6.01 Six wording and label slips in Items 1C, 5, 7 and 7A
Company D · a US-listed cloud communications software company · Drafting slip
In brief
Item 1C says the information security management system has been certified to ISO/IEC [n]:2013; that edition was superseded by the 2022 edition and the transition period for [n]-edition certificates ended on [date], before the year end, so the sentence should name the edition held at the filing date. Part II of the 10-K is headed 'PART II - OTHER INFORMATION', the Form 10-Q title, while the contents page prints 'PART II'. The performance graph legend names the 'S&P [n] Technology Index' where the text above it names the S&P [n] Information Technology Index. Item 1C refers to personal information of 'our members', a term the company does not otherwise use for its customers. MD&A says the gross margin of [n]% 'increased by 2%' against [n]%: the change is two percentage points, not two per cent. Item 7A says [n] of 2025 revenue was generated 'outside North America', although the geographic note now labels the same split 'United States' and 'International', after the company told the staff in [date] that its 'North America' meant the United States and that it would relabel. The heading, the 'members' wording, the per-cent wording and the Item 7A label also appeared in the prior-year 10-K.
The evidence, as filed
What the filing shows, and what the rule requires
| What the filing shows | What the rule requires |
|---|---|
Certification stated against ISO/IEC [n]:2013; Part II heading 'PART II - OTHER INFORMATION'; legend 'S&P [n] Technology Index'; 'our members' in Item 1C; gross margin [n]% against [n]% described as 'increased by 2%'; Item 7A: revenue 'generated outside North America' ([n]%, [n]% and [n]% for 2025, 2024 and 2023) | The edition and status of the certification held at the filing date; 'PART II'; one index name in the text and the legend; 'our customers' (or the intended term); 'increased by two percentage points'; 'generated outside the United States' in Item 7A, matching the geographic note |
Why it matters
None on the figures; the slips weaken the polish of a filing the staff reviewed in 2024.
Exposure
No regulatory consequence
Our workings
the five passages are printed as quoted on the pages cited (the certification sentence is word for word the same as in the prior-year 10-K); the contents page uses 'PART II' and the graph lead-in names the S&P [n] Information Technology Index.
Item 7A on p.79 gives revenue generated outside North America as [n]%, [n]% and [n]% for 2025, 2024 and 2023; the geographic note on p.113 labels the split 'United States' and 'International', and in its [date] reply to the staff the company said its 'North America' was equivalent to the United States and that it would revise the label in future filings.
International revenue of [n] against total revenue of [n] gives [n]%, 12.0% and 14.5%, which round to the percentages printed, so only the label differs.
each is a label or wording slip; no figure, required disclosure or conclusion changes.
Management’s best defense, and our reply
Management would say none of these changes a figure or misleads an investor: the heading still introduces Items 5 to 9C, the index is the same index under a shorter name, and readers understand a margin change in points. The answer: that is why they are drafting slips and not findings, but three of them have now run for two years and each is a one-line fix.
The fix
- Name the ISO/IEC [n] edition and certification actually held at the filing date; head Part II 'PART II'; use one index name in text and legend; replace 'our members' with 'our customers'; write 'increased by two percentage points'.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | certification stated against the 2013 edition of ISO/IEC [n] | Document | Form 10-K 2025, page 56 |
| 2 | Part II heading uses the Form 10-Q title | Document | Form 10-K 2025, page 59 |
| 3 | the contents page prints the Part II heading as 'PART II' | Document | Form 10-K 2025, page 1 |
| 4 | graph lead-in names the S&P [n] Information Technology Index | Document | Form 10-K 2025, page 59 |
| 5 | the graph legend below this line reads 'S&P [n] Technology Index' | Document | Form 10-K 2025, page 60 |
| 6 | Item 1C refers to 'our members' | Document | Form 10-K 2025, page 57 |
| 7 | a percentage-point change described as a per-cent change | Document | Form 10-K 2025, page 66 |
| 8 | gross margin [n]% in 2025 against [n]% in 2024 | Document | Form 10-K 2025, page 66 |
| 9 | same heading in the prior-year 10-K | Document | Form 10-K 2024 (prior year), page 59 |
| 10 | same 'members' wording in the prior-year 10-K | Document | Form 10-K 2024 (prior year), page 56 |
| 11 | same per-cent wording for a percentage-point change in the prior-year 10-K | Document | Form 10-K 2024 (prior year), page 66 |
| 12 | Item 7A still uses the North America label | Document | Form 10-K 2025, page 79 |
| 13 | The company told the staff that North America means the United States and undertook to relabel | Document |
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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