Special Purpose Acquisition Companies, Shell Companies, and Projections

<RULE> SECURITIES AND EXCHANGE COMMISSION <CFR>17 CFR Parts 210, 229, 230, 232, 239, 240, and 249</CFR> <DEPDOC>[Release Nos. 33-11265; 34-99418; IC-35096; File No. S7-13-22]</DEPDOC> <RIN>RIN 3235-AM90</RIN> <SUBJECT>Special Purpose Acquisition Companies, Shell Companies, and Projections</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Securities and Exchange Commission. <HD SOURCE="HED">ACTION:</HD> Final rules; guidance. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Securities and Exchange Commission (“Commission”) is adopting rules intended to enhance investor protections in initial public offerings by special purpose acquisition companies (commonly known as SPACs) and in subsequent business combination transactions between SPACs and private operating companies (commonly known as de-SPAC transactions). Specifically, we are adopting disclosure requirements with respect to, among other things, compensation paid to sponsors, conflicts of interest, dilution, and the determination, if any, of the board of directors (or similar governing body) of a SPAC regarding whether a de-SPAC transaction is advisable and in the best interests of the SPAC and its security holders. We are adopting rules that require a minimum dissemination period for the distribution of security holder communication materials in connection with de-SPAC transactions. We are adopting rules that require the re-determination of smaller reporting company (“SRC”) status in connection with de-SPAC transactions. We are also adopting rules that address the scope of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995. Further, we are adopting a rule that would deem any business combination transaction involving a reporting shell company, including a SPAC, to be a sale of securities to the reporting shell company's shareholders and are adopting amendments to a number of financial statement requirements applicable to transactions involving shell companies. In addition, we are providing guidance on the status of potential underwriters in de-SPAC transactions and adopting updates to our guidance regarding the use of projections in Commission filings as well as requiring additional disclosure regarding projections when used in connection with business combination transactions involving SPACs. Finally, we are providing guidance for SPACs to consider when analyzing their status under the Investment Company Act of 1940. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> The final rules are effective on July 1, 2024. <E T="03">Compliance date:</E> The compliance date for the final rules, other than 17 CFR 229.1610, is July 1, 2024. The compliance date for 17 CFR 229.1610 is June 30, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Mark Saltzburg, Office of Rulemaking, Division of Corporation Finance, at (202) 551-3430; with respect to 17 CFR 230.145a (Rule 145a under the Securities Act of 1933), the Office of Chief Counsel, Division of Corporation Finance, at (202) 551-3500; with respect to 17 CFR 210.15-01 (Rule 15-01 of Regulation S-X), Ryan Milne, Office of Chief Accountant, Division of Corporation Finance, at (202) 551-3400; with respect to amendments relating to projections disclosure and tender offer rules, Daniel Duchovny, Office of Mergers & Acquisitions, Division of Corporation Finance, at (202) 551-3440; and with respect to guidance under the Investment Company Act of 1940, Rochelle Kauffman Plesset, Seth Davis, or Taylor Evenson, Senior Counsels; or Lisa Reid Ragen, Branch Chief, Chief Counsel's Office, Division of Investment Management, at (202) 551-6825; U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The Commission is adopting new 17 CFR 210.15-01, new 17 CFR 229.1601 through 229.1610 (Item 1600 series of Regulation S-K), and new 17 CFR 230.145a. We are also adopting amendments to: <GPOTABLE COLS="2" OPTS="L2,tp0,p7,7/8,i1" CDEF="s50,r50"> <TTITLE> </TTITLE> <CHED H="1">Commission reference</CHED> <ENT>§ 230.405.</ENT> </ROW> <ROW> <ENT I="03">Form S-1</ENT> <ENT>§ 239.11.</ENT> </ROW> <ROW> <ENT I="03">Form F-1</ENT> <ENT>§ 239.31.</ENT> </ROW> <ROW> <ENT I="03">Form S-4</ENT> <ENT>§ 239.25.</ENT> </ROW> <ROW> <ENT I="03">Form F-4</ENT> <ENT>§ 239.34.</ENT> </ROW> <ROW> <ENT I="22">Securities Exchange Act of 1934</ENT> </ROW> <ROW> <ENT I="03">Rule 12b-2</ENT> <ENT>§ 240.12b-2.</ENT> </ROW> <ROW> <ENT I="03">Rule 14a-6</ENT> <ENT>§ 240.14a-6.</ENT> </ROW> <ROW> <ENT I="03">Rule 14c-2</ENT> <ENT>§ 240.14c-2.