s-x rule 3-12 age of financial stmts

Accounting Research Manager SEC Practice\07. SEC Rules, Regulations and Releases Regulation S-X Interpretations and Guidance Age of Financial Statements

RegS-X.I.Rule3-12. Age of Financial Statements OVERVIEW [1] Regulation S-X requires that the financial statements presented in a filing be current, i.e., they must be as of a date that is within a certain number of days of the date of a registration statement or proxy. The financial statements must be current at the date on which the registration statement is filed ("filing date"), as well as the date on which the registration statement becomes effective ("effective date"). Financial statements that are not current under the SEC's rules are often referred to as "stale" and thus require "updating." Financial statements that are current at the time a registration statement is filed but become stale prior to the effective date typically are updated by means of an amendment to the registration statement. [2] The SEC has several rules governing the age of financial statements in a filing. Rule 3-01 of Regulation S-X indicates that the most recent balance sheet presented in a filing (other than a filing on Form 10-K or Form 10 ) must be within a certain number of days of the filing. Rule 3-02 indicates that interim statements of income and cash flows need to be provided for any interim period between the latest audited balance sheet and the most recent balance sheet required by Rule 10-01 . Rule 3-12 provides guidance on the age of financial statements at the effective date of a registration statement (e.g., Form S-1 or F-1 ) or at the mailing date of a proxy statement. Small business issuers should refer to the requirements of Regulation S-B, Item 310(g) - Age of Financial Statements . Foreign registrants are governed by separate requirements contained in Item 8 of Form 20-F and are not discussed in this section. [3] The SEC staff has been instructed not to commence the review of a filing unless it complies fully, as of the date of filing, with the rules for the age of financial statements. In certain circumstances, the SEC staff will consider special processing needs, but the registrant is expected to discuss the situation with the SEC staff in advance of the filing. [ADRP.T.One.II.A. - Staff Review ] [4] In 2002, the Commission initiated rules that require accelerated filing dates for the quarterly and annual financial information of certain domestic registrants. The rules phase in the accelerated due dates over a transition period for accelerated filers. An accelerated filer:

� Has a public float of $75 million or more;

� Has been subject to the Exchange Act reporting requirements for at least 12 months;

� Has filed at least one annual report; and

� Has no eligibility to use the SEC’s special forms for small business registrants.

By 2007, when the rules are fully implemented, quarterly financial information on Form 10-Q is due within 40

Accounting Research Manager ® - Audit Public

of 15Accounting Research Manager ® -- RegS-X.I.Rule3-12.

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days of quarter end for all accelerated filers. Annual financial information on Form 10-K is due within 75 days for regular accelerated filers (i.e., accelerated filers with market float of between $75 million and $700 million) and 60 days of year end for large accelerated filers (i.e., accelerated filers with market float of $700 million or more). These accelerated filing requirements for periodic reports in turn affect the age of financial statements in registration statements. (For further information about accelerated filing requirements for periodic reports, refer to the interpretations of Form 10-K [Due Dates and Transition Reports ].) [5] Numerous questions have been asked about whether financial statements are "current" in a particular situation and when updated financial statements are required to be presented. These questions include issues faced by registrants subject to the Commission’s accelerated filing requirements (referred to as “accelerated filers”). For example, this section addresses questions about the age of financial statements in transactions that involve the acquisition of a non-accelerated filer by an accelerated filer. The following section is organized as follows:

� Summary of Requirements Related to Age of Financial Statements

� Examples to Illustrate Age of Financial Statements - Rules 3-01 and 3-12

� Business Acquired or to Be Acquired

� Special Considerations

SUMMARY OF REQUIREMENTS RELATED TO AGE OF FINANCIAL STATEMENTS [6] The following table summarizes:

� When financial statements of a recently completed fiscal year must be furnished and

� The related requirements for including financial statements for SEC filings of domestic registrants.

� For purposes of determining the age of the financial statements, "days" refers to "calendar days."

� Footnotes to the table explain how these requirements apply to accelerated filers, i.e., registrants subject to the Commission’s accelerated filing rules.

Overview of Requirements Age of Financial Statements

When the filing date, effective date, or proposed mailing date is:

Then the following financial statements are required:

Within 45 days after fiscal year end, and the latest fiscal year audited statements are not available

� Audited consolidated balance sheet for the two fiscal year ends preceding the recently completed fiscal year

� Audited statements of income, cash flows, and shareholders' equity for each of the three fiscal years preceding the recently completed fiscal year

� Unaudited interim balance sheet as of a date less

than 1351 days prior to the filing or effective date. The unaudited interim balance sheet filed by a


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repeat issuer (i.e., a company that is already an Exchange Act registrant) must be as current as the most current balance sheet filed on Form 10-Q .

