PRA supporting statement SPAC proposing release.Final

SUPPORTING STATEMENT FOR PROPOSED RULES
UNDER THE SECURITIES ACT OF 1933 AND
SECURITIES EXCHANGE ACT OF 1934
This is a submission under the Paperwork Reduction Act of 1995, 44 U.S.C. §3501, et
seq., consisting of this supporting statement and the following attachment:
A.

Proposing Release (Release No. 33-11048)

A.

JUSTIFICATION

1.

CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

On March 30, 2022, the Securities and Exchange Commission (the “Commission”)
proposed rules to enhance investor protections in initial public offerings by special purpose
acquisition companies (“SPACs”) and in subsequent business combination transactions between
SPACs and private operating companies (“de-SPAC transactions”).1 Specifically, the
Commission proposed new Subpart 1600 of Regulation S-K, which would set forth specialized
disclosure requirements with respect to, among other things, compensation paid to sponsors,
conflicts of interest, dilution, and the fairness of de-SPAC transactions. The Commission also
proposed new rules and amendments to certain rules and forms under the Securities Act of 1933
and the Securities Exchange Act of 1934 to:
•

Require additional disclosures about the private operating company in connection with
de-SPAC transactions;

•

Require that disclosure documents in de-SPAC transactions be disseminated to investors
at least 20 calendar days in advance of a shareholder meeting or the earlier date of action
by consent, or the maximum period for disseminating such disclosure documents
permitted under the laws of the jurisdiction of incorporation or organization if such
period is less than 20 calendar days;

•

Deem a private operating company in a de-SPAC transaction to be a co-registrant of a
registration statement on Form S-4 or Form F-4 when a SPAC files such a registration
statement for a de-SPAC transaction;

•

Amend the definition of “smaller reporting company” to require a re-determination of
smaller reporting company status following the consummation of a de-SPAC transaction;

•

Define the term “blank check company” for purposes of the Private Securities Litigation
Reform Act of 1995 (PSLRA) to encompass SPACs and certain other blank check

1

See Special Purpose Acquisition Companies, Shell Companies, and Projections, Release No. 33-11048 (Mar. 30,
2022) [87 FR 29458 (May 13, 2022)].

1

companies such that the safe harbor for forward-looking statements under the PSLRA
would not be available to these issuers; and
•

Deem anyone who has acted as an underwriter of the securities of a SPAC and takes steps
to facilitate a de-SPAC transaction, or any related financing transaction or otherwise
participates, directly or indirectly, in the de-SPAC transaction to be engaged in a
distribution and to be an underwriter in the de-SPAC transaction.

In addition, the Commission proposed new Rule 145a under the Securities Act that would
deem any business combination transaction involving a reporting shell company, including a
SPAC, to involve a sale of securities to the reporting shell company’s shareholders and proposed
to amend a number of financial statement requirements in Regulation S-X applicable to business
combination transactions involving shell companies.2 The Commission also proposed to update
its guidance regarding the use of projections in Commission filings and to require additional
disclosure regarding projections when disclosed in connection with de-SPAC transactions.3
The proposed new rules and amendments contain “collection of information”
requirements within the meaning of the Paperwork Reduction Act. The titles of these
requirements are:4
•

Regulation 14A (Commission Rules 14a-1 through 14a-21 and Schedule 14A) (OMB
Control No. 3235-0059);

•

Regulation 14C (Commission Rules 14c-1 through 14c-7 and Schedule 14C) (OMB
Control No. 3235-0057);

•

Schedule TO (OMB Control No. 3235-0515);

•

Form S-1 (OMB Control No. 3235-0065);

•

Form S-4 (OMB Control No. 3235-0324);

•

Form F-1 (OMB Control No. 3235-0258);

•

Form F-4 (OMB Control No. 3235-0325);

Throughout this Paperwork Reduction Act submission, the terms “shell company” and “reporting shell company”
are used in lieu of the phrases “shell company, other than a business combination related shell company” and
“reporting shell company, other than a business combination related shell company.”
2

3

Further, the Commission proposed a new safe harbor (proposed Rule 3a-10) under the Investment Company Act
of 1940 that would provide that a SPAC that satisfies the conditions of the proposed rule would not be an investment
company and therefore would not be subject to regulation under that Act. We have prepared a separate Paperwork
Reduction Act submission for this proposed rule.
4

We estimate that there would be a negligible or no change in burden to Form 20-F and Form 8-K as a result of the
proposed amendments to Regulation S-X, in that these proposed amendments would be codifying existing
interpretations of existing rules. Accordingly, we are not making any revisions to the PRA burden estimates for
Form 20-F and Form 8-K at this time.

2

2.

