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General Issues Affecting Public Companies

    Accelerated Filer

When is a public company considered an accelerated filer?

A domestic company is an accelerated filer after it meets the following conditions as of the end of its fiscal year:

• Its common equity public float was $75 million or more as of the last business day of its most recently completed second fiscal quarter;
• It has been subject to the reporting requirements of Section 13(a) (periodic reporting under the 1934 Act) or 15(d) (registration and regulation of brokers and dealers: reporting requirements for issuers of registration statements filed pursuant to 1933 Act) of the Exchange Act for a period of at least 12 calendar months.
• It has previously filed at least one annual report pursuant to Section 13(a) or 15(d) of the Exchange Act; and
• It is not eligible to use Forms 10-KSB and 10-QSB (periodic reporting of small business issuers)

What are the reporting deadlines for an accelerated filer?

Accelerated filing rules are effective for companies who meet the definition of accelerated filer as of the end of their fiscal year ending on or after December 15, 2002 .

Three year phase-in period for annual and quarterly reports:

Annual Reports Deadline Quarterly Reports Deadline

Year 1: Remains at 90 days Year 1: Remains at 45 days

Year 2: 75 days Year 2: 40 days

Year 3 and thereafter: 60 days Year 3 and thereafter: 35 days

Disclosure requirements regarding web site access to reports for investors:

An accelerated filer must disclose in its annual report where investors can obtain access to its filings and whether the company provides access to it's Forms 10-K, 10-Q, and 8-K reports on its Internet web site free of charge, as soon as reasonably practicable after the reports are electronically furnished to the SEC.

Accredited Investor

What is an accredited investor?

Any of the following at the time the securities are sold:

•  Bank or savings and loan association; broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance company; investment company registered under the Investment Company Act of 1940; business development company as defined in section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state for the benefit of its employees with total assets in excess of $5,000,000; any employee benefit plan if the investment decision is made by a plan fiduciary or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors

(2) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

(3) Any 501(c)(3) organization of the Internal Revenue Code, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

(4) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

(5) Any natural person whose individual net worth, or joint net worth with spouse, at the time of his purchase exceeds $1,000,000;

(6) Any natural person with individual income in excess of $200,000 in each of the two most recent years or joint income with spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

(7) Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in § 230.506(b)(2)(ii) ; and

(8) Any entity in which all of the equity owners are accredited investors.

COSO

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has released for public comment an Enterprise Risk Management (ERM) Framework that details essential components and concepts of enterprise risk management for all organizations, regardless of size. The Framework also identifies the interrelationships between enterprise risk management and internal control.

The ERM Framework project was launched after consensus was reached on the need for a broadly recognized common structure for enterprise risk management. According to COSO Chairman John J. Flaherty, "Although this project was initiated before the developments leading to the Sarbanes-Oxley Act, the Framework speaks to many of the issues currently facing organizations." COSO is hopeful that many individuals and organizations will comment on the draft and ultimately adopt the final Framework.

The Framework is available for public comment until October 15, 2003 and can be accessed at www.erm.coso.org . Release of the final Framework and application guidance is expected in early 2004.

Regulation D

What is Regulation D?

Rules governing the limited offer and sale of securities without registration under the SEC Act of 1933.

Sarbanes-Oxley Section 404

When is the deadline for compliance with Section 404?

The SEC extended the compliance dates for which a public company must include in its annual report, a report by management on the company's internal control over financial reporting and the related auditor's report. The extended compliance dates are:

For an accelerated filer - must begin to comply for the fiscal year ending on or after November 15, 2004 (original compliance date was June 15, 2004 ).

Non-accelerated filer - must begin to comply for the fiscal year ending on or after July 15, 2005 (original compliance date was April 15, 2005 ).

Click here for more information on Sarbanes Oxley.