� Comparative year-to-date unaudited statements of income and cash flows for the interim period between the date of the most recent audited balance sheet presented and the date of the most recent interim balance sheet being filed

From 46 days to within 902 days (i.e., up to and

including the 89th2 day) of latest fiscal year end, audited financial statements for that year are not available, and the conditions of Rule 3-01(c) are met

� Audited consolidated balance sheet for the two fiscal year ends preceding the recently completed fiscal year

� Audited statements of income, cash flows, and shareholders' equity for each of the three fiscal years preceding the recently completed fiscal year

� Unaudited interim balance sheet at least as current as the end of the third fiscal quarter of the registrant's most recently completed fiscal year


From 46 days to within 902 days (i.e., up to and

including the 89th2 day) of latest fiscal year end, audited financial statements for that year are not available, and the conditions of Rule 3-01(c) are NOT met

� Audited consolidated balance sheet as of the two most recently completed fiscal year ends

� Audited statements of income, cash flows, and shareholders' equity for each of the most recent three fiscal years

Within 902 days after fiscal year end, and audited financial statements for latest fiscal year are available


� Audited statements of income, cash flows, and shareholders' equity for each of the most recent three fiscal years

More than 903 days, but less than 1351 days, of latest fiscal year end


� Audited statements of income, cash flows and shareholder's equity for each of the most recent three fiscal years

1351 days or more subsequent to latest fiscal year end � Audited consolidated balance sheet as of the two most recently completed fiscal year ends

� Audited statements of income, cash flows, and


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1 – 130 days for large accelerated filers and accelerated filers; and

– 135 days for all other registrants.

2 – 60 days (up to and including the 59th day) for fiscal years ending on or after December 15, 2006 for large accelerated filers;

– 75 days (up to and including the 74th day) for large accelerated filers for fiscal years ending before December 15, 2006;

– 75 days (up to and including the 74th day) for accelerated filers; and

– 90 days (up to and including the 89th day) for all other registrants.

3 – 60 days for fiscal years ending on or after December 15, 2006 for large accelerated filers;

– 75 days for fiscal years ending before December 15, 2006 for large accelerated filers;

– 75 days for accelerated filers; and


[7] Relief for Repeat Issuers - An existing registrant may file a registration statement more than 45 days but less

than 902 days after its fiscal year end (or have a registration statement declared effective during this period) without including audited financial statements for the most recent fiscal year if the registrant meets all the following criteria specified in Rule 3-01(c) :

2 – 60 days (up to and including the 59th day) for fiscal years ending on or after December 15, 2006 for large accelerated filers;

– 75 days (up to and including the 74th day) for large accelerated filers for fiscal years ending before December 15, 2006;

shareholders' equity for each of the most recent three fiscal years

� Unaudited interim balance sheet as of a date less

than 1351 days prior to the filing or effective date. The unaudited interim balance sheet filed by a repeat issuer (i.e., a company that is already an Exchange Act registrant) must be as current as the most current balance sheet filed on Form 10-Q .



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– 75 days (up to and including the 74th day) for accelerated filers; and

– 90 days (up to and including the 89th day) for all other registrants.

� The registrant files annual, quarterly, and other reports pursuant to Section 13 or Section 15(d) of the 1934 Act, and all reports due have been filed.

� For the most recent fiscal year for which audited financial statements are not available, the registrant reasonably and in good faith expects to report income, after taxes but before extraordinary items and cumulative effect of a change in accounting principle.

� For at least one of the two fiscal years immediately preceding the most recent fiscal year, the registrant reported income, after taxes but before extraordinary items and cumulative effect of a change in accounting principle.

For a commercial company reporting under Article 5 of Reg. S-X, the income after taxes but before extraordinary items and cumulative effect of a change in accounting principle amount used in the tests discussed above corresponds to Rule 5-03.16 of Reg. S-X. As a result, income, as defined, includes the impact of discontinued operations. Similarly, a bank holding company reporting under Article 9 or an insurance company reporting under Article 7 would use the amounts reported under Rule 9-04.17 or Rule 7-04.14 of Reg. S-X, respectively, to determine whether it meets the tests in Rule 3-01(c). This differs from the amount used by S-B filers for the purposes of determining whether a registrant has had or expects to have income under Item 310(g)(2) of Reg. S-B. See SmallBus.B.Introduction. for guidance applicable to S-B filers. If the registrant fails to meet any one of the above criteria, then the registration statement must include audited financial statements for the most recently completed fiscal year. Note also that this relief is available only to existing registrants (a new registrant could not meet the first criterion). [ADRP.T.One.II.B.1.c. - Year end Rule for Repeat Filers ]

[8] Updating - If the financial statements in a filing are as of a date 1351 days or more prior to the date on which the filing is expected to become effective (or the proposed mailing date in the case of a proxy statement), the financial statements must be updated to include:



� A balance sheet as of an interim date within 1351 days; and



� Statements of income and cash flows for the interim period between the end of the most recent fiscal year and the date of the interim balance sheet provided and for the corresponding period of the preceding fiscal year. The most recent interim financial statements filed by a repeat issuer must be at least as current as the most recent financial statements filed with the SEC staff on Form 10-Q .