•

Form 10-K (OMB Control No. 3235-0063); and

•

Form 10-Q (OMB Control No. 3235-0070).
PURPOSE AND USE OF THE INFORMATION COLLECTION

The proposed new rules and amendments are intended to improve the relevance,
completeness, clarity, and comparability of the disclosures provided by SPACs at the initial
public offering and de-SPAC transaction stages, and to provide important investor protections to
strengthen investor confidence in the SPAC market. The proposed new rules and amendments
are also intended to (1) provide reporting shell company shareholders with more consistent
Securities Act protections in business combination transactions; (2) more closely align the
financial statement reporting requirements in business combination transactions involving shell
companies with those in traditional initial public offerings; and (3) enhance the reliability of
projections disclosure in Commission filings. Compliance with these information collections is
mandatory to the extent applicable to each registrant.5
3.

CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY

The collection of information requirements of the proposed new rules and amendments
are set forth in the affected rules and forms. All of the affected forms and schedules in this
submission are filed electronically with the Commission using the Commission’s Electronic Data
Gathering, Analysis and Retrieval (“EDGAR”) system.
4.

DUPLICATION OF INFORMATION

The proposed disclosure requirements in Subpart 1600 may partially duplicate and
overlap with a number of existing disclosure requirements under Regulation S-K that are
currently applicable to SPAC registered offerings and in de-SPAC transactions. To the extent
that the disclosure requirements in proposed Subpart 1600 overlap with these existing disclosure
requirements, the requirements of proposed Subpart 1600 would be controlling. Other than these
proposed disclosure requirements, the Commission believes that the proposed new rules and
amendments would not duplicate, overlap or conflict with other federal rules.
5.

REDUCING THE BURDEN ON SMALL ENTITIES

The proposed specialized disclosure and other requirements with respect to SPAC
registered offerings and de-SPAC transactions are intended to improve the usefulness and clarity
of the information provided to investors so that they can make better informed decisions as to
whether to purchase securities in SPAC registered offerings, or in secondary trading markets,
and in voting, investment and redemption decisions in connection with de-SPAC transactions.
They are also intended to enhance investor protections as well as provide additional clarity
regarding the legal obligations of target companies and others in connection with a de-SPAC
5

Registrants claiming smaller reporting company status have the option to comply with the scaled disclosures
available to them on an item-by-item basis.

3

transaction. We believe that these proposed requirements are equally appropriate for SPACs of
all sizes that are engaged in a registered offering and for SPACs and target private operating
companies that are engaged in a de-SPAC transaction. As a result, we do not believe that it is
appropriate to propose different compliance or reporting requirements for small entities; clarify,
consolidate or simplify compliance and reporting requirements for small entities; or to exempt
small entities from these requirements. In our view, a private operating company’s method of
becoming a public company should not negatively impact investor protection.
Proposed Rule 145a would deem business combinations involving a reporting shell
company and a non-shell company to involve a sale of securities to the reporting shell
company’s shareholders. Given that proposed Rule 145a is intended to address potential
disparities in the disclosure and liability protections available to reporting shell company
shareholders, we do not believe that it is appropriate to propose different compliance or reporting
requirements for small entities; clarify, consolidate or simplify compliance and reporting
requirements for small entities; or to exempt small entities from the proposed rule.
The proposed amendments to Regulation S-X would generally codify existing staff
guidance on financial statement requirements for certain business combinations involving shell
companies, and, based on staff analysis of disclosures in these transactions, we believe that most
companies already report consistent with this staff guidance. Further, the amendments are not
expected to have any significant adverse effect on small entities (and are, in fact, expected to
relieve burdens for some of these entities). Accordingly, we do not believe that it is necessary to
exempt small entities from all or part of the proposed amendments to Regulation S-X; establish
different compliance or reporting requirements for such entities; or clarify, consolidate or
simplify compliance and reporting requirements for small entities.
6.

CONSEQUENCES OF NOT CONDUCTING COLLECTION

The proposed new rules and amendments affect Form 10-Q, Form 10-K, Form F-1,
Form F-4, Form S-1, Form S-4, Schedule 14A, Schedule 14C, and Schedule TO. These forms
and schedules set forth the disclosure requirements for periodic reports, registration statements,
proxy statements, information statements, and tender offer statements filed by companies to help
investors make informed investment, voting, and/or redemption decisions. Less frequent
collection would deprive investors of access to information that is important to their voting,
investment, and/or redemption decisions.
7.

SPECIAL CIRCUMSTANCES

There are no special circumstances in connection with these proposed new rules and
amendments.

4

8.

CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY

The Commission has issued a proposing release soliciting comment on the new
“collection of information” requirements and associated paperwork burdens.6 A copy of the
proposing release is attached. In response to the solicitation for comment in the proposing
release, registrants, investors, and other market participants provide comments. In addition, the
Commission and staff participate in ongoing dialogue with representatives of various market
participants through public conferences, roundtables and meetings. All comments received on
the proposed new rules and amendments are available at https://www.sec.gov/comments/s7-1322/s71322.htm. The Commission will consider all comments received prior to publishing the
final rules, as required by 5 CFR 1320.11(f).
9.

PAYMENT OR GIFT TO RESPONDENTS
No payment or gift has been provided to any respondents.

10.

