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 “link” would be to the whole file.

Based on recent informal Staff discussions relating to this question, we were instructed that the filer should hyperlink to the ASCII filing containing the exhibit and clearly identify the hyperlinked exhibit that is being incorporated by reference from the ASCII filing. By way of example, the hyperlink description could look something like this:

3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Form S-1 Registration Statement filed with the SEC on XX XX, XXX) (File No. XXX-XXXXXX)

Alternatively, the registrant could voluntarily choose to re-file the old exhibit with the present filing.

If you have any questions regarding any of the topics covered in this blog post, please feel free to contact a member of our Corporate & Securities practice group or, if applicable, contact your primary Bass, Berry & Sims relationship attorney.

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

The new SEC Chairman, Jay Clayton, testified on June 27 to the Senate Appropriations Subcommittee about the SEC’s budget request. His comments clearly show that rulemaking is in the pipeline at the Staff level to facilitate capital formation in the public markets. In this regard, Chairman Clayton states, “U.S. capital markets remain the envy of the world, but fewer companies are choosing to enter the public capital markets than in the past, and, as a result, investment opportunities for Main Street investors are more limited.” The following is an excerpt of Chairman Clayton’s comments.

Continue Reading Testimony on the Fiscal Year 2018 Budget Request

In monitoring SEC comment letters, we came across this SEC comment letter made public last week. It serves a reminder to registrants about their loss contingency disclosures, particularly those involving a “reasonably possible” loss per ASC 450.  In the letter the SEC staff comments, “In regards to this [disclosed litigation] matter as well as any additional matters for which you believe it is at least reasonably possible that a material loss has been incurred but are unable to estimate the amount of loss, please supplementally tell us (a) the procedures you undertake on a quarterly basis to attempt to develop a range of reasonably possible loss for disclosure and (b) the specific factors that are causing your inability to estimate and when you expect those factors to be alleviated for each matter.” 

Continue Reading SEC Comment About “Reasonably Possible” Litigation Loss

I wrote an article published by Securities Regulation Daily discussing the upcoming “say-when-on-pay” votes that many companies will hold during their annual meetings this year. Because Dodd-Frank mandates that the vote be held every six years, a great portion of companies last held the say-when-on-pay vote immediately following the enactment of Dodd-Frank in 2011 and must vote again in 2017. The say-when-on-pay vote is a non-binding advisory referendum on the frequency of a non-binding advisory vote regarding executive compensation.

While the vote was relatively anticlimactic in 2011 due to the wide regard many institutional shareholders held for annual say-on-pay votes, it is worth noting the importance of the Form 8-K disclosure requirements in relation to the vote.

To review details on these technical requirements as outlined in the full article – download PDF. The full article, “Annual Meeting 8-K: Don’t Forget Say-When-on-Pay Determination,” was published by Securities Regulation Daily on June 15, 2017.

In monitoring SEC comment letters, we came across this SEC comment letter made public today, which we thought of particular interest to our readership given its direct application to almost all public companies. In the letter, the SEC Staff expressly concludes that simply including a URL address in an earnings press release that directs readers to a website where the non-GAAP reconciliation is located does not comply with the requirements in Item 10(e)(1)(i) of Regulation S-K (i.e., “must include….in the filing…a reconciliation”) and the general rules regarding disclosure of non-GAAP financial measures outlined in Regulation G (i.e., “must accompany that non-GAAP financial measure with…a reconciliation”). Although this is the Staff’s current position, we believe this may be an interesting area to watch in light of the SEC’s recent rulemaking in the hyperlinking space (see this post) as well as continued innovation in electronic communication and IR practices.

Continue Reading SEC Staff Says No to Hyperlinking Non-GAAP Reconciliations in the Earnings Press Release

Last week, as reported by The Wall Street Journal, POLITICO and others, the House voted for a sweeping rewrite of the Dodd-Frank Act. According to Politico, “The legislation, approved without a single Democratic vote, represents the GOP’s opening salvo in the debate over easing the rules on the financial system, a move sparked by the election of President Donald Trump and Republican control of Congress.”

For our prior coverage of the CHOICE Act, see these posts here and here.

Below are three takeaways on the CHOICE Act passage:

  • There is a strong GOP push to significantly revise the rules governing Wall Street. In addition to the CHOICE Act, on Monday, June 12, the U.S. Department of the Treasury released its much anticipated financial regulatory reform report. This report stems from the President’s February 2017 Executive Order on “Core Principles for Regulating the U.S. Financial System” where the Secretary of the Treasury was to “identify any laws, treaties, regulations, guidance, reporting and record keeping requirements, and other Government policies that inhibit Federal regulation of the U.S. financial system in a manner consistent with the core principles.”

Continue Reading 3 Takeaways from the Recent House Passage of the Financial CHOICE Act

The Wall Street Journal yesterday published an interesting article regarding the SEC Staff’s attention to non-GAAP financial measure disclosure issues in the SEC comment letter process. The article highlights the ongoing focus of the SEC staff on non-GAAP financial disclosure issues following the revised (and more stringent) non-GAAP financial guidance promulgated by the SEC in the spring of 2016, as well as inquiries that were received from a sizeable number of public companies in 2016 from the SEC Division of Enforcement focused on non-GAAP compliance. Continue Reading SEC Staff Continues Focus on non-GAAP Financial Disclosures

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

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