[9] If audited financial statements for the most recent fiscal year are not included in a filing but do become available prior to the anticipated effective date (or the proposed mailing date for proxy or information statements), the filing must be updated to include those statements.


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EXAMPLES TO ILLUSTRATE AGE OF FINANCIAL STATEMENTS - RULES 3-01 AND 3-12 [10] The following discussion illustrates the application of the SEC's rules related to the age of financial statements in initial public offerings as well as offerings by existing registrants. The application of these rules to accelerated filers is contained in the footnotes to the examples.

� General rule A registration statement cannot be filed or be declared effective on or after the 135th4 day after the date of the latest balance sheet in the filing. In other words, a registration cannot be filed or be declared

effective later than the 134th4 day after the latest balance sheet date. This situation is illustrated in Example 1 below.

4 - 130 days for large accelerated filers and accelerated filers (up to and including the 129th day); and

- 135 days for all other registrants (up to and including the 134th day).

� Special year end rule At the end of a registrant's fiscal year, third-quarter data is considered timely up to and on the 45th day after the most recent fiscal year end, after which that fiscal year must be audited. In other words, audited annual financial statements for that fiscal year should be presented in the registration statement if the registration statement is filed or declared effective on or after the 46th day following the registrant's fiscal year end. Note that the 45 day special year end rule applies to all filers, including accelerated filers. This situation is illustrated in Example 2 below.

� For purposes of determining the age of the financial statements, "days" refers to "calendar days."

[11] In reviewing the following examples, note the following: (a) Small Business Registrants in an IPO - Separate rules apply to small business registrants in an initial public offering (IPO) when the registration statement is filed or goes effective after the end of the registrant's fiscal year but before audited financial statements for that most recent year are available. See Regulation S-B, Item 310(g) - Age of Financial Statements . This situation is not illustrated below. (b) Foreign Registrants - Separate rules apply to registration statements for foreign private issuers. See Item 8 of Form 20-F. This situation is not illustrated below. (c) Combination Form S-4 / Proxy - The age of financial statements is determined with reference to the date of effectiveness of the Form S-4 , rather than the date of mailing of the proxy, unless mailing is delayed beyond the time necessary to prepare the material for mailing. [ADRP.T.One.II.B.1.h. - Combination Form S-4/Proxy ] This situation is not illustrated below. (d) Form 10 - The guidance applicable to registration statements is applicable to financial statements in a Form 10

(Form 20-F if a foreign private issuer) on its effective date. (e) Repeat Issuer and Basic Rule - As an accommodation to existing registrants that have filed required reports for the most recent 12 months on a timely basis, the SEC staff will not decline to accelerate the effectiveness of a registration statement so long as the interim financial statements in the filing are at least as recent as the quarterly information that was filed under the Exchange Act at the time of effectiveness. However, an issuer requesting to

go effective after the 134th5 day but before filing its Form 10-Q must confirm to the SEC staff that the quarterly report will be timely filed after effectiveness and that there have been no material trends, events, or transactions that arose after the date of the latest balance sheet included in the filing that would materially affect an investor's understanding of the registrant's financial condition and results of operations. [ADRP.T.One.II.B.1.e. -


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Accommodations for Timely Filers] This situation is illustrated in Example 3 below.

5 - after the 129th day for large accelerated filers and accelerated filers; and

- after the 134th day for all other registrants.

(f) Repeat Issuer and Special Year End Rule - A company that is already a registrant and is filing periodic reports under the 1934 Act potentially can avail itself of an accommodation that permits a registration statement to be made effective later than 45 days after the company's fiscal year end even if audited financial statements for the most recent year end are not available. See Rule 3-01(c) of Regulation S-X. This situation is illustrated in Example 4 below. (g) Effect of Holiday or Weekend - If the last day of the period after which financial statements must be updated

(that is, the 134th day at the first, second, or third quarter-end, or the 45th or 89th6 day following fiscal year end) falls on a Saturday, Sunday, or holiday, the filing may be made on the next following business day without updating the financial statements. See Regulation C, Rule 417 . This rule is illustrated in Example 5 below.