CONFIDENTIALITY

Responses to the information collections in this submission are not kept confidential, and
there is no mandatory retention period for the information disclosed.
11.

SENSITIVE QUESTIONS

No information of a sensitive nature would be required under the following collections of
information in connection with the proposed new rules and amendments: Form S-1, Form F-1,
Form S-4, and Form F-4, Form 10-Q, Form 10-K, Schedule 14A, Schedule 14C, and
Schedule TO. These information collections collect basic Personally Identifiable Information
(PII) that may include a name and job title. However, the agency has determined that these
information collections do not constitute a system of record for purposes of the Privacy Act.
Information is not retrieved by a personal identifier. In accordance with Section 208 of the EGovernment Act of 2002, the agency has conducted a Privacy Impact Assessment (PIA) of the
EDGAR system, in connection with this collection of information. The EDGAR PIA, published
on February 18, 2025 is provided as a supplemental document and is also available at
https://www.sec.gov/privacy.
12. and 13.

ESTIMATES OF HOUR AND COST BURDENS

The tables below show the estimated incremental and aggregate increases in paperwork
burden as a result of the proposed new rules and amendments. These estimates represent the
average burden for all respondents, both large and small. In deriving these estimates, we
recognize that the burdens will likely vary among individual respondents based on a number of
factors, including the size and complexity of their business. These estimates include the time
and the cost of preparing and reviewing disclosure, filing documents, and retaining records. We
believe that some registrants will experience costs in excess of this average and some registrants
6

See Release No. 33-11048.

5

will experience less than the average costs. The methodologies for deriving these estimates are
discussed below.
The burden estimates represent the burden for all SPACs that file registration statements
with the Commission for registered offerings and all registrants that file disclosure documents in
connection with a de-SPAC transaction or a business combination involving a shell company or
a reporting shell company. Additionally, the burden estimates take into account an expected
increase in the number of Securities Act registration statements as a result of proposed Rule
145a. Based on a review of Commission filings during the period 2011 – 2021 and an analysis
of the effects of the proposed new rules and amendments,7 the staff estimates that:
•

SPACs will file an average of 90 registration statements each year for registered offerings
on Form S-1 and 8 registration statements on Form F-1, other than for de-SPAC
transactions;

•

An average of 30 registration statements on Form S-4 and 4 registration statements on
Form F-4, 30 definitive proxy statements on Schedule 14A, 4 definitive information
statements on Schedule 14C, and 2 tender offer statements on Schedule TO will be filed
each year in connection with de-SPAC transactions; and

•

An average of 20 registration statements on Form S-4 and 2 registration statements on
Form F-4 will be filed each year for business combination transactions involving a
reporting shell company and a non-shell company, other than de-SPAC transactions.8

For purposes of the Paperwork Reduction Act, the burden is allocated between internal
burden hours and outside professional costs. The portion of the burden carried by outside
professionals is reflected as a cost, while the portion of the burden carried by the company
internally is reflected in hours. The following Table 1 sets forth the percentage estimates the
Commission uses for the burden allocation for each form and schedule, consistent with current
OMB estimates and recent Commission rulemakings. We estimate that the average cost of
retaining outside professionals is $400 per hour.9

7

We based these estimates, in part, on a review of Commission filings over a 10-year period because we believe
that this longer timeframe would more accurately reflect the average number of registration statements filed by
SPACs and disclosure documents for de-SPAC transactions in a given year.
8

This estimate represents the upper bound of the estimated number of Forms S-4 and F-4 filed for these
transactions.
9

We recognize that the costs of retaining outside professionals may vary depending on the nature of the
professional services, but for purposes of this analysis, we estimate that such costs would be an average of $400 per
hour. As of the date of the proposing release, this was the rate we typically estimated for outside professional
services used in connection with public company reporting.

6

Table 1. Standard Estimated Burden Allocation for Specified Forms, Schedules, and
Records
Form / Schedule / Record Type

Internal

Outside Professionals

Forms S-1, F-1, S-4, and F-4

25%

75%

Schedules 14A and 14C

75%

25%

Schedule TO

25%

75%

Form 10-K and Form 10-Q

75%

25%

The following Table 2 summarizes the estimated effects of the proposed new rules and
amendments, other than Rule 145a, on the paperwork burdens associated with the affected forms,
schedules, and records:10
Table 2. Calculation of the Incremental Change in Burden Estimates of Current Responses
Resulting from the Proposed New Rules and Amendments, Other Than Rule 145a
Form /
Schedule /
Record

Number
of
Estimated
Affected
Responses

Estimated
Burden
Hour
Increase
or
Decrease
/ Affected
Response

Total
Incremental
Increase or
Decrease in
Burden
Hours

Estimated
Increase or
Decrease in
Internal
Burden
Hours

Estimated
Increase or
Decrease in
Outside
Professional
Hours

Total Increase or
Decrease in
Outside
Professional Costs

(A)

(B)

(C) = (A) *
(B)

(D) = (C) *
(Allocation
%)

(E) = (C) *
(Allocation
%)

(F) = (E) * $400

Schedule
14A

30

(30)

(900)

(675)

(225)

($90,000)

Schedule
14C

4

(30)

(120)

(90)

(30)

($12,000)

Schedule
TO

2

(27)

(54)

(14)

(41)

($16,200)

Form S-1

90

6

540

135

405

$162,000

Form S-4

30

95

2,850

713

2,138

$855,000

Form F-1

8

6

48

12

36

$14,400

Form F-4

4

95

380

95

285

$114,000

168

115

2,744

176

2,568

$1,027,200

Total

10

We note Table 6 below, which provides a breakdown of the reasons for the burden change for each affected form
based on each proposed amendment.

