Monday, March 21, 2016

Transition Report on Form 10-KT - 9 Months Plus of Smaller Reporting Company


  1. Rule: Rule 13a-10(a) requires that an issuer changing its fiscal closing date shall file a report covering the resulting transition period between the closing date of its most recent fiscal year and the opening date of its new fiscal year (such transition period may not exceed 12 months).
  2. Form: Transition period of at least 6 months must be covered by an annual report on Form 10-K.
  3. Filing Deadline: not more than 90 days (for smaller reporting company (SRP)) after either the close of the transition period or the date of the determination to change the fiscal closing date, whichever is later
  4. Financial Statements: (a) audited (Financial Reporting Manual 1365.2) financial statements for the transition period (transition period of nine or more months will be considered a full year (Rule 3-06 of Regulation S-X)) plus audited financial statements for fiscal years preceding transition as otherwise required by Form 10-K (i.e., audited balance sheets as of the close of the transition period and the preceding fiscal year-end, and audited statements of income, cash flows and owners’ equity for the nine-month transition period and the one preceding fiscal year) and (b) specified financial information for the prior-year period comparable to the transition period, which may be unaudited and presented within the financial statements or in the notes thereto – such information include revenues, gross profits, income taxes, income or loss from continuing operations before extraordinary items and cumulative effect of a change in accounting principles and net income or loss, and effects of any discontinued operations and/or extraordinary items as classified under GAAP.
  5. MD & A: For a transition period of nine or more months, information is required under Item 303(a) of Regulation S-K as if the transition period were a full fiscal year. All information responsive to the textual items of the reporting form (e.g., Reg. S-K 101, 103, 303, etc.) must be provided in the transition report. (Financial Reporting Manual 1365.1).
  6. Executive Compensation: (a) for covered persons (Item 402(a)(3) of Regulation S-K): See SEC CD & I on Regulation S-K 217.04, “…The Division staff advised that no disclosure need be provided with respect to executive officers that started employment with the company during the [transition] period and did not, during that period of employment, earn more than $100,000. With respect to executive officers that were employed by the company both during and before the [transition] period, however, Item 402 disclosure would have to be provided for those who earned in excess of $100,000 during the one-year period ending [on the date the transition period ended], and (b) for covered periods: See CD & I. 217.05 "If a company changes its fiscal year, report compensation for the "stub period," and do not annualize or restate compensation. In addition, report compensation for the last three full fiscal years (for non-SRC), in accordance with Item 402 of Regulation S-K. For example, in late 1997 a company changed its fiscal year end from June 30 to December 31. In the Summary Compensation Table, provide disclosure for each of the following four periods: July 1, 1997 to December 31, 1997; July 1, 1996 to June 30, 1997; July 1, 1995 to June 30, 1996; and July 1, 1994 to June 30, 1995. Continue providing such disclosure for four periods (three full fiscal years and the stub period) until there is disclosure for three full fiscal years after the stub period (December 31, 2000 in the example)."
  7. Sample Form 10-Ks for transition periods:

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