S-K 503(c)

Risk Factors

SEC disclosure item

Now required in Forms 10-K / Form 10

SEC recommends

Helps establish "bespeaks caution" defense

Discuss the most significant factors that make the offering speculative or risky

S-K Item 503 applies to:

S-K Index

General

Preamble to S-K 503 Plain English applies

The registrant must furnish this information in plain English. See Rule 421(d) of Regulation C of this chapter.
GPO version

S-K 503(c) Risk factors

Risk factors. Where appropriate, provide under the caption "Risk Factors" a discussion of the most significant factors that make the offering speculative or risky. This discussion must be concise and organized logically. Do not present risks that could apply to any issuer or any offering. Explain how the risk affects the issuer or the securities being offered. Set forth each risk factor under a subcaption that adequately describes the risk. The risk factor discussion must immediately follow the summary section. If you do not include a summary section, the risk factor section must immediately follow the cover page of the prospectus or the pricing information section that immediately follows the cover page. Pricing information means price and price-related information that you may omit from the prospectus in an effective registration statement based on Rule 430A(a) of this chapter. The risk factors may include, among other things, the following:

1. Your lack of an operating history;
2. Your lack of profitable operations in recent periods;
3. Your financial position;
4. Your business or proposed business; or
5. The lack of a market for your common equity securities or securities convertible into or exercisable for common equity securities.

Lack of operating history

Lack of profitable operations

Financial position

Business or proposed business

Lack of trading market

Geffon v Micrion Fed Sec L Rep (CCH) 91 419
(1st Cir 2001)

Inclusion of a risk factor section in a Form 8-K helped defeat claims that the company made materially misleading statements regarding its sales

SEC Releases

Applies To

S-K 503(c) applies to

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