7

The following Table 3 summarizes the estimated effects of proposed Rule 145a on the
paperwork burdens associated with the affected forms:
Table 3. Calculation of the Change in Burden Estimates of the Affected Forms Resulting
from Proposed Rule 145a
Form /
Schedule /
Record

Estimated
Increase
in the
Number
of
Responses

Estimated
Burden
Per Form

Total
Incremental
Increase or
Decrease in
Burden
Hours

Estimated
Increase in
Internal
Burden
Hours

Estimated
Increase in
Outside
Professional
Hours

Total Increase in
Outside
Professional Costs

(A)

(B)

(C) = (A) *
(B)

(D) = (C) *
(Allocation
%)

(E) = (C) *
(Allocation
%)

(F) = (E) * $400

Form S-4

20

3,826

76,520

19,130

57,390

$22,956,000

Form F-4

2

1,441

2,882

720

2,162

$864,600

Total

22

5,267

79,402

19,850

59,552

$23,820,600

In addition, we estimate that an average of 50 fewer post-business combination
companies following a de-SPAC transaction will qualify as smaller reporting companies than
under the current rules until the next annual re-determination date.11 While we cannot predict
with certainty the number of these post-business combination companies, we estimate for
purposes of these calculations that currently all post-business combination companies qualify as
SRCs following de-SPAC transactions in which the SPAC is the legal acquirer and that 80% of
these companies that are eligible to use the scaled SRC disclosure provisions do so.12 We
estimate that these registrants would file, on average, one Form 10-K, 1.5 Forms 10-Q, one
Schedule 14A, and one registration statement on Form S-1 prior to the next re-determination of
SRC status.

11

This estimate is based, in part, on our estimate of the number of de-SPAC transactions in which the SPAC is the
legal acquirer.
12

This estimated realization rate is based on the same methodology and data set forth in Smaller Reporting
Company Definition, Release No. 33-10513 (June 28, 2018) [83 FR 31992 (July 10, 2018)], at Section V.D.
Though the estimated realization rate in Release No. 33-10513 preceded the effective date of the amendments to the
smaller reporting company definition in 2018, we expect that the current realization rate for eligible companies
using the scaled SRC disclosure provisions to be generally consistent with the estimated realization rate in 2018.

8

The following Table 4 summarizes the estimated effects of the proposed re-determination
of SRC status on the paperwork burdens associated with the affected forms and schedules:
Table 4. Calculation of the Incremental Change in Burden Estimates of Current Responses
Resulting from the Proposed Re-Determination of SRC Status
Form /
Schedule /
Record

Number of
Estimated
Affected
Responses

Estimated
Burden
Hour
Increase or
Decrease /
Affected
Response

Total
Incremental
Increase or
Decrease in
Burden
Hours

Estimated
Increase or
Decrease in
Internal
Burden
Hours

Estimated
Increase or
Decrease in
Outside
Professional
Hours

Total
Increase or
Decrease in
Outside
Professional
Costs

(A)

(B)

(C) = (A) *
(B)

(D) = (C) *
(Allocation %)

(E) = (C) *
(Allocation
%)

(F) = (E) *
$400

Schedule
14A

40

1

40

30

10

$4,000

Schedule
14C

4

1

4

3

1

$400

Form S-1

40

23

920

230

690

$276,000

Form 10-K

40

586

23,440

17,580

5,860

$2,344,000

Form 10-Q

60

48

2,880

2,160

720

$288,000

Total

184

659

27,284

20,003

7,281

$2,912,400

9

The following Table 5 summarizes the requested paperwork burden changes to existing
information collections, including the estimated total reporting burdens and costs, under the
proposed new rules and amendments.
Table 5. Requested Paperwork Burden under the Proposed New Rules and Amendments13
Form /
Schedul
e

Current Burden

Program Change

Requested Change in Burden

Current
Annual
Responses

Current
Burden
Hours

Current Cost
Burden

Number
of
Affected
Resp.

