Pink Sheet to Bulletin Board Sarbox Reqs 2340



  • We are a pink sheet company in the midst of attempting to migrate to the bulletin board in the near future. Is there a grace period between actually being listed on the BB and having to be Sarbox Compliant/filing our first Sarbox Compliance report? Thanks for all your help.
    David



  • Here are the SEC regulations -
    We are adopting amendments to provide that a registrant need not comply with the internal control over financial reporting requirements ˜˜until it either had been required to file an annual report pursuant to section 13(a) or 15(d) of the Act for the prior fiscal year or had filed an annual report with the Commission for the prior fiscal year.’’ The amendments require a newly public company to fully comply with the internal control over financial reporting requirements when filing its second annual report with the Commission, allowing a company at least one annual reporting period from the time it becomes a public company to prepare for compliance. A newly public company also need not comply with the provisions of Exchange Act Rule 13a 15(d) or 15d15(d), requiring an evaluation of changes to internal control over financial reporting requirements, or comply with the provisions of Exchange Act Rule 13a15(a) or 15d15(a) relating to the maintenance of internal control over financial reporting until the first periodic report due after the first annual report that must include management’s report on internal control over financial reporting.
    Unfortunately, other small, public companies have had a few years to think about their approach prior to filing. It looks like you will have the first year free and then fall under the internal controls assessment requirements. This is not a big deal, but you need to realize that it will take more resources than you think it will in order to get through your first compliance year. I would suggest starting now and go through a dry run during your first year as a public company in order to be prepared for your first compliance year.



  • Thanks for the help. Do you happen to know what rule number that is? I need to challenge our external auditor on this. Thanks again for the help.
    David



  • Here is a link to the SEC rule - http:// w w w .sec.gov/rules/final/2006/33-8760.pdf


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