6 – 129th day at the first, second or third quarter end, or the 45th or 59th day for large accelerated filers for fiscal years ending on or after December 15, 2006;

– 129th day at the first, second or third quarter end, or the 45th or 74th day for large accelerated filers for fiscal years ending before December 15, 2006;

– 129th day at the first, second or third quarter end, or the 45th or 74th day for accelerated filers;

– 134th day at the first, second or third quarter end, or the 45th or 89th day for all other registrants.

(h) Filing Date vs. Effective Date - The financial statements contained in a registration statement must be current both when the registration statement is filed and when it goes effective. If a registration statement is filed with stale financial information, the SEC staff will not deem the filing complete and will not commence review until the registration statement complies fully with the rules for age of financial statements at the date of filing. [ADRP.T.One.II.B. - Age Requirements ]

Example 1: General Rule - IPO and 135-Day Rule The registrant's year end is December 31. The registrant is preparing a 1933 Act registration statement on Form S-1 for an initial public offering (IPO) in late May 2008. The registration statement includes audited financial statements for 2007, 2006, and 2005; the unaudited interim balance sheet as of March 31, 2008; and unaudited interim income and cash flow statements for the three months ended March 31, 2008 and 2007. If the registrant files an amendment or goes effective on the registration statement on or before August 12, 2008 (134th day), those financial statements will be sufficient. Past that date, the registrant will be required to update the financial information to include later unaudited information. Note 1: The 135 day rule that governs in this IPO situation is not the same as the rule related to the due dates for quarterly information on a Form 10-Q under the 1934 Act. An existing non-accelerated registrant filing a Form 10-Q for the quarter ended June 30, 2008, would have until August 14, 2008, to file its updated financial information. But in an IPO situation, the March 31 financial statements are stale if the registration statement is filed or goes effective on or after the 135th day following March 31 (August 13, 2008 in this example).


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Note 2: The accelerated filer rules do not apply in an IPO, regardless of the size of the expected offering. Among the criteria for accelerated filers is that the registrant has been reporting for at least 12 months and has previously filed at least one annual report. A company that is registering its securities for the first time will not meet these criteria.

Example 2: Special Year end Rule - IPO and 45-Day Rule The registrant's year end is December 31. The registrant is preparing a 1933 Act registration statement on Form S-1 for an IPO in late November 2006. The registration statement includes audited financial statements for 2005, 2004, and 2003; the unaudited interim balance sheet as of September 30, 2006; and unaudited interim income and cash flow statements for the nine months ended September 30, 2006 and 2005. If the registrant files an amendment or goes effective on the registration statement on or before February 14, 2007 (45th day after year end), those financial statements will be sufficient. Past that date, the registrant will be required to update the financial information to include the audited financial statements as of December 31, 2006. Note that the exception available in Rule 3-01(c) of Regulation S-X is not available to a first-time registrant. However, if a first-time registrant is a small business issuer, the exception is available under Item 310(g) of Regulation S-B.

Example 3: General Rule - Repeat Issuer and Accommodation on 1357 (130)-Day Rule

The registrant is not an accelerated filer and its year end is July 31. The registrant is required to, and has filed, its periodic reports under the 1934 Act for the most recent 12 months on a timely basis. Its quarter-ends are October 31, January 31, and April 30. The registrant files a 1933 Act registration statement in December 2006. The registration statement includes or incorporates by reference audited financial statements for July 31, 2006, 2005, and 2004; the unaudited interim balance sheet as of October 31, 2006; and unaudited interim income and cash flow statements for the three months ended October 31, 2006 and 2005. If the registration statement is made effective on or before March 14, 2007 (134th day), those financial statements will be sufficient. Past that date, the registrant ordinarily would be required to update the financial information to include January 31, 2007, unaudited information. However, the registrant may ask the SEC staff to accelerate effectiveness to permit going effective after March 14, 2007 (134th day) but before filing its Form 10-Q (due on March 19, 2007, the first business day after the 45th day post the January 31 quarter-end). The SEC staff will grant this request if the registrant confirms to the staff that the January 31 quarterly report will be timely filed after effectiveness and that there have been no material trends, events, or transactions that arose after the date of the latest balance sheet included in the filing that would materially affect an investor's understanding of the registrant's financial condition and results of operations.



