Acquisitions of Businesses by a Shell Company (Other Than a Business Combination Related Shell Company)
210.15-01 — Acquisitions of businesses by a shell company (other than a business combination related shell company).
(a) Audit requirements. The term audit (or examination),
when used in regard to financial statements of an entity that is or will be a
predecessor to a shell company (other than a business combination related shell
company), means an examination of the financial statements by an independent
accountant in accordance with the standards of the Public Company Accounting
Oversight Board (“PCAOB”) for the purpose of expressing an opinion thereon. When
used in regard to financial statements of an entity that is not a predecessor
that are included in a registration statement or proxy statement filed for a
combination with an issuer that is a shell company (other than a business
combination related shell company), the term means an examination of the
financial statements by an independent accountant in accordance with either the
standards of the PCAOB or U.S. generally accepted auditing standards (“U.S.
GAAS”) as specified or permitted in this part and forms applicable to those
entities for the purpose of expressing an opinion thereon. In transactions
involving a shell company that is not a SPAC (as defined in § 229.1601(b) of
this chapter), the predecessor must be audited by an independent accountant
registered with the PCAOB.
(b) Financial statements. When a registrant is a shell company (other than
a business combination related shell company) and the financial statements of a
business that will be combining with such registrant are required in a
registration statement or proxy statement, such registrant must file financial
statements of the business in accordance with §§ 210.3-01 through 210.3-12 and
210.10-01 (Articles 3 and 10 of Regulation S-X) as if the filing were a
Securities Act registration statement for the initial public offering of the
business's equity securities. The financial statements of the business may be
filed pursuant to §§ 210.8-01 through 210.8-08 (Article 8) when that business
would qualify to be a smaller reporting company based on its annual revenues as
of the most recently completed fiscal year for which audited financial
statements are available, if it were filing a registration statement alone.
(c) Age of financial statements. The financial statements of a business
that will be acquired by a shell company (other than a business combination
related shell company) must comply with the requirements in § 210.3-12
(§ 210.8-08 when that business would qualify to be a smaller reporting company
based on its annual revenues as of the most recently completed fiscal year for
which audited financial statements are available, if it were filing a
registration statement alone) as if the financial statements were included in an
initial registration statement in determining the age of financial statements of
the business in the registration statement or proxy statement of the
registrant.
(d) Acquisition of a business or real estate operation by a predecessor.
Registrants must apply § 210.3-05 (§ 210.8-04 when the predecessor would qualify
to be a smaller reporting company based on its annual revenues as of the most
recently completed fiscal year for which audited financial statements are
available if it were filing a registration statement alone) or § 210.3-14
(§ 210.8-06 when the predecessor would qualify to be a smaller reporting company
based on its annual revenues as of the most recently completed fiscal year for
which audited financial statements are available if it were filing a
registration statement alone) to acquisitions of a business or real estate
operation, respectively, by a predecessor.
(1) See § 210.1-02(w)(1) for rules on applying the significance tests to
acquisitions of a business or real estate operation that is not or will not be
the predecessor.
(2) When the financial statements of a recently acquired business or real estate
operation that is not or will not be the predecessor are omitted from a
registration statement or proxy statement pursuant to § 210.3-05(b)(4)(i) (Rule
3-05(b)(4)(i) of Regulation S-X) or § 210.3-14(b)(3)(i) (Rule 3-14(b)(3)(i) of
Regulation S-X), those financial statements must be filed in a Form 8-K by the
later of the filing of the Form 8-K filed pursuant to Item 2.01(f) of Form 8-K
or 75 days after consummation of the acquisition.
(e) Financial statements of shell company. After a shell company
registrant (other than a business combination related shell company) acquires a
business that is its predecessor, the financial statements of the shell company
for periods prior to consummation of the acquisition are not required to be
included in any filing once the financial statements of the predecessor have
been filed for all required periods through the acquisition date and the
financial statements of the registrant include the period in which the
acquisition was consummated. If a registrant is to acquire or has acquired a
shell company (other than a business combination related shell company), the
financial statements of the shell company are required to be included in any
filing that requires the registrant's financial statements, as if the shell
company were the registrant for the filing, unless the financial statements of
the registrant include the period in which the acquisition of the shell company
was consummated.
[89 FR 14158, Feb. 26, 2024]