April 7, 2005
I believe the Commissions proposed reforms in this area to be entirely appropriate.
I suggest that the final rules clarify the disclosure rules that would apply under the Form 8-K amendment following a reverse merger. In the case of a back-door registration, the literal application of the non-financial disclosure rules appears to require, for example, that executive compensation information should be provided with respect to the shell, rather than the acquired operating company. Thus, the rules appear to require disclosure of the three-year history of the shells executives salaries and bonuses, which is not only essentially meaningless, but very likely already has been reported, insofar as the shell has kept its Exchange Act reports current.
I believe that all the rules covering non-financial disclosure that would be required under the amended Form 8-K, as well those applicable under current rule 14f-1, should be reviewd from this perspective.