When this disclosure first became required in 2011, plenty of companies failed to provide it in a timely manner. Such failure can cause the company to lose its S-3 eligibility. In addition, a company would not be eligible to file a new S-8 until it corrects its non-compliance and the failure could be a breach of covenants under financing and similar agreements.
With respect to S-3 eligibility, under certain conditions, the SEC may waive the company’s non-compliance. This requires the company to submit a timely waiver request (which can be relatively lengthy) and of course there is no certainty that the waiver will be granted.