Estimated
Increase
or
Decrease
in Outside
Prof.
Hours

Increase or
Decrease in
Outside
Professional
Costs

Annual
Respons
es

Burden
Hours

Cost Burden

(A)

(B)

(C)

(D)

(E)

(F)

(G) =
(A)

(H) = (B) +
(E)

(I) = (C) + (F)

Schedule
14A

6,369

860,389

$114,684,112

70

(645)

($86,000)

6,369

859,744

$114,598,112

Schedule
14C

569

63,901

$8,520,944

8

(87)

($11,600)

569

63,814

$8,509,344

Schedule
TO

1,378

30,834

$12,333,000

2

(14)

($16,200)

1,378

30,820

$12,316,800

Form
S-1

898

141,978

$174,015,643

130

365

$438,000

898

142,343

$174,453,643

Form
S-4

588

560,988

$675,605,379

50

19,843

$23,811,000

608

580,831

$699,416,379

Form
F-1

66

26,571

$32,130,375

8

12

$14,400

66

26,583

$32,144,775

Form
F-4

39

13,999

$17,013,425

6

815

$978,600

41

14,814

$17,992,025

Form
10-K

8,292

13,988,811

$1,835,594,519

40

17,580

$2,344,000

8,292

14,006,391

$1,837,938,519

Form
10-Q

22,925

3,098,084

$410,257,154

60

2,160

$288,000

22,925

3,100,244

$410,545,154

Total

41,124

18,785,555

$3,280,154,551

374

14.

40,029
$27,760,200
41,146
18,825,584
+ See Tables 2 and 4 for the number of affected responses for Schedules 14A and 14C.
++ See Tables 2 and 4 for the number of affected responses for Form S-1.
+++ See Tables 2 and 3 for the number of affected responses for Form S-4 and Form F-4.

$3,307,914,751

COSTS TO FEDERAL GOVERNMENT

The annual cost of reviewing and processing disclosure documents, including registration
statements, post-effective amendments, proxy statements, annual reports and other filings of
operating companies amounted to approximately $131,724,880 in fiscal year 2023, based on the
Figures in this table have been rounded to the nearest whole number. In addition, the “Annual Responses” in
column (G) for Form S-4 and Form F-4 reflect the estimated increases in the number of responses reflected in Table
3.
13

10

Commission’s computation of the value of staff time devoted to this activity and related
overhead.
15.

REASON FOR CHANGE IN BURDEN

The following Table 6 summarizes the reasons for the changes in burden in connection
with the proposed new rules and amendments:
Table 6. Estimated Paperwork Burden Effects of the Proposed New Rules and Amendments
Applicable to SPACs
Proposed Requirement and Effects

Affected Forms
and Schedules

Estimated Effect Per Affected
Response14

Item 1602: Registered offerings by special purpose
acquisition companies

Forms S-1 and
F-1

• 1 hour increase in compliance
burden per Form S-1 or F-1

• Forms S-1,
F-1, S-4, and
F-4

• 2 hour increase in compliance
burden per Form S-1, F-1, S-4 or
F-4

• Schedules 14A
and 14C

• 2 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 2 hour increase in compliance
burden per Schedule TO

• Forms S-4 and
F-4

• 1 hour increase in compliance
burden per Form S-4 or F-4

• Schedules 14A
and 14C

• 1 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 1 hour increase in compliance
burden per Schedule TO

• Require certain information on the prospectus cover
page and in the prospectus summary of registration
statements for offerings by SPACs other than deSPAC transactions.
• Require enhanced dilution disclosure in these
registration statements.
Item 1603: SPAC sponsor; conflicts of interest
• Require certain disclosure regarding the sponsor and
its affiliates and any promoters of SPACs.
• Require disclosure regarding conflicts of interest
between the sponsor or its affiliates or promoters and
unaffiliated security holders.

Item 1604: De-SPAC transactions
• Require certain information on the prospectus cover
page and in the prospectus summary of registration
statements for de-SPAC transactions.
• Require enhanced dilution disclosure in these
registration statements.

14

Estimated effect expressed as increase or decrease of burden hours on average and, as applicable, derived from
Commission staff review of samples of relevant sections of the affected forms.

11

Proposed Requirement and Effects

Affected Forms
and Schedules

Estimated Effect Per Affected
Response14

Item 1605: Background of and reasons for the deSPAC transaction; terms of the de-SPAC
transaction; effects

• Forms S-4 and
F-4

• 1 hour increase in compliance
burden per Form S-4 or F-4

• Schedules 14A
and 14C

• 1 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 1 hour increase in compliance
burden per Schedule TO

Item 1606: Fairness of the de-SPAC transaction
and any related financing transaction

• Forms S-4 and
F-4

• 4 hour increase in compliance
burden per Form S-4 or F-4

• Require disclosure on whether a SPAC reasonably
believes that a de-SPAC transaction and any related
financing transactions are fair or unfair to investors.

• Schedules 14A
and 14C

• 4 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 4 hour increase in compliance
burden per Schedule TO

Item 1607: Reports, opinions, appraisals and
negotiations

• Forms S-4 and
F-4

• 1 hour increase in compliance
burden per Form S-4 or F-4

• Require disclosure regarding any report, opinion or
appraisal received by a SPAC or its sponsor from an
outside party relating to the fairness of a de-SPAC
transaction or any related financing transaction,
including disclosure on the qualifications of the
outside party, method of selection, and certain
material relationships that existed during the past two
years.

