Category Archives: SEC Regulations

2015 SEC Reporting Rules Guidebooks are in: Forms 10-K, 10-K, 8-K, SD and Proxy Statements

We are pleased to provide you with our annual updated editions of the SEC Reporting Rules for Forms 10-K, 10-Q, 8-K, SD and SEC Reporting Rules for Proxy Statements.



These publications are an excellent reference source for legal and accounting professionals and corporate executives.

  • FREE
  • 680 pages
  • Up-to-date for 2015 including in-depth information on Form SD
  • Detailed table-of-contents for quick reference

In addition to outlining the applicable laws, regulations and rules, these guidebooks seek to provide practical guidance reflecting, among other things, interpretive guidance issued by the Securities and Exchange Commission, general industry practice and the authors’ experience. In addition, we eliminate many cumbersome citations and provide “plain English” rule references.

CLICK HERE: These are printed guidebooks. There are no fees to receive these resources. Please expect a call to confirm your shipping address.  

Thank you and have a nice weekend.

2015 SEC filing calendar – don’t miss a deadline or holiday closing

This is the shortest post you’ll ever read hereClick here to download our 2015 SEC filing calendar. 

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Top SEC transactions law firms: Q1 – Q3 2014

In plain English, a capital markets transaction is an extremely important contract. For a soon-to-be public company, an S-1 is thee most important contract. However, as discussed last week, (read here) there are many types of transactions – across all three main exchanges: OTC Markets, Nasdaq and NYSE.

Total transactions count for the first two-thirds of 2014 is 1,858… and all of these transactions needed a law firm – if not two or more. In fact, the 1,858  transactions counted listed 450 different law firms. Below is a graph of the top twelve, by transaction count.

We carefully track all capital markets transactions as Vintage executes the drafting sessions for law firms. We have become the intelligent value for transactions: in-house, at a corporate or law office and now more increasing, 100% virtual. You can see an in-house drafting session in this video.


Top twelve, in order of Q3 ranking. Click to enlarge.

If you are interested in this topic, please click here and opt-in to receive a weekly (Monday) update of transactions and law firms via email.

We also have a whitepaper that explains the ping-pong match an S-1 file plays between an issuer and the SEC. Click here to download it.

Have a great week

Emerging Growth Company Qualification

Confidential IPO filings have become the new normal for a large percentage of our S-1 clients in 2014. The JOBS Act gave this “elbow room” to any company defined as an Emerging Growth Company. Recently, we had a client that was not actually sure IF they qualified as an EGC. 


A corporate issuer qualifies as an emerging growth company if its total gross revenues were less than $1 billion (or the foreign currency equivalent, calculated on the basis of U.S. GAAP or IFRS) during its most recently completed fiscal year. Qualification as an emerging growth company is available to both U.S. issuers and foreign private issuers.

An issuer will maintain its emerging growth company status until the earliest of:

  • The end of the fiscal year during which its total gross revenues exceed $1 billion
  • The end of the first fiscal year after the fifth anniversary of its IPO
  • The date on which it will have issued more than $1 billion in non-convertible debt during the previous three-year period
  • The date on which it becomes a “large accelerated filer,” which generally refers to an issuer that: a.) had an aggregate worldwide market value of voting and non-voting common equity held by its non-affiliates of $700 million or more, as of the last business day of its most recently completed second fiscal quarter; b.) has been subject to the requirements of Section 13(a) or 15(d) of the Exchange Act for a period of at least 12 calendar months; c.) has filed at least one annual report pursuant to Section 13(a) or 15(d) of the Exchange Act; and d.) is not eligible to use the requirements for “smaller reporting companies” for its annual and quarterly reports.

Accommodations for Emerging Growth Companies

The JOBS Act provides emerging growth companies with various accommodations, including relaxed disclosure, corporate governance, accounting and auditing requirements. The following summarizes the key JOBS Act accommodations for emerging growth companies.

Disclosure Requirements

In an IPO, an emerging growth company is only required to present two years (instead of three years) of audited financial statements in its IPO registration statement. Furthermore, for later registration statements or periodic reports filed under the Exchange Act, an emerging growth company will not be required to present selected financial data as required by Item 301 of Regulation S-K for any period prior to the earliest audited period presented in its IPO registration statement.

