7.01 Part I slips: a risk-factor cross-reference to a heading that does not exist, a leased lodging property called wholly-owned, and four word errors

Company A · a US-listed consumer leisure company · Drafting slip

DraftingLowEstablishedRegulation S-K narrative: business, risk factors and MD&A
Area of the 10-K
Part I narrative: Items 1 and 1A and the executive officer biographies
Year
Latest 10-K
Status
Established: Established from the company’s own documents; the requirement is clear.
Who acts
SEC Reporting, General Counsel
When
Before filing the next Form 10-K

In brief

The stock-price risk factor refers readers to a section headed 'Risks related to our business and industry', which does not exist; the risk it points to sits under 'General Risks' on the same page. Item 1 calls the seven owned lodging properties 'wholly-owned' although one of them, the [property name] [city] [property name], is operated under a long-term lease. Four word errors also appear: '[product description]' (twice), 'complimented by', 'adversely effecting' and 'become senior vice president'.

The evidence, as filed

Masked extract: Form 10-K 2025, page 18
Form 10-K 2025, page 18The risk factor referred to sits under this heading on the same page
Masked extract: Form 10-K 2025, page 21
Form 10-K 2025, page 21Properties table: one lodging property leased from an unrelated party

4 further page extracts: screenshot withheld to protect the company’s identity. The rows below say what each shows.

What the filing shows, and what the rule requires

What the filing showsWhat the rule requires

Cross-reference to a non-existent heading; 'seven owned and operated lodging properties' including a leased lodging property; 'complementary', 'complimented', 'effecting', 'become'.

See 'General Risks - Our business and operations could be negatively affected ...'; 'seven owned or leased and operated lodging properties'; 'complimentary', 'complemented', 'affecting', 'became'.

Why it matters

Readers following the cross-reference find no such heading; the ownership description slightly overstates the owned estate.

Exposure

Drafting only; no filing consequence.

Our workings

Observation

Each slip is shown on its page. The properties table in Item 2 classes one lodging property as leased from an unrelated party, and Item 1 says the [property name] [city] [property name] is operated under a long-term lease, so the group of seven includes a leased lodging property. The cross-reference and the 'complementary' and 'become' slips also appear in the prior-year report.

Management’s best defense, and our reply

The company would say the reader can find the referenced risk factor on the same page and that the [property name] is clearly described as leased two pages later and in the properties table. It would add that none of the slips changes a figure. That is right, which is why these are drafting slips only; they are still worth correcting before the next filing because the cross-reference has now been carried for two years.

The fix

  1. Change the cross-reference to 'General Risks - Our business and operations could be negatively affected ...'; write 'seven owned or leased and operated lodging properties'; correct complimentary, complemented, affecting and became.

Evidence relied on

#What it showsTypeWhere
1Cross-reference to a heading that appears nowhere in the reportDocumentForm 10-K 2025, page 18
2The risk factor referred to sits under this heading on the same pageDocumentForm 10-K 2025, page 18
3All seven described as wholly-ownedDocumentForm 10-K 2025, page 1
4The [state] lodging property among the seven is leasedDocumentForm 10-K 2025, page 7
5Properties table: one lodging property leased from an unrelated partyDocumentForm 10-K 2025, page 21
6Should read complimentary (also later on the same page)DocumentForm 10-K 2025, page 4
7Should read complementedDocumentForm 10-K 2025, page 5
8Should read affectingDocumentForm 10-K 2025, page 13
9Should read becameDocumentForm 10-K 2025, page 22

Prepared by Pramanex from the company’s public SEC filings, without the company’s involvement, to show how a 10-K Pre-filing Check reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other attestation or assurance engagement, and not legal advice. An SEC-style question is a question, not a conclusion.

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