• Schedules 14A
and 14C

• 1 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 1 hour increase in compliance
burden per Schedule TO

Item 1608: Tender offer filing obligations in deSPAC transactions

• Schedule TO

• 3 hour increase in compliance
burden per Schedule TO

Item 1609: Financial projections in de-SPAC
transactions

• Forms S-4 and
F-4

• 2 hour increase in compliance
burden per Form S-4 or F-4

• Require additional disclosures regarding financial
projections disclosed in a disclosure document for a
de-SPAC transaction.

• Schedules 14A
and 14C

• 2 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 2 hour increase in compliance
burden per Schedule TO

• Require disclosure on the background, material terms
and effects of the de-SPAC transaction.

• Require a discussion of the bases for this reasonable
belief.

• Require additional disclosures in a Schedule TO filed
in connection with a de-SPAC transaction.

12

Proposed Requirement and Effects

Affected Forms
and Schedules

Estimated Effect Per Affected
Response14

Item 1610: Structured data requirement

• Forms S-1,
F-1, S-4, and
F-4

• 1 hour increase in compliance
burden per Form S-1, F-1, S-4 or
F-4

• Schedules 14A
and 14C

• 1 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 1 hour increase in compliance
burden per Schedule TO

• Forms S-4 and
F-4

• 50 hour net decrease in
compliance burden per affected
Form S-4 or F-4

• Require information disclosed pursuant to Subpart
1600 to be tagged in a structured, machine-readable
data language.

Proposed Amendments to Regulation S-X15
Amend financial statement requirements and the forms
and schedules filed in connection with business
combination transactions involving shell companies
(other than business combination related shell
companies), including de-SPAC transactions, to more
closely align required disclosures about the target
private operating company with those required in a
Form S-1 or F-1 for an initial public offering,
including:

• Schedules 14A
and 14C
• Schedule TO

• 50 hour net decrease in
compliance burden per affected
Schedule 14A or 14C
• 50 hour net decrease in
compliance burden per affected
Schedule TO

• Expanding the circumstances in which target
companies may report two years, instead of three
years, of audited financial statements (resulting in a
net decrease in burden) (proposed Rule 15-01(b));
and
• Further aligning the requirements for audited
financial statements in these transactions with those
required in a registered initial public offering
(resulting in a net decrease in burden) (proposed
Rule 15-01(c), (d) and (e)).
Proposed Amendments to Align Non-Financial
Statement Disclosures in De-SPAC Transactions

• Forms S-4 and
F-4

• 8 hour increase in compliance
burden per Form S-4 or F-4

• Amend the forms and schedules filed in connection
with de-SPAC transactions to more closely align
required non-financial statement disclosures about
the target private operating company with those
required in a Form S-1 or F-1 for an initial public
offering.

• Schedules 14A
and 14C

• 8 hour increase in compliance
burden per Schedule 14A or 14C

• Schedule TO

• 8 hour increase in compliance
burden per Schedule TO

15

We arrive at an estimate for these amendments to Regulation S-X on the assumption that approximately 30% of
affected responses would require one fewer year of audited financial statements under proposed Rule 15-01(b) than
under the current rules from registrants that would not otherwise have prepared financial statements for such year.
Coupled with an incremental increase in burden for the proposed amendments to Regulation S-X other than
proposed Rule 15-01(b), when this decrease is spread across all affected responses, we arrive at a net burden
decrease of 50 hours.

13

Proposed Requirement and Effects

Affected Forms
and Schedules

Estimated Effect Per Affected
Response14

Proposed Amendment to Forms S-4 and F-4

• Forms S-4 and
F-4

• 100 hour increase in compliance
burden per Form S-4 or F-416***

• Amend Form S-4 and Form F-4 to require that the
SPAC and the target private operating company be
treated as co-registrants when the Form S-4 or Form
F-4 is filed by the SPAC in connection with a deSPAC transaction

In addition, the Commission proposed to require that a post-business combination
company re-determine whether it is a smaller reporting company (SRC) following a de-SPAC
transaction. As proposed, the post-business combination company would be required to reflect
this re-determination in its first periodic report after the de-SPAC transaction and in Commission
filings thereafter until its next annual re-determination of SRC status. We estimate that the
proposed re-determination of SRC status would result in increased burdens in filing Forms 10-K,
Forms 10-Q, Schedules 14A, Schedules 14C, and Forms S-1 for those post-business combination
companies that would lose SRC status, which takes into account the increased incremental
burden in providing disclosures pursuant to non-SRC disclosure requirements.
The following Table 7 sets forth our estimates regarding the increase in compliance
burden when a post-business combination company loses SRC status:
Table 7. Increase in Compliance Burden After Losing SRC Status
Form / Schedule

Estimated Increase in
Internal Hours per
Filing

Estimated Increase in
Outside Professional Hours
per Filing

Estimated Increase in
Outside Professional
Costs per Filing

Form 10-K*

439

147

$58,800

Form 10-Q*

36.57

11.88

$4,752

Schedule 14A**

0.75

0.25

$100

Schedule 14C***

0.75

0.25

$100

Form S-1*

5.75

17.25

$6,900

16

The estimated 100 hour increase in burden is based on an estimate of the additional time that a target company, as
a co-registrant, would spend on preparing disclosures in a Form S-4 or F-4 filed by a SPAC for a de-SPAC
transaction.

