Exchange Commission;
• Persons involved in or related to the corporate action are the subject of pending or settled regulatory action or are under investigation by a regulatory body or are the subject of a pending criminal action related to fraud or securities law violations;
• Persons related to the corporate action are likely involved in fraudulent activities involving securities or may pose a threat to investors;
• There is significant uncertainty in the settlement and clearance process for the issuer’s securities.
Any company contemplating going public using a reverse merger must consider the potential impact Rule 6490 could have on its future corporate actions. Rule 6490 provides one more compelling reason why private companies seeking to go public should do so using a registration statement instead of a reverse merger.
Hi_Lo
3 days ago
The SEC doesn't care about OTC Markets alternate reporting standards.
HQGE must be registered with the SEC through a Form S-4 (or Form 10) which HQGE can't do because it had its registration with the SEC terminated and still has missing financials from all of 2022, 2023 and the 2024 quarterly report.
https://www.otcmarkets.com/filing/html?id=8880161&guid=4lO-kanF-sRSJth
https://www.investopedia.com/terms/s/sec-form-s-4.asp#:~:text=Companies%20file%20this%20form%20to,remain%20compliant%20with%20financial%20regulators.
SEC Form S-4: Definition, Purpose, and Filing Requirements
By
WILL KENTON
Updated January 22, 2024
Reviewed by
CHARLENE RHINEHART
Part of the Series
Guide to Mergers and Acquisitions
What Is SEC Form S-4?
SEC Form S-4 is filed by a publicly traded company with the Securities and Exchange Commission (SEC). SEC Form S-4 is required to register any material information related to a merger or an acquisition. The form is also filed by companies undergoing an exchange offer, where securities are offered in place of cash. There are some key details that companies must include on the form, including their registered name and the area where they are incorporated.
KEY TAKEAWAYS:
• SEC Form S-4 is filed by a publicly traded company to register any material information related to a merger, acquisition, or stock offering.
• The SEC requires that Form S-4 contain information regarding the terms of the transaction, risk factors, ratios, pro-forma financial information, and material contracts with the company being acquired.
• Companies seeking a hostile takeover of another company must file form S-4 in the interests of public disclosure.
Understanding SEC Form S-4
SEC Form S-4 is known as the Registration Statement under the Securities Exchange Act of 1933. Public or reporting companies must submit Form S-4 to the SEC whenever they are involved in a merger, acquisition, or stock exchange offer. The SEC reviews the information to ensure that the transaction is legal and able to proceed.
For merger and acquisition (M&A) transactions, the SEC requires that Form S-4 contain information regarding several factors, including the:
• Terms of the transaction
• Risk factors
• Ratio of earnings to fixed charges and other ratios
• pro-forma financial information
• Material contracts with the company being acquired
• Additional information required for reoffering by persons and parties deemed to be underwriters
• Interests of named experts and counsel
When completing SEC Form S-4, a company must include its registered name, jurisidiction of incorporation, classification code number, employer identification number (EIN), address and names of the principal executive officers, and the name and details of the service agent. Other details include the date of the proposed sale and the company's filer status.1
M&A activity happens when companies want to expend, unite efforts, move into new segments, or maximize stakeholder value. After the transaction is complete, new shares are distributed to the shareholders of both merging companies. An exchange offer usually happens in bankruptcy cases, when a firm or financial entity exchanges securities for similar ones at less rigid terms.
SEC Form S-4.
Special Considerations
All mergers require SEC Form S-4 filing. For example, here are five typical types of mergers:
• Conglomerate Mergers: These mergers involve two unrelated companies in terms of business who join to expand their current markets.
• Congeneric Mergers: In this type of merger, the companies occupy the same market. The merger creates efficiencies or economies of scale because the companies may use the same raw materials, technology, and research and development (R&D) processes.
• Market Extension Mergers: The companies that are merging may have similar products operating in different markets. The goal for all parties is to expand into new markets.
• Horizontal Mergers: The merging parties are competitors within the same industry. The goal of the merger is to expand market share.
• Vertical Mergers: Vertical mergers occur for supply chain reasons. One company is typically a supplier to the other, and the merger reduces the costs of the final product.
The Securities Exchange Act of 1933, often referred to as the truth in securities law, requires that these registration forms provide essential facts and are filed to disclose important information upon registration of a company's securities.
What Do Companies Use SEC Form S-4?
Companies must file Form S-4 with the Securities and Exchange Commission whenever they are about to go through a merger or acquisition transaction. It is also used to alert the financial regulator when companies tender a stock offering. For instance, they must file the form when they offer securities in place of cash. The SEC uses the form to determine the legality of the transaction.
Where Do You File SEC Form S-4?
SEC Form S-4 is filed with the Securities and Exchange Commission. Companies file this form to register information about mergers, acquisitions, or stock offerings with the regulator.
Do All Mergers Require an SEC Form S-4 Filing?
Yes, all mergers that involve public companies require the filing of an SEC Form S-4. Types of mergers include conglomerate, congeneric, market extension, horizontal, and vertical mergers. The SEC uses the information provided to ensure that the transaction is permitted.