</ENT> </ROW> <ROW> <ENT I="03">Schedule 14A</ENT> <ENT>§ 240.14a-101.</ENT> </ROW> <ROW> <ENT I="03">Schedule TO</ENT> <ENT>§ 240.14d-100.</ENT> </ROW> <ROW> <ENT I="03">Form 20-F</ENT> <ENT>§ 249.220f.</ENT> </ROW> <ROW> <ENT I="03">Form 8-K</ENT> <ENT>§ 249.308.</ENT> </ROW> <ROW> <ENT I="01">Regulation S-K</ENT> <ENT>§§ 229.10 through 229.1406.</ENT> </ROW> <ROW> <ENT I="03">Item 10</ENT> <ENT>§ 229.10.</ENT> </ROW> <ROW> <ENT I="03">Item 601</ENT> <ENT>§ 229.601.</ENT> </ROW> <ROW> <ENT I="01">Regulation S-T</ENT> <ENT>§§ 232.10 through 232.903.</ENT> </ROW> <ROW> <ENT I="03">Rule 405</ENT> <ENT>§ 232.405.</ENT> </ROW> <ROW> <ENT I="01">Regulation S-X</ENT> <ENT>§§ 210.1-01 through 210.13-02.</ENT> </ROW> <ROW> <ENT I="03">Rule 1-02</ENT> <ENT>§ 210.1-02.</ENT> </ROW> <ROW> <ENT I="03">Rule 3-01</ENT> <ENT>§ 210.3-01.</ENT> </ROW> <ROW> <ENT I="03">Rule 3-05</ENT> <ENT>§ 210.3-05.</ENT> </ROW> <ROW> <ENT I="03">Rule 3-14</ENT> <ENT>§ 210.3-14.</ENT> </ROW> <ROW> <ENT I="03">Rule 8-02</ENT> <ENT>§ 210.8-02.</ENT> </ROW> <ROW> <ENT I="03">Rule 10-01</ENT> <ENT>§ 210.10-01.</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Introduction</FP> <FP SOURCE="FP-2">II. New Subpart 1600 of Regulation S-K</FP> <FP SOURCE="FP1-2">A. Definitions</FP> <FP SOURCE="FP1-2">1. Proposed Definition: “De-SPAC Transaction”</FP> <FP SOURCE="FP1-2">2. Comments: Definition of “De-SPAC Transaction”</FP> <FP SOURCE="FP1-2">3. Final Definition: “De-SPAC Transaction”</FP> <FP SOURCE="FP1-2">4. Proposed Definition: “Special Purpose Acquisition Company (SPAC)”</FP> <FP SOURCE="FP1-2">5. Comments: Definition of “Special Purpose Acquisition Company (SPAC)”</FP> <FP SOURCE="FP1-2">6. Final Definition: “Special Purpose Acquisition Company (SPAC)”</FP> <FP SOURCE="FP1-2">7. Proposed Definition: “SPAC Sponsor”</FP> <FP SOURCE="FP1-2">8. Comments: Definition of “SPAC Sponsor”</FP> <FP SOURCE="FP1-2">9. Final Definition: “SPAC Sponsor”</FP> <FP SOURCE="FP1-2">10. Proposed Definition: “Target Company”</FP> <FP SOURCE="FP1-2">11. Comments: Definition of “Target Company”</FP> <FP SOURCE="FP1-2">12. Final Definition: “Target Company”</FP> <FP SOURCE="FP1-2">B. Sponsors</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">C. Conflicts of Interest</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">D. Dilution</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">E. Prospectus Cover Page and Prospectus Summary Disclosure</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">F. De-SPAC Transactions: Background, Reasons, Terms, and Effects</FP> <FP SOURCE="FP1-2">1. Proposed Item 1605</FP> <FP SOURCE="FP1-2">2. Comments: Item 1605</FP> <FP SOURCE="FP1-2">3. Final Item 1605</FP> <FP SOURCE="FP1-2">G. Board Determination About the De-SPAC Transaction; Reports, Opinions, Appraisals, and Negotiations</FP> <FP SOURCE="FP1-2">1. Proposed Item 1606(a)</FP> <FP SOURCE="FP1-2">2. Comments: Item 1606(a)</FP> <FP SOURCE="FP1-2">3. Final Item 1606(a)</FP> <FP SOURCE="FP1-2">4. Proposed Item 1606(b)</FP> <FP SOURCE="FP1-2">5. Comments: Item 1606(b)</FP> <FP SOURCE="FP1-2">6. Final Item 1606(b)</FP> <FP SOURCE="FP1-2">7. Proposed Items 1606(c) Through (e)</FP> <FP SOURCE="FP1-2">8. Comments: Items 1606(c) Through (e)</FP> <FP SOURCE="FP1-2">9. Final Items 1606(c) Through (e)</FP> <FP SOURCE="FP1-2">10. Proposed Item 1607</FP> <FP SOURCE="FP1-2">11. Comments: Item 1607</FP> <FP SOURCE="FP1-2">12. Final Item 1607</FP> <FP SOURCE="FP1-2">H. Tender Offer Filing Obligations</FP> <FP SOURCE="FP1-2">1. Proposed Item 1608</FP> <FP SOURCE="FP1-2">2. Comments: Item 1608</FP> <FP SOURCE="FP1-2"> 3. Final Item 1608 </FP> <FP SOURCE="FP1-2">I. Structured Data Requirement</FP> <FP SOURCE="FP1-2">1. Proposed Item 1610</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Item 1610 and Tagging Compliance Date</FP> <FP SOURCE="FP-2">III. Disclosures and Liability in De-SPAC Transactions</FP> <FP SOURCE="FP1-2">A. Non-Financial Disclosures in De-SPAC Disclosure Documents</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">B. Minimum Dissemination Period</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">C. Private Operating Company as Co-Registrant</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules</FP> <FP SOURCE="FP1-2">D. Re-Determination of Smaller Reporting Company (SRC) Status</FP> <FP SOURCE="FP1-2">1. Proposed Rules</FP> <FP SOURCE="FP1-2">2. Comments</FP> <FP SOURCE="FP1-2">3. Final Rules and Guidance</FP> <FP SOURCE="FP1-2">E. PSLRA Sa ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 1366k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━