14

Notes:
* The estimated increases in compliance burdens are based on the difference between the current estimates for
the applicable form and the estimated burden for SRCs in filing the form. We estimate the compliance burden for
an SRC in filing these forms using the same methodology as in 2018 when the Commission amended the smaller
reporting company definition. See Release No. 33-10513, at Section V.
** In regard to Schedule 14A, we estimate that a company that loses SRC status would experience an increased
compliance burden of 0.75 internal burden hours and a cost of $100 (0.25 professional hours x $400/hour) per
schedule, based on our estimate of the compliance burden for 17 CFR 229.407(d)(5) and (e)(4) and (5) (Item
407(d)(5) and (e)(4) and (5) of Regulation S-K), with which smaller reporting companies are not required to
comply.
*** Similar to Schedule 14A, we estimate that, in regard to Schedule 14C, a company that loses SRC status
would experience an increased compliance burden of 0.75 burden hours and a cost of $100 (0.25 professional
hours x $400/hour) per report, based on our estimate of the compliance burden for Item 407(d)(5) and (e)(4) and
(5) of Regulation S-K.

16.

INFORMATION COLLECTION PLANNED FOR STATISTICAL PURPOSES
The information collections do not employ statistical methods.

17.

EXPLANATION AS TO WHY EXPIRATION DATE WILL NOT BE
DISPLAYED

We request authorization to omit the expiration date on the electronic versions of the
forms and schedules. Including the expiration date on the electronic versions of the forms and
schedules will result in increased costs because the need to make changes to the forms and
schedules may not follow the application’s scheduled version release dates. The OMB control
number will be displayed.
18.

EXCEPTIONS TO CERTIFICATION FOR PAPERWORK REDUCTION ACT
SUBMISSIONS
There are no exceptions to certification for the Paperwork Reduction Act submissions.

B.

STATISTICAL METHODS
The information collections do not employ statistical methods.

15

FORM S-1 SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better informed decisions
as to whether to purchase securities in SPAC registered offerings, including initial public
offerings, and in voting, investment and redemption decisions in connection with de-SPAC
transactions. The proposed new rules and amendments are also intended to enhance investor
protections as well as provide additional clarity regarding the legal obligations of target
companies and others in connection with de-SPAC transactions. We anticipate that the proposed
new rules and amendments would, in the aggregate, increase the burdens and costs to SPACs and
target private operating companies. These estimated burden and cost increases are expected to
result primarily from the proposals to require additional disclosures in SPAC registered offerings
and de-SPAC transactions, including additional disclosures on the sponsor of the SPAC,
potential conflicts of interest, dilution, and the fairness of the de-SPAC transaction. In addition,
the proposed re-determination of smaller reporting company (SRC) status would result in
increased burdens in filing Forms 10-K, Forms 10-Q, Schedules 14A, Schedules 14C, and Form
S-1 for those post-business combination companies that would lose SRC status, which takes into
account the increased incremental burden in providing disclosures pursuant to non-SRC
disclosure requirements. For purposes of the PRA, we estimate that the proposals relating to
Form S-1 will result in a net increase of 365 burden hours and a net increase in the cost burden of
$438,000 for the services of outside professionals.

16

FORM F-1 SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better informed decisions
as to whether to purchase securities in SPAC registered offerings, including initial public
offerings, and in voting, investment and redemption decisions in connection with de-SPAC
transactions. The proposed new rules and amendments are also intended to enhance investor
protections as well as provide additional clarity regarding the legal obligations of target
companies and others in connection with de-SPAC transactions. We anticipate that the proposed
new rules and amendments would, in the aggregate, increase the burdens and costs to SPACs and
target private operating companies. These estimated burden and cost increases are expected to
result primarily from the proposals to require additional disclosures in SPAC registered offerings
and de-SPAC transactions, including additional disclosures on the sponsor of the SPAC,
potential conflicts of interest, dilution, and the fairness of the de-SPAC transaction. For
purposes of the PRA, we estimate that the proposals relating to Form F-1 will result in a net
increase of 12 burden hours and a net increase in the cost burden of $14,400 for the services of
outside professionals.

17

FORM S-4 SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better informed voting,
investment and redemption decisions in connection with de-SPAC transactions. The proposed
new rules and amendments are also intended to enhance investor protections as well as provide
additional clarity regarding the legal obligations of target companies and others in connection
with de-SPAC transactions. We anticipate that the proposals to require additional disclosures in
de-SPAC transactions would increase the compliance burden on SPACs and target private
operating companies, which would be offset, to an extent, by a decrease in compliance burden
from the proposed amendments to Regulation S-X. In addition, we anticipate that proposed Rule
145a would result in an increase in the number of registration statements on Form S-4 and Form
F-4. For purposes of the PRA, we estimate that the proposals relating to Form S-4 will result in
a net increase of 19,843 burden hours and a net increase in the cost burden of $23,811,000 for
the services of outside professionals.

