Yesterday, the Securities and Exchange Commission approved changes to the definition of a “smaller reporting company,” or SRC, that will significantly increase the availability of the less burdensome, scaled disclosure requirements applicable to companies qualifying as SRCs . The amendments increase the public float threshold for qualification as an SRC from less than $75 million to less than $250 million, in each case regardless of the company’s revenues. In addition,… More
Category Archives: Disclosures
Every day it seems there is another outcry over excessive executive compensation at public companies. This year, for the first time, public companies are disclosing ratios of CEO compensation to median employee compensation, and both the media and politicians are quick to highlight pay ratios in excess of 1,000-to-one as evidence of everything that is wrong with executive compensation.
Yet these complaints have a certain air of unreality to them,… More
As noted in our earlier post Pre-IPO Companies can have disclosure obligations too, a recent Rule 701 enforcement action by the SEC has served as a reminder of the pitfalls that exist for private companies with increasing valuations and robust equity compensation programs. Happily, some relief is on the way based on a provision included in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act.… More
This week the SEC staff expanded relief for the disclosure of non-GAAP financial forecasts used in business combinations.
In these transactions, public companies routinely obtain fairness opinions from an investment bank regarding the value of the consideration to be paid to shareholders, and the fairness opinions normally rely on financial projections provided by the company. These projections are often prepared in a way that varies from GAAP and,… More
A recent SEC enforcement action should serve as a potent reminder to pre-IPO and other private companies that SEC rules sometimes impose affirmative disclosure obligations on private companies that offer and sell securities to their employees.
Most well-advised start-ups and other emerging companies know that they need an exemption from the registration requirements of the Securities Act of 1933 in order to grant options or issue other equity awards to their employees.… More