Bass, Berry & Sims

Subscribe to Bass, Berry & Sims's Posts

With the potential for a significant change in the corporate tax rate (35% to 20%) this month as a result of the tax bill in Congress, we are re-posting a potential sleeper issue that could arise for some companies in their Q4 and FYE results. If a tax bill is enacted with a lower corporate…

We thought you may find of interest prepared remarks by SEC Chairman Jay Clayton at the annual Government-Business Forum on Small Business Capital Formation held on November 30, 2017, where he stated, “In the coming months I anticipate that the Commission will consider adopting rules to expand the definition of ‘smaller reporting company’ to permit additional companies to avail themselves of scaled disclosure requirements.” A full transcript of the speech is available at the SEC’s website.

Proposed Rules Would Change Qualifications for Smaller Reporting Companies

As you may recall, in July 2016 the SEC voted to propose amendments that would increase the financial thresholds in the “smaller reporting company” definition. The proposed rules would enable a company with less than $250 million of public float to provide scaled disclosures as a smaller reporting company, as compared to the $75 million threshold under the current definition. The SEC did not, however, propose to increase the $75 million threshold in the “accelerated filer” definition.Continue Reading SEC Chairman Clayton Expects New Rules on Smaller Reporting Company Definition Soon

In monitoring SEC comment letters, we came across this SEC comment letter made public this month. It serves as a reminder to registrants that, when calculating a company’s public float, there is an informal presumption that a 10% or greater stockholder is an affiliate of the company; however, this presumption is rebuttable by the registrant.

The letter stated that “[t]he Staff has consistently taken the position that the determination of ‘control’ status is dependent in large part on the facts and circumstances involved and, therefore, has declined to state definitively what circumstances will result in a person being deemed to be in ‘control’ of an issuer. While the Company recognizes that, as a rule of thumb, more than 10% ownership has become an informal benchmark at which control should be evaluated, such ownership, standing alone, is not dispositive.”Continue Reading SEC Comment about “Affiliate” Stockholder in Public Float Calculation

On October 11, the SEC proposed amendments to modernize and simplify disclosure requirements in Regulation S-K, which were mandated by the Fixing America’s Surface Transportation (FAST) Act. In large part, the proposed amendments follow the recommendations of a November 2016 report from the SEC staff.  As one SEC commissioner put it, the incremental adjustments to Regulation S-K are meant to “prune” the SEC’s existing disclosure regime rather than as “an exercise in slash-and-burn clearcutting.”

Below are six highlights from the SEC’s proposed amendments to Regulation S-K:

  1. Rules for Management’s Discussion and Analysis (MD&A) would be amended to clarify that a registrant need only provide a period-to-period comparison for the two most recent fiscal years presented in the financial statements and may hyperlink to the prior year’s annual report for additional period-to-period comparison. The proposed amendments would require hyperlinks to information that is incorporated by reference if that information is available on EDGAR. Instruction 1 to Item 303(a).

    Continue Reading Six Highlights from the SEC’s Proposed Amendments to Regulation S-K

Now that the SEC’s new rules on exhibit hyperlinks are live as of September 1, 2017, we have updated our March blog post with the frequently asked question below regarding exhibit indexes.

Where should we put the exhibit index now? Can we combine the list of exhibits and the exhibit index?

In connection with the SEC’s March 2017 amendments implementing the hyperlink requirement, the SEC also amended the rules pertaining to the placement of the exhibit index, which had previously required the exhibit index to “precede immediately the exhibits filed with such registration statement.” As amended, Rule 102(d) of Regulation S-T and Rule 601(a)(2) of Regulation S-K now require the exhibit index to “appear before the required signatures in the registrant statement or report.” Although exhibit index practice has varied, there is some ambiguity as to whether the new rules require a separate exhibit index before the signature page and the exhibits themselves. For example, while some companies are combining the exhibit table with the exhibit index and placing the latter before the signature page, others have been retaining a separate exhibit table and exhibit index and move the latter above the signatures.Continue Reading Updated: FAQ on New SEC Rules on Exhibit Hyperlinks – Exhibit Indexes

Last week, the SEC’s Division of Corporation Finance issued updated guidance on processing procedures for draft registration statements. Below is a FAQ summary table we have prepared related to this new guidance.

There are some nuances in the guidance, so please consult with outside securities counsel before omitting any financial statements in your filing. Contact any member of our Corporate & Securities practice for more information.Continue Reading 7 Answers to FAQs About the New SEC Guidance for Draft Registration Statements

With the September 1, 2017, deadline fast approaching for complying with the SEC’s new rules on exhibit hyperlinks, we have updated our March blog post with the frequently asked question below.

How does one link to an exhibit in a 30-year old registration statement that was filed as one gigantic ASCII file? The only available

…

The firm recently released an updated Blueprint for an IPO, a guide to help companies understand the process of going public and the new challenges they will face once their securities are publicly traded. An IPO is at the same time exciting and very demanding on a company’s management team. IPO candidates face for the first time the expansive regulatory scheme administered by the Securities and Exchange Commission (SEC) and must deal with corporate governance processes that are much different than what they had as private companies.

The newly released guide is organized in an easy to use Q&A format detailing many of the ongoing obligations a company will face after it becomes a public company.

Below is a list of the types of questions that are answered in the newest edition of the Blueprint for an IPO.Continue Reading Bass, Berry & Sims Releases Updated Blueprint for an IPO

Last month, the Staff of the SEC’s Division of Corporation Finance announced that, as part of the Division’s ongoing efforts to facilitate capital formation, all issuers are now permitted to submit draft registration statements relating to IPOs and Exchange Act Section 12(b) registration (e.g., spin-offs) to the Staff for nonpublic (i.e., confidential) review.

Previously, nonpublic review was available only to emerging growth companies (EGCs), as authorized by the JOBS Act, and in certain circumstances to foreign private issuers. Nonpublic submission of registration statements makes it possible for companies to avoid alerting the market of offering plans before the company is certain that it will move forward with any offering.Continue Reading SEC Extends Confidential Review of Certain Registration Statements to Non-EGCs

For most companies, the end of June means the end of the second fiscal quarter, which means right now you are hard at work finalizing the company’s interim financial statements and preparing its Form 10-Q for an August filing deadline. The end of the second quarter also means that it is time to check the company’s filing status for Exchange Act reports for fiscal 2018.

Know Your Filing Status

While the determination of whether a company will qualify as an “accelerated filer” or “large accelerated filer” for 2018 will not take effect until the date your Form 10-K is filed for fiscal 2017 (or, if earlier, your 10-K due date), the determination of your public float is calculated as of the last business day of the most recently completed second fiscal quarter, or June 30 for companies with a calendar fiscal year. Below are reminders for the different types of filers.Continue Reading The Results Are In – Now it’s Time to Check Your Filing Status

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

Thought Leadership by our Attorneys.