Significantly, emerging growth companies are only required to comply with the scaled executive compensation disclosure requirements that apply to smaller reporting companies under Item 402 of Regulation S-K. For example, an emerging growth company is not required to include a Compensation Discussion and Analysis in its proxy statements. In addition, emerging growth companies will not have to comply with the “pay-for-performance” and “CEO pay ratio” disclosure rules required to be adopted by the SEC under Section 953 of the Dodd-Frank Act.

Although the JOBS Act exempts emerging growth companies from providing the disclosures listed above, emerging growth companies may nevertheless wish to include such disclosures for commercial or competitive reasons, or to ensure that the absence of such disclosures does not render existing disclosure misleading.

Corporate Governance

An emerging growth company is not required to have its independent registered public accounting firm provide an attestation report on the company’s internal control over financial reporting, as required by Section 404(b) of the Sarbanes-Oxley Act. Emerging growth companies are also exempt from the requirement to hold a shareholder advisory vote on executive compensation (say-on-pay) or shareholder advisory vote on golden parachute compensation at any shareholders’ meeting to approve a merger or similar transaction.

Accounting and Auditing Requirements

Emerging growth companies are not required to comply with any new or revised financial accounting standard until a private company would be required to comply with the standard. Emerging growth companies also will not be required to comply with PCAOB rules adopted after the enactment of the JOBS Act, unless the SEC determines otherwise.

On December 17, 2012, the SEC determined that new PCAOB rules for improving communications between auditors and audit committees should apply to emerging growth companies. In its approval order, the first to address application of new PCAOB rules to emerging growth companies, the SEC stressed that the JOBS Act did not establish a “presumption” that new PCAOB rules should not apply to emerging growth companies. Rather, the SEC may require an emerging growth company to comply with a new PCAOB rule whenever the SEC finds that compliance is necessary or appropriate in the public interest, after considering the protection of investors and whether the rule will promote efficiency, competition and capital formation.

Shareholder Communications

The JOBS Act softens restrictions on communications between securities analysts and potential investors and between securities analysts and the management of an emerging growth company. Emerging growth companies are allowed greater flexibility to communicate with potential institutional investors about a securities offering both before and after the filing of the registration statement so that the company can “test the waters” to determine investor interest in the securities offering. These “test the waters” communications must be limited to institutional investors that are either “qualified institutional buyers” or “accredited investors.” Qualified institutional buyers or “QIBs” are defined generally as institutions that own and invest at least $100 million in securities on a discretionary basis. In general, for an entity to be considered an accredited investor, it must have total assets in excess of $5 million.

Research Coverage

The JOBS Act makes it easier for brokers and dealers to provide research coverage of an emerging growth company, even if participating in the company’s registered equity offering, by allowing the broker or dealer to publish and distribute research reports about the emerging growth company and its securities both before and after the filing of the registration statement without violating the gun-jumping rules under Section 5 of the Securities Act.

Confidential Treatment

In an IPO, an emerging growth company is permitted to submit drafts of its IPO registration statement and amendments confidentially to the SEC so long as they are filed publicly 21 days before the company conducts a road show. Confidential treatment extends to all correspondence related to the SEC’s review of the IPO registration statement and amendments.

In addition to the emerging growth company accommodations described above, Title I of the JOBS Act directs the SEC to review Regulation S-K to determine how to modernize and simplify the registration process and reduce the burdens on emerging growth companies. The JOBS Act directs the SEC to provide a report to Congress by October 2, 2012 containing its specific recommendations on improving the registration process. As this handbook goes to publication, the SEC had not yet provided this report to Congress.

Have a great day.



A review of Section 16 filing responsibilities

With all the attention on High Frequency Trading and some pundit viewpoints that they are insider trading, here is a review of insider trading from an issuer perspective.

There are three types of corporate insiders for purposes of Section 16: officers, directors and greater than 10% shareholders. We refer to these three types of corporate insiders collectively as Section 16 insiders.

