6.07 Wording slips in the debt, property and income-tax notes
Company H · a US-listed aerospace services company · Drafting slip
In brief
The debt note says the new term loans were fully drawn on [date], while the same note and the prior Form 10-K put the draw at the [date] closing. Three other phrases need tidying: construction-in-progress balances described as 'for the years ended', 'based on a achieving', and 'the United States. for 2019 onward'. The prior-year Form 10-K had the same construction-in-progress sentence, with the stray 'and' and 'for the years ended' for the year-end balances of [amounts]. The prior-year Form 10-K already carried the 'based on a achieving' and 'write off unamortized' wording in the debt note (page 98), 'Additions charge to income tax expense' in the valuation allowance table (page 104) and 'the United States. for 2019', all repeated in the current 10-K; it gave the term-loan draw date correctly as [date] (page 98).
The evidence, as filed
1 further page extract: 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 shows | What the rule requires |
|---|---|
'fully drawn on [date]'; 'which totaled [amounts] and for the years ended [date] and 2024'; 'based on a achieving'; 'open to examination in the United States. for 2019 onward'. | 'fully drawn on [date]'; 'which totaled [amounts] as of [date] and 2024'; 'based on achieving'; 'open to examination in the United States for 2019 onward'. |
Why it matters
A reader comparing the two Forms 10-K sees two different draw dates for the same loans.
Exposure
None.
Our workings
The New Credit Agreement closed on [date] and, by the note's own account, the term loan proceeds were used at that closing to repay the prior facilities; the prior Form 10-K said the term loans were fully drawn on [date]. The other three items are grammar slips, all three carried over from the prior Form 10-K.
Management’s best defense, and our reply
Management would say the date is a narrative slip that changes no amount and that the closing date is stated correctly elsewhere on the same page. That is right, which is why this is a drafting slip and not a finding; the wording should still match the prior Form 10-K.
The fix
- Correct the four phrases as set out above in the next Form 10-K.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | Draw date given as [date] | Document | Form 10-K 2025, page 99 |
| 2 | Same note: the agreement closed, and the term loan proceeds were used, on [date] | Document | Form 10-K 2025, page 99 |
| 3 | Year-end balances described as 'for the years ended', with a stray 'and' | Document | Form 10-K 2025, page 97 |
| 4 | Stray article 'a' | Document | Form 10-K 2025, page 100 |
| 5 | Stray full stop | Document | Form 10-K 2025, page 108 |
| 6 | Prior-year property note opens the construction-in-progress sentence that recurs in the current 10-K | Document | Form 10-K 2024 (prior year), unnumbered page |
| 7 | Same slip in the prior year: a stray 'and' and 'for the years ended' for balances held at the year-end dates | Document | Form 10-K 2024 (prior year), unnumbered page |
| 8 | The same 'based on a achieving' slip in the revolving credit facility paragraph of the prior-year debt note: the slip has been carried forward, not introduced in the fiscal 2025 10-K | Document | Form 10-K 2024 (prior year), page 98 |
| 9 | The prior-year 10-K gives the correct draw date ([date], the closing date of the New Credit Agreement); the fiscal 2025 10-K changed it to [date] | Document | Form 10-K 2024 (prior year), page 98 |
| 10 | The words 'write off unamortized' (the word 'of' missing) appear in the prior-year debt note and recur in the same paragraphs of the fiscal 2025 10-K | Document | Form 10-K 2024 (prior year), page 98 |
| 11 | Second instance of the same slip in the prior-year Prior Term Loan paragraph (unnumbered continuation page) | Document | Form 10-K 2024 (prior year), unnumbered page |
| 12 | The stray full stop after 'United States' in the income-tax note was already in the prior-year 10-K (unnumbered continuation page) | Document | Form 10-K 2024 (prior year), unnumbered page |
| 13 | Valuation allowance roll-forward caption 'Additions charge to' (for 'charged to'), a slip that recurs in the fiscal 2025 income-tax note | Document | Form 10-K 2024 (prior year), page 104 |
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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