Example 4: Special Year end Rule - Repeat Issuer and 45-Day Rule The registrant is a regular accelerated filer and its year end is December 31. The registrant is required to, and has filed, all periodic reports due under the 1934 Act. The registrant is preparing a 1933 Act registration statement (other than an IPO) in December 2007. The registration statement includes audited financial statements for 2006, 2005, and 2004; unaudited interim balance sheet as of September 30, 2007; and unaudited interim income and cash flow statements for the nine months ended September 30, 2007 and 2006. If the registrant files or goes effective on the registration statement on or before February 14, 2008 (45-day rule), those financial statements will be sufficient. Past that date, the registrant ordinarily will be required to update the financial information to


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The following examples address how the acceleration rules affect registration statements that include a significant acquisition. The date at which financial statements are considered “stale” (and thus must be updated) has changed for accelerated filers but not for other entities.

include the audited financial statements as of December 31, 2007. However, if the registrant (a) reasonably expects to report income (after tax but before extraordinary items and cumulative effect of changes in accounting) for the year ended December 31, 2007 and (b) during either calendar 2006 or 2005, it reported income (after tax but before extraordinary items and cumulative effect of changes in accounting), then it meets the criteria in Rule 3-01(c) of Regulation S-X. Therefore, the registration statement will be permitted to go

effective on or before March 14, 2008 (74th8 day) without the inclusion of audited financial statements for the year ended December 31, 2007. Note, however, that under Rule 3-12 of Registration S-X, the registrant is expected to file the audited financial statements as soon as they are available. Rule 3-01(c) of Regulation S-X requires the registrant to have filed all required reports under the 1934 Act but does not require such reports to have been filed timely.

8 – 59th day for large accelerated filers for years ending on or after December 15, 2006;

– 74th day for large accelerated filers for years ending before December 15, 2006;

– 74th day for accelerated filers; and

– 89th day for all other registrants.

Example 5: Effect of Holidays and Weekends The registrant is not an accelerated filer and its year end is December 31. The registrant is preparing a registration statement on a Form S-3 that is being filed in July 2007. The registration statement incorporates by reference audited financial statements for 2006, 2005, and 2004; an unaudited interim balance sheet as of June 30, 2007; and unaudited interim income and cash flow statements for the six months ended June 30, 2007 and 2006.

The 134th9 day in this case is November 11, 2007, a Sunday; the first weekday is November 12, Veteran's Day observed, a Federal holiday. Thus, because of Rule 417 of Regulation C, the following business day, Tuesday, November 13, 2007, is treated as the 134th day. Hence, the financial statements included in the registration statement will go stale on November 14, 2007.

9 - after the 129th day for large accelerated filers and accelerated filers; and

- after the 134th day for all other registrants.

Example 6: Accelerated Filer Acquires a Private Company and an Accelerated Filer Public Company In this fact pattern, Registrant A, an accelerated filer with a calendar year end, anticipates that its Form S-3 will be declared effective on August 11, 2008. This is 133 days after the March quarter ended. Under the accelerated filer rules, the March data becomes “stale” at 130 days. Therefore, Registrant A should include June 30, 2008 quarterly information in the Form S-3 at the effective date. Registrant A is acquiring Company PR, a private company with a calendar year end. The acquisition is significant and Company PR’s financial statements are required in Registrant A’s Form S-3. The Form S-3 presents March 31, 2008 quarterly financial statements for Company PR. Because Company PR is not an


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BUSINESS ACQUIRED OR TO BE ACQUIRED [12] 1933 Act Filing or Proxy Statement – For year end acquiree financial statements that are significant under Regulation S-X, Rule 3-05 , in a 1933 act filing or proxy statement:

10 - after the 59th day for large accelerated filers for fiscal years ending on or after December 15, 2006;

- after the 74th day for large accelerated filers for fiscal years ending before December 15, 2006;

- after the 74th day for accelerated filers; and

accelerated filer, its financial statements don’t become stale until 135 days (August 13, 2008). Consequently, Company PR’s financial statements would not need to be updated at effective date. Registrant A is also acquiring Registrant PU, a public company that is an accelerated filer with a calendar year end. The acquisition is significant and Registrant PU’s financial statements are required in Registrant A’s Form S-3 . The Form S-3 presents March 31, 2008 quarterly financial statements for Registrant PU. Because Registrant PU is an accelerated filer, the March data becomes stale at 130 days. Registrant PU’s June 30, 2008 quarterly information would need to be included in the Form S-3 at effective date.

Example 7: Non-accelerated Filer Acquires a Private Company and an Accelerated Filer Public Company In this fact pattern, Registrant B, a non-accelerated filer with a calendar year end, anticipates that its Form S-3 will be declared effective on August 11, 2008. This is 133 days after the March quarter ended. Because Registrant B is not an accelerated filer, its financial statements don’t become stale until 135 days (August 13, 2005). Therefore, Registrant B does not need to include June 30, 2005 quarterly information in the Form S-3 at effective date. Registrant B is acquiring Company VA, a private company with a calendar year end. The acquisition is significant and Company VA’s financial statements are required in Registrant B’s Form S-3. The Form S-3 presents March 31, 2008 quarterly financial statements for Company VA. Because PR is not an accelerated filer, its financial statements don’t become stale until 135 days (August 13, 2008). As a result, Registrant B’s quarterly financial statements would not need to be updated at effective date. Registrant B is also acquiring Registrant BLIC, a public company with a calendar year end. The acquisition is significant and Registrant BLIC’s financial statements are required in Registrant B’s Form S-3. The Form S-3 presents March 31, 2008 quarterly financial statements for Registrant BLIC. Because Registrant BLIC is an accelerated filer, its financial statements become stale at 130 days and require updating at effective date. Registrant BLIC’s June 30, 2008 quarterly financial statements are required whereas Registrant B’s are not because of their differing accelerated filer status.