The company officers subject to Section 16 are:

  • The president
  • The principal financial officer
  • The principal accounting officer (or, if there is no such accounting officer, the controller)
  • Any vice president in charge of a principal business unit, division or function (such as sales, administration or finance)
  • Any other officer who performs a significant policy-making function
  • Any other person who performs similar policy-making functions for the company

Section 16 insiders must file reports with the SEC disclosing their beneficial ownership of and transactions in a public company’s equity securities. The three forms on which Section 16 insiders must make these reports – Forms 3, 4 and 5.

insiderForm 3: Initial Statement of Beneficial Ownership of Securities.

Section 16 insiders must file an initial report on Form 3 with the SEC within 10 days of becoming subject to Section 16. For a person who is elected an officer or director of a company that already has a class of equity securities registered under Section 12, the 10-day period begins when the person becomes an officer or director. Section 929R of the Dodd-Frank Act amended Section 16 of the Exchange Act to authorize the SEC to establish by rule a shorter time period within which a new Section 16 insider would be required to file a Form 3. As this handbook goes to publication, the SEC has not proposed any rule change that would shorten the current 10-day reporting window.

Persons who are officers, directors or greater than 10% shareholders of a company that registers a class of equity securities (and did not previously have a class of registered equity securities) are required to file a Form 3 on the effective date of the company’s registration statement. In any case, the Form 3 must disclose all equity securities of the company that the Section 16 insider beneficially owned on the date the person became subject to Section 16. Even if a director or officer owns no securities on the date he or she becomes a Section 16 insider, he or she is still required to file a Form 3.

In certain circumstances, the Section 16 insider should file an initial Form 3 earlier than is required. As discussed below, a Section 16 insider generally must report changes in his or her beneficial ownership of the company’s equity securities on Form 4 within two business days. If the Section 16 insider’s beneficial ownership of the company’s equity securities changes during the 10-day period before he or she must file a Form 3 (e.g., where a new director is granted restricted stock upon his or her appointment), the SEC recommends that the Section 16 insider file an initial Form 3 concurrently with a Form 4 reporting the change, notwithstanding that the rules permit the Form 3 to be filed at a later date.

Form 4: Statement of Changes in Beneficial Ownership.

After filing a Form 3, a Section 16 insider must report any subsequent change in beneficial ownership of the company’s equity securities by filing a Form 4 within two business days, unless the transaction is exempt from reporting or is eligible for deferred reporting.

Transactions that must be reported on Form 4 include, but are not limited to:

  • Non-exempt purchases and sales of equity securities held in the Section 16 insider’s name
  • Transactions involving equity securities held by others but that the Section 16 insider is deemed to beneficially own (i.e., equity securities in which the Section 16 insider has a “pecuniary interest,” as discussed above)
  • Exercises or conversions of derivative securities
  • Acquisitions and grants of any of the company’s equity awards (including options), even if not presently exercisable
  • Entry into various other derivative transactions, including equity swaps and similar hedges
  • Awards to non-employee directors made pursuant to equity incentive plans
  • Equity securities received from a non-exempt dividend reinvestment
  • Dispositions of equity securities to the company (e.g., the company’s retention of shares to pay the Section 16 insider’s tax withholding obligation upon the exercise of stock options)
Click the image to request our free Corporate Governance Handbook.

Click the image to request our free Corporate Governance Handbook.

Following an IPO, the directors and officers of the company before it became public may be required to report certain pre-IPO transactions in the company’s equity securities. Such a filing obligation may arise if the director or officer engages in a reportable transaction less than six months after the date that the company’s registration statement becomes effective. In such event, the director or officer is required to “look back” for a period of six months from the date of the reportable transaction and report on its first required Form 4 any transactions in the company’s equity securities that occurred during that period. Persons who are Section 16 insiders by virtue of being greater than 10% shareholders are not subject to six-month look-back periods. Likewise, a covered officer or director may be required to report transactions that occur after the company ceases to be a public company (i.e., because of termination of its Section 12 registration and reporting obligations). An otherwise reportable transaction