What disclosure is required of a company that receives a financial viability exception?
A company that receives a financial viability exception must mail to all shareholders not later than ten calendar days before issuance of the securities, a letter alerting them to its omission to seek the shareholder approval that would otherwise be required. Such notification shall disclose the terms of the transaction (including the number of shares of common stock that could be issued and the consideration received), the fact that the issuer is relying on a financial viability exception to the stockholder approval rules, and that the audit committee or a comparable body of the board of directors comprised solely of independent, disinterested directors has expressly approved reliance on the exception. The issuer shall also make a public announcement through the news media disclosing the same information as promptly as possible, but no later than ten days before the issuance of the securities.
A company that receives a financial viability exception must mail to all shareholders not later than ten calendar days before issuance of the securities, a letter alerting them to its omission to seek the shareholder approval that would otherwise be required. Such notification shall disclose the terms of the transaction (including the number of shares of common stock that could be issued and the consideration received), the fact that the company is relying on a financial viability exception to the stockholder approval rules, and that the audit committee or a comparable body of the board of directors comprised solely of independent, disinterested directors has expressly approved reliance on the exception. The company must also file a Form 8-K, where required by SEC rules, or issue a press release disclosing the same information as promptly as possible, but no later than ten days before the issuance of the securities.