Effective Date of Filing Acquiree Financial Statements

Filing is made effective after 89th10 day after acquiree’s fiscal year end

Acquiree’s most recent fiscal year must be audited

Registrant’s filing is made effective after 45 days but

within 9011 of the acquiree’s fiscal year end

Updating requirement dependent on the registrant’s (not the acquiree’s) eligibility for relief under Regulation S-X, Rule 3-01(c) .


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- after the 89th day for all others.

11 - after 45 days but within 60 days (up to and including the 59th day) for large accelerated filers for fiscal years ending on or after December 15, 2006;

- after 45 days but within 75 days (up to and including the 74th day) for large accelerated filers for fiscal years ending before December 15, 2006;

- after 45 days but within 75 days (up to and including the 74th day) for accelerated filers; and

- after 45 days but within 90 days (up to and including the 89th day) for all others.

In the case of a reverse acquisition, the SEC staff looks to the ability of the accounting acquirer to meet the criteria in Rule 3-01(c). [ADRP.T.Two.I.F.1. - Age of Financial Statements of Companies Acquired or To Be Acquired ] Examples 8 and 9 below address how the accelerated filer rules affect registration statements that include the financial statements of a target company that is significant under Rule 3-05 of Regulation S-X. The date at which the registrant’s and the target’s financial statements are considered “stale” (and thus must be updated) will depend on whether each company meets the accelerated filer rules. Examples 10 and 11 address how the special year end rules for a repeat issuer under Rule 3-01(c) of Regulation S- X (see [11] (f) above) affect the age of financial statements for both the registrant and the target.

Example 8: Age of Financial Statements for Accelerated Filer and Two Acquired Companies in a Registration Statement Registrant A, an accelerated filer with a calendar year end, anticipates that its Form S-3 will be declared effective on November 10, 2008. This is 133 days after the June quarter ended. Under the accelerated filer rules, the June data becomes “stale” at 130 days. Therefore, Registrant A must include its September 30, 2008 unaudited interim financial statements in the Form S-3 prior to the registration statement becoming effective. Registrant A is acquiring Company PR, a private company with a calendar year end. The acquisition is significant under Rule 3-05 of Regulation S-X. As such, Company PR’s financial statements are required to be presented or incorporated by reference in Registrant A’s Form S-3. Because Company PR is not an accelerated filer, the Form S-3 includes Company PR’s unaudited interim financial statements as of June 30, 2008. Company PR’s June 30, 2008 interim financial statements do not become stale until 135 days (November 13, 2008 as November 11 is a Federal holiday) and need not be updated prior to the registration statement becoming effective on November 10, 2008. Registrant A is also acquiring P, a public company with a calendar year end. The acquisition is significant under Rule 3-05 of Regulation S-X. Because Company P is an accelerated filer, Registrant A’s Form S-3 must include the September 30, 2008 unaudited interim financial statements for Company P. As an accelerated filer, P’s June 30, 2008 statements became stale at 130 days.

Example 9: Age of Financial Statements for Non-accelerated Filer and Two Acquired Companies in a Registration Statement This fact pattern is similar to Example 8 except that the registrant does not meet the criteria to be an accelerated filer. Registrant B, a non-accelerated filer with a calendar year end, anticipates that its Form S-3 will be declared


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effective on November 10, 2008. This is 133 days after the June 30 quarter end. Because Registrant B is not an accelerated filer, its financial statements do not become stale until 135 days (November 13, 2008 as November 11 is a Federal holiday). Therefore, Registrant B does not need to include its September 30, 2008 unaudited interim financial statements in the Form S-3 prior to the registration statement becoming effective on November 10, 2008. Registrant B is acquiring Company VA, a private company with a calendar year end. The acquisition is significant under Rule 3-05 of Regulation S-X. As such, Company VA’s financial statements are required to be presented or incorporated by reference in Registrant B’s Form S-3. Because Company VA is not an accelerated filer, the Form S-3 includes Company VA’s June 30, 2008 unaudited interim financial statements. Company VA’s June 30, 2008 interim financial statements do not become stale until 135 days (November 13, 2008). Registrant B is also acquiring BLIC, a public company with a calendar year end. The acquisition is significant under Rule 3-05 of Regulation S-X. Because BLIC is an accelerated filer, its interim financial statements for the quarter ended June 30, 2008 became stale at 130 days and require updating prior to the Registrant B’s Form S-3 becoming effective on November 10, 2008. Thus the Form S-3 for Registrant B must include Registrant B’s June 30, 2008 interim financial statements and BLIC’s September 30, 2008 interim financial statements.

