In a series of recent public statements (most recently in February 2018), the SEC has encouraged companies to pursue relief under Rule 3-13 of Regulation S-X—the regulation that specifies the form and content of financial statements required by public companies. Pursuant to Rule 3-13, the SEC Staff may permit the omission of financial statements that are otherwise required under Reg S-X or the substitution of such required financial statements with other statements of comparable character.… More
Category Archives: SEC Reporting
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
Effective September 1, 2017, public companies will be required to include hyperlinks to each exhibit listed in the exhibit index to a registration statement or report. Exhibits filed in eXtensible Business Reporting Language (XBRL) or exhibits filed with Form ABS-EE are excluded from this requirement. This requirement will make all exhibits to a filing, including those incorporated by reference from earlier filings, more easily accessible to investors. Companies should plan for additional review time,… More
The JOBs Act was signed into law on April 5, 2012 and created Emerging Growth Companies, or EGCs, which are eligible to comply with reduced disclosure and other requirements under the federal securities laws.
The definition of an EGC, which in general is a company with annual gross revenues of less than $1 billion during its most recent fiscal year, is expansive. Over 80% of IPOs since the JOBs Act have been completed by EGCs. … More
The Staff has confirmed that the (often forgotten) requirement that public companies mail seven copies of their glossy annual report to the SEC may be satisfied by posting an electronic version of the report on the company’s corporate website. The report must remain accessible for at least one year after posting.
Public companies are already required to post proxy materials, which include proxy statements on Schedule 14A,… More
Instead of requiring an annual “say on pay” vote, rules implemented pursuant to the Dodd‑Frank Act require that an advisory vote on executive compensation occur at least once every three years. To further complicate matters, at least once every six years stockholders must also be given an opportunity to vote separately on whether the “say on pay” vote should occur every year, every other year or every three years.… More
The SEC routinely advises companies drafting risk factors to start from a blank sheet of paper and avoid boilerplate. As with many best practices, this recommendation is often aspirational.
Most companies do, however, take care in reviewing last year’s risk factors to make any necessary updates and additions. As public companies prepare their annual reports on Form 10-K for fiscal 2016, they should consider the blank sheet of paper and think carefully about how their business risks are likely to change in 2017 as a result of the new political environment.… More
Public companies listed on NASDAQ are now required to disclose annually certain payments (if any) made by third parties to their directors or director nominees.
D&O questionnaires related to the annual meeting of stockholders should include a question to determine whether there are any agreements, arrangements or understandings between a director or director nominee and any person (other than the company) relating to compensation or other payments (including non-cash payments) in connection with the director’s or director nominee’s service or candidacy as a director.… More