The Bottom Line
Public companies in the United States are required to submit regular filings to remain compliant with financial regulators. They must also submit forms whenever there are key changes in their businesses. SEC Form S-4 is completed and filed with the SEC whenever companies undergo a merger or acquisition, including a hostile takeover. It must also be used if a company makes a stock offering, such as the exchange of securities for cash.
Hi_Lo
6 days ago
HQGE must be registered with the SEC (to get any corporate actions approved by the SEC/FINRA) through a Form S-4 (or Form 10) which HQGE can't do because it had its registration with the SEC terminated and still has missing financials from all of 2022, 2023 and the 2024 quarterly report.
https://www.otcmarkets.com/filing/html?id=8880161&guid=4lO-kanF-sRSJth
https://www.investopedia.com/terms/s/sec-form-s-4.asp#:~:text=Companies%20file%20this%20form%20to,remain%20compliant%20with%20financial%20regulators.
SEC Form S-4: Definition, Purpose, and Filing Requirements
By
WILL KENTON
Updated January 22, 2024
Reviewed by
CHARLENE RHINEHART
Part of the Series
Guide to Mergers and Acquisitions
What Is SEC Form S-4?
SEC Form S-4 is filed by a publicly traded company with the Securities and Exchange Commission (SEC). SEC Form S-4 is required to register any material information related to a merger or an acquisition. The form is also filed by companies undergoing an exchange offer, where securities are offered in place of cash. There are some key details that companies must include on the form, including their registered name and the area where they are incorporated.
KEY TAKEAWAYS:
• SEC Form S-4 is filed by a publicly traded company to register any material information related to a merger, acquisition, or stock offering.
• The SEC requires that Form S-4 contain information regarding the terms of the transaction, risk factors, ratios, pro-forma financial information, and material contracts with the company being acquired.
• Companies seeking a hostile takeover of another company must file form S-4 in the interests of public disclosure.
Understanding SEC Form S-4
SEC Form S-4 is known as the Registration Statement under the Securities Exchange Act of 1933. Public or reporting companies must submit Form S-4 to the SEC whenever they are involved in a merger, acquisition, or stock exchange offer. The SEC reviews the information to ensure that the transaction is legal and able to proceed.
For merger and acquisition (M&A) transactions, the SEC requires that Form S-4 contain information regarding several factors, including the:
• Terms of the transaction
• Risk factors
• Ratio of earnings to fixed charges and other ratios
• pro-forma financial information
• Material contracts with the company being acquired
• Additional information required for reoffering by persons and parties deemed to be underwriters
• Interests of named experts and counsel
When completing SEC Form S-4, a company must include its registered name, jurisidiction of incorporation, classification code number, employer identification number (EIN), address and names of the principal executive officers, and the name and details of the service agent. Other details include the date of the proposed sale and the company's filer status.1
M&A activity happens when companies want to expend, unite efforts, move into new segments, or maximize stakeholder value. After the transaction is complete, new shares are distributed to the shareholders of both merging companies. An exchange offer usually happens in bankruptcy cases, when a firm or financial entity exchanges securities for similar ones at less rigid terms.
SEC Form S-4.
Special Considerations
All mergers require SEC Form S-4 filing. For example, here are five typical types of mergers:
• Conglomerate Mergers: These mergers involve two unrelated companies in terms of business who join to expand their current markets.
• Congeneric Mergers: In this type of merger, the companies occupy the same market. The merger creates efficiencies or economies of scale because the companies may use the same raw materials, technology, and research and development (R&D) processes.
• Market Extension Mergers: The companies that are merging may have similar products operating in different markets. The goal for all parties is to expand into new markets.
• Horizontal Mergers: The merging parties are competitors within the same industry. The goal of the merger is to expand market share.
• Vertical Mergers: Vertical mergers occur for supply chain reasons. One company is typically a supplier to the other, and the merger reduces the costs of the final product.
The Securities Exchange Act of 1933, often referred to as the truth in securities law, requires that these registration forms provide essential facts and are filed to disclose important information upon registration of a company's securities.
What Do Companies Use SEC Form S-4?
Companies must file Form S-4 with the Securities and Exchange Commission whenever they are about to go through a merger or acquisition transaction. It is also used to alert the financial regulator when companies tender a stock offering. For instance, they must file the form when they offer securities in place of cash. The SEC uses the form to determine the legality of the transaction.
Where Do You File SEC Form S-4?
SEC Form S-4 is filed with the Securities and Exchange Commission. Companies file this form to register information about mergers, acquisitions, or stock offerings with the regulator.
Do All Mergers Require an SEC Form S-4 Filing?
Yes, all mergers that involve public companies require the filing of an SEC Form S-4. Types of mergers include conglomerate, congeneric, market extension, horizontal, and vertical mergers. The SEC uses the information provided to ensure that the transaction is permitted.
The Bottom Line
Public companies in the United States are required to submit regular filings to remain compliant with financial regulators. They must also submit forms whenever there are key changes in their businesses. SEC Form S-4 is completed and filed with the SEC whenever companies undergo a merger or acquisition, including a hostile takeover. It must also be used if a company makes a stock offering, such as the exchange of securities for cash.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
Ask ADVFN Intelligence (AI)
Kjv
1 day ago
Lime Time
2 days ago
JMoneyHoops
6 days ago
Hot Features
Premium
