Misstatements in the certifications can result in fines and, if willful or deliberate, can result in imprisonment of the CEO and CFO. Section 906 of Sarbanes-Oxley provides for an additional certification by the CEO and the CFO that the report to which the certification applies complies with the requirements of the Exchange Act 2 and that the information in the report fairly presents, in all material respects, the financial condition and results of operations of the company as of and for the periods specified. The form of certification has been developed by the SEC and may not be varied or altered. Section 302 of Sarbanes-Oxley mandates that the chief executive officer (the “CEO”) and the chief financial officer (the “CFO”) of each company filing periodic reports under the Exchange Act certify in each Annual Report on Form 10-K (the “10-K Report”) and Quarterly Report on Form 10-Q (the “10-Q Report”) that they have reviewed the report, that the report does not contain an untrue statement of a material fact or omit such a fact, that the financial statements and financial information in the report fairly present, in all material respects, the financial condition and results of operations of the company for the periods specified and, among other items, acknowledge that they are responsible for establishing and maintaining internal controls, have designed the controls to ensure that material information is made known to the officers, and have evaluated the effectiveness of such controls within the prior 90 days. Companies that have issued material restatements of their financial results, experienced significant volatility in their stock price relative to other public companies, or have the largest market capitalizations, emerging companies with disparities in price to earnings ratios, and companies whose operations significantly affect a material sector of the economy, may anticipate more frequent SEC review. Sarbanes-Oxley requires the SEC to review each filing company’s reports at least once every three years. These reports, summarized below, update on a continuing basis material information with respect to the company and are subject to numerous formal requirements. Upon successful completion of its IPO, registration of its common stock under Section 12(g) of the Exchange Act and listing the common stock on Nasdaq, the newly public company is required to file periodic and other reports with the Securities and Exchange Commission (the “SEC”) and Nasdaq. Company Responsibilities under the Exchange Act Periodic Reporting Requirements 1 The responsibilities and obligations arise predominantly under the Exchange Act, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), Nasdaq rules and state corporate law (typically Delaware), although we have also highlighted below certain registration requirements under the Securities Act of 1933, as amended (the “Securities Act”), that may be of immediate concern to newly public companies. This article provides an overview of various responsibilities and obligations of a company and its officers and directors following an initial public offering (“IPO”) of the company’s securities (almost always common stock) in the U.S., the registration of the common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the listing of the shares on the Nasdaq Stock Market (“Nasdaq”).
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