Example 10: Special Year End Rule - Large Accelerated 3-01(c) Filer Acquires a Private Company Registrant C is a large accelerated filer with a calendar year end. Registrant C meets the criteria of Rule 3-01(c) of Regulation S-X and anticipates that its Form S-3 will be declared effective on February 28, 2007. This is 59 days after year end. Under the special year end rules for a repeat issuer, Registrant C’s interim financial information as of September 30, 2006 becomes “stale” at 59 days. Therefore, Registrant C could go effective on February 28, 2007 without updating this interim information in the Form S-3. (Note that if the Form S-3 were declared effective on March 1, 2007 or later, then Registrant C’s audited year end December 31, 2006 financial statements would be required.) Registrant C is acquiring Company TE, a private company with a calendar year end. The acquisition is significant under Rule 3-05 of Regulation S-X. Company TE’s September 30, 2006 interim financial statements are incorporated by reference in Registrant C’s Form S-3. Because Registrant C meets the criteria of Rule 3-01(c), Registrant C’s Form S-3 may go effective prior to March 1, 2007 with September 30, 2006 interim financial statements of both Registrant C and Company TE. Company TE’s compliance with Rule 3-01(c) is not relevant. (Note that if the Form S-3 were declared effective on March 1, 2007 or later, as a private company that is not an accelerated filer, Company TE’s financial statements do not become stale until the 90th day - March 31, 2007).

Example 11: Special Year End Rule - Registrant that Fails 3-01(c) Acquires a Public Company Registrant D, a repeat issuer with a calendar year end, anticipates that its Form S-3 will be declared effective on February 15, 2007. Because Registrant D does not meet the criteria of Rule 3-01(c) of Regulation S-X, D’s September 30, 2006 interim financial statements become stale 46 days after year end. Accordingly, Registrant D must provide audited December 31, 2006 financial statements in the Form S-3 prior to the registration statement becoming effective. (Note that if the Form S-3 were declared effective on February 14, 2007, its September 30, 2006 interim financial statements would suffice.) Registrant D is acquiring Company UB, a public company with a calendar year end. The acquisition is significant under Rule 3-05 of Regulation S-X. Because Registrant D does not meet the criteria of Rule 3-01(c), Company UB would need to provide audited December 31, 2006 financial statements for inclusion in Registrant D’s Form S-3 that becomes effective after February 14, 2007. Company UB’s compliance with the criteria in Rule


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[13] In a 1933 Act environment, generally the unaudited financial statements of an acquired business need not be updated if the unaudited period is less than a complete quarter. For example, if an acquisition was consummated on September 29, the SEC staff generally would not require that the financial statements of an acquired entity be updated past June 30. However, disclosure of significant events occurring during the omitted interim period may be necessary. [ADRP.T.Two.I.F.2. - Age of Financial Statements of Companies Acquired or To Be Acquired ] [14] When SAB Topic 1J (SAB 80) is used to determine the significance of an acquired business, financial statements audited through the date of acquisition should be furnished if the registrant's financial statements for the year of the acquisition are required to be audited. [ADRP.T.Two.I.F.2. - Age of Financial Statements of Companies Acquired or To Be Acquired ] [15] Guidance on the age of financial statements of an acquired business included in a filing on Form S-3 or S-4 is included in the SEC Accounting Disclosure Rules and Practices Manual. However, because this guidance was issued prior to the Commission’s release on accelerated filings, care should be taken in applying this guidance to fact patterns in which either the target or the acquirer is an accelerated filer. [ADRP.T.Two.I.F.4. - Age of Financial Statements of Companies Acquired or To Be Acquired ] [16] 1934 Act Filings - The SEC staff has provided guidance regarding the age of financial statements in a Form 8-K in the SEC Accounting Disclosure Rules and Practices Manual. This guidance has not been updated by the SEC staff to reflect the Commission’s release on accelerated filers. Accordingly, care should be taken when applying this guidance to fact patterns in which either the target or the acquirer is an accelerated filer. [ADRP.T.Two.I.F.3. - Age of Financial Statements of Companies Acquired or To Be Acquired ] SPECIAL CONSIDERATIONS [17] Initial Form 10-K for New Registrant - Questions often arise about the due date of the first Form 10-K of a new registrant whose registration statement becomes effective shortly after the registrant's year end. In most cases, an initial registrant that "goes effective" after its year end and does not include the latest fiscal year's financial statements in the effective registration statement must file a complete Form 10-K (including audited financial statements for the last three fiscal years) within 90 days of year end.

