March 21, 2006
Nothing really new here, but as a micro-cap company the costs of creating and then maintaining SOX 404 documentation and control is far greater than benefits to our shareholders. My company trades about $5,000 a day in stock. Spread over a whole year this is about $1.2M. Our incremetal costs to our shareholders is about $200,000 per year. There is no noticeable return to them. It is in our shareholders' best interest to invest this money in RD or Sales to grow the company.
I am also very concerned about the longer term impact on capital formation within the US given this costly regulation, yet I have no data to support such a thought.
I fully support the revisions that are being contemplated for Small Cap and Micro Cap companies.