18

FORM F-4 SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better informed voting,
investment and redemption decisions in connection with de-SPAC transactions. The proposed
new rules and amendments are also intended to enhance investor protections as well as provide
additional clarity regarding the legal obligations of target companies and others in connection
with de-SPAC transactions. We anticipate that the proposals to require additional disclosures in
de-SPAC transactions would increase the compliance burden on SPACs and target private
operating companies, which would be offset, to an extent, by a decrease in compliance burden
from the proposed amendments to Regulation S-X. In addition, we anticipate that proposed Rule
145a would result in an increase in the number of registration statements on Form S-4 and Form
F-4. For purposes of the PRA, we estimate that the proposals relating to Form F-4 will result in
a net increase of 815 burden hours and a net increase in the cost burden of $978,600 for the
services of outside professionals.

19

FORM 10-K SHORT STATEMENT
The proposed re-determination of smaller reporting company (SRC) status would result
in increased burdens in filing Forms 10-K, for those post-business combination companies that
would lose SRC status, which takes into account the increased incremental burden in providing
disclosures pursuant to non-SRC disclosure requirements. For purposes of the PRA, we estimate
that the proposals relating to Form 10-K will result in a net increase of 17,580 burden hours and
a net increase in the cost burden of $2,344,000 for the services of outside professionals.

20

FORM 10-Q SHORT STATEMENT
The proposed re-determination of smaller reporting company (SRC) status would result
in increased burdens in filing Forms 10-Q, for those post-business combination companies that
would lose SRC status, which takes into account the increased incremental burden in providing
disclosures pursuant to non-SRC disclosure requirements. For purposes of the PRA, we estimate
that the proposals relating to Form 10-Q will result in a net increase of 2,160 burden hours and a
net increase in the cost burden of $288,000 for the services of outside professionals.

21

REGULATION 14A SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better voting, investment
and redemption decisions in connection with de-SPAC transactions. The proposed new rules and
amendments are also intended to enhance investor protections as well as provide additional
clarity regarding the legal obligations of target companies and others in connection with deSPAC transactions. We anticipate that the proposals to require additional disclosures in SPAC
registered offerings and de-SPAC transactions would increase the compliance burden on SPACs
and target private operating companies, which would be offset, to an extent, by a decrease in
compliance burden from the proposed amendments to Regulation S-X. In addition, the proposed
re-determination of smaller reporting company (SRC) status would result in increased burdens in
filing Schedules 14A for those post-business combination companies that would lose SRC status,
which takes into account the increased incremental burden in providing disclosures pursuant to
non-SRC disclosure requirements. For purposes of the PRA, we estimate that, overall, the
proposals relating to Schedule 14A will result in a net decrease of 645 burden hours and a net
decrease in the cost burden of $86,000 for the services of outside professionals.

22

REGULATION 14C SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better informed voting,
investment and redemption decisions in connection with de-SPAC transactions. The proposed
new rules and amendments are also intended to enhance investor protections as well as provide
additional clarity regarding the legal obligations of target companies and others in connection
with de-SPAC transactions. We anticipate that the proposals to require additional disclosures in
SPAC registered offerings and de-SPAC transactions would increase the compliance burden on
SPACs and target private operating companies, which would be offset, to an extent, by a
decrease in compliance burden from the proposed amendments to Regulation S-X. In addition,
the proposed re-determination of smaller reporting company (SRC) status would result in
increased burdens in filing Schedules 14C for those post-business combination companies that
would lose SRC status, which takes into account the increased incremental burden in providing
disclosures pursuant to non-SRC disclosure requirements. For purposes of the PRA, we estimate
that, overall, the proposals relating to Schedule 14C will result in a net decrease of 87 burden
hours and a net decrease in the cost burden of $11,600 for the services of outside professionals.

23

SCHEDULE TO SHORT STATEMENT
The proposed new rules and amendments are intended to improve the usefulness and
clarity of the information provided to investors so that they can make better informed voting,
investment and redemption decisions in connection with de-SPAC transactions. The proposed
new rules and amendments are also intended to enhance investor protections as well as provide
additional clarity regarding the legal obligations of target companies and others in connection
with de-SPAC transactions. We anticipate that the proposals to require additional disclosures in
SPAC registered offerings and de-SPAC transactions would increase the compliance burden on
SPACs and target private operating companies, which would be offset, to an extent, by a
decrease in compliance burden from the proposed amendments to Regulation S-X. For purposes
of the PRA, we estimate that, overall, the proposals relating to Schedule TO will result in a net
decrease of 14 burden hours and a net decrease in the cost burden of $16,200 for the services of
outside professionals.

24