I have blogged on Sarbanes-Oxley before, here
Well, here it is
in black and white and on file at the SEC - exactly what SARBOX has achieved:
"Collins Industries, Inc. (OTC: COLL)announced today that its Board of Directors has approved a plan to terminate theCompany's obligation to file reports with the Securities and Exchange Commission(the "SEC"). This would be accomplished through a 1-for-300 reverse stock splitof the Company's outstanding common stock to be followed immediately by a300-for-1 forward stock split
(the "Reverse/Forward Stock Split"). If thetransaction is completed, the Company expects to have fewer than 300shareholders of record. As a result, the Company would no longer be required tofile periodic reports and other information with the SEC, although the Companyanticipates that its stock will continue to be quoted on the Pink Sheets."
Translation: "We buy out small shareholders. We no longer have to file financials. Our stock will cease to be traded on the most transparent, fair and investor-friendly exchange to one that is notoriously much less so."
"In addition to significantanticipated cost savings
resulting from the elimination of these reportingrequirements, we expect that the reduced burden on management will allow ourofficers to focus more attention on improving our operating performance andserving our customers and the communities where we operate. Further, the Companywill be able to avoid significant costs associated with Sarbanes-Oxley Section404 compliance."
Translation: "Sarbanes-Oxley has tipped the scales, it no longer is worth being a public company if you are small."
So, let's review. The law that was supposed to ensure greater transparency and make the stock market
safe for all of us, especially the little guy, is driving companies to purge the little guy, become less transparent, and shun our world-class public capital markets.
Score another beaut for the Great Sausage Factory!
UPDATE: Here's more direct from the proxt statement:
Q: What are some of the advantages of the Reverse/Forward Stock Split?
A: The Special Committee and the Board of Directors believe that theReverse/Forward Stock Split will have, among others, the following advantages:
• The Company will terminate the registration of its Common Stock under the Exchange Act, which will eliminate the significant tangible and intangible costs of being a public reporting company, including the initial costs of compliance with Section 404 of Sarbanes-Oxley of $1,500,000, and the annual costs of compliance with Sarbanes-Oxley and related regulations (with estimated tangible costs savings/cost avoidance of approximately $845,000 before taxes annually, consisting of (i) $200,000 in annual costs historically incurred, (ii) $550,000 in annual costs that would otherwise be expected to be incurred in order to comply with Section 404 of Sarbanes-Oxley, and (iii) $95,000 in annual costs that would otherwise be expected to be incurred in order to comply with other provisions of Sarbanes-Oxley).