IPO Reporting Requirements

All publicly traded companies are required to file informational reports to the SEC on an ongoing basis. Until 1964, companies listed on a public exchange and companies that traded over-the-counter did not have the same registration and reporting requirements. While all companies issuing securities to the public had to file a registration statement with the SEC, only those listed on an exchange had to keep their registration information up to date with periodic reports. OTC issuers were relieved of that obligation, if the total value of their securities in any class did not exceed $2 million.

Many companies were happy to leave their OTC investors in the dark.

The 1964 Securities Acts Amendments closed that loophole. Today the exchange-traded and OTC markets operate under essentially the same rules. The amended Exchange Act requires that any issuer of public securities with at least $10 million in total assets and a class of security having at least 500 shareholders be held to the same registration requirements as the exchange-traded securities.

Similarly, the Securities Act exempts from registration any exchange-traded issue of less than $5 million in any 12-month period, as long as public solicitation or advertising is not used to market the securities. These issuers, however, are subject to the registration and reporting requirements of the Exchange Act, if the company exceeds $10 million in total assets and more than 500 shareholders in any class of security. The specific reports that reporting issuers must file with the SEC are discussed below.

Annual Reports: Form 10-K

Every publicly traded company must file an annual report with the SEC at the end of each fiscal year. In far greater detail than the annual report provided to shareholders, Form 10-K must describe the company’s business operations: its products and services, markets and sales, major competitors, and risks. It must record all outstanding shares