In other words, no extension or delay in submitting the Form 10-K is available to a new registrant, except for that provided for in Rule 12b-25 and the special provision of Regulation 15D . A registrant that goes effective on an initial public offering of securities under Regulation 15D (a 15D filer) within 45 days after its latest year end is permitted a limited exception to the 90-day filing deadline. This exception, available to 15D filers only, is discussed further in Chapter 2, Form 10-K - Background, Modifications . [18] Changes in Year End - When the registrant has changed its year end, the transition period (the period from the end of the old fiscal year to the beginning of the new fiscal year) is viewed in the same manner as a full fiscal

3-01(c) is not relevant in this fact pattern because it is the target. Also, the accelerated filer status of Registrant D and Company UB are not relevant because the age of financial statement requirements of Rule 3-01(c) are more restrictive.

Example 12: Initial Form 10-K for New Registrant A registrant with a calendar year end files Form S-1 for an initial public offering in December 2006. The Form S-1 becomes effective on February 9, 2008. The registrant's audited financial statements for the year ended December 31, 2007, are not presented in the Form S-1. The due date for the registrant's Form 10-K for the year ended December 31, 2007, is March 31, 2008.


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year for purposes of determining the age of its financial statements in a registration statement [ADRP.T.One.III.E. - Changes in Fiscal Year ]. Thus, filings under the 1933 Act may require audited financial statements for the transition period more currently than filings under the 1934 Act. (Transition period reporting requirements under the 1934 Act are discussed in Form8-K.I.Item503.Reports. .) Two examples help illustrate this rule.

[19] Omissions of Statements That Will Not Be Required as of Effective Date - As a general rule, filings must include all financial statements required by the rules as of the filing date even though it is expected that some of the statements will be eliminated or updated before the registration statement becomes effective or the proxy or information statement is mailed. For example, a registrant may make a filing late in its current fiscal year with the intent of later amending it to include audited statements for that fiscal year. In this case, the filing would have to include, among other statements, interim statements for the current year even though those statements would not be included in the final registration statement. [20] Combination Form S-4 / Proxy - The age of financial statements is determined with reference to the date of effectiveness of the Form S-4 , rather than the date of mailing of the proxy, unless mailing is delayed beyond the time necessary to prepare the material for mailing. The SEC staff expects that no more than a few days are necessary to prepare proxy materials included in the final Form S-4 for mailing to shareholders. [ADRP.T.One.II.B.1.h. - Combination Form S-4/Proxy ] [21] Form 10 - The guidance applicable to registration statements is applicable to financial statements in a Form 10

(Form 20-F if a foreign private issuer) on its effective date. [ADRP.T.One.II.B.i. - Forms 10 and 10-SB]

Example 13: Change in Year End and Age of Financial Statements An accelerated registrant with a March 31, 2007 year end changes its fiscal year end to December 31, 2007. The registrant files a Form S-1 between January 1, 2008, and March 14, 2008. In this case, the registrant may use its audited financial statements for the three years ended March 31, 2007, and unaudited interim financial statements for the six months ended September 30, 2007, through March 14, 2008 (the 74th day after December 31, 2007). This example assumes that the registrant has met the criteria of Rule 3-01(c) .

Example 14: Change in Year End and Age of Financial Statements An accelerated registrant with a December 31, 2008 year end changes its fiscal year end to May 31, 2009. The registrant may continue using its December 31, 2008, audited financial statements through August 13, 2009 (the 74th day after the end of the transition period, which is viewed as the same as a fiscal year end for purposes of complying with the age of financial statements requirements of Article 3 of Reg. S-X in 1933 Act filings). For example, if the filing is made or becomes effective after May 31, 2009, but before August 14, 2009, it would include audited financial statements for the three years ended December 31, 2008 and unaudited financial statements for either the two months ended February 28, 2009 or the three months ended March 31, 2009 (together with the comparable prior year interim period). If the filing is made or becomes effective after August 13, 2009, it would include audited financial statements for the three years ended December 31, 2008 and the five months ended May 31, 2009; for the five months ended May 31, 2008, either full unaudited financial statements or income statement data consistent with the requirements of Exchange Act Rule 13a-10(b) would be included. This example assumes that the registrant has met the criteria of Rule 3-01(c).

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s-x rule 3-12 age of financial stmts

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