Section 14F of The Exchange Act generally says that if a reverse merger (or the sale of 5% or more of the stock is sold) and a change of directors will be initiated or is agreed upon, then an S.E.C filing, mailing to shareholders and waiting period are required.    Section 14F was enacted to prevent quite takeovers of Board seats to a  public company without notifying shareholders.  As long as more than 5% of the current stock is transferred in a reverse merger, this will trigger the 14(f) requirement which can be fulfilled by filing out Schedule 14F.

Schedule 14F has biographical information about the company’d prospective directors and and organizational chart to outline their roles within the company.  The Schedule 14F is filed with the S.E.C. at the same time that it is sent to shareholders.  The general process takes about 40 days.

If the “condition” of replacing the board of directors is removed from the “merger agreement”, than a Schedule 14F does not need to be filed.  This means the current board of directors stay throughout the merger process and leave on their own accord after the merger is complete.  This process circumvents the need for filing and cuts the waiting time down.

In general, a reverse merger agreement that negotiates or states that the Board of Directors will change due to the reverse merger, should file a Schedule 14F

Need help filing a Schedule 14F with the S.E.C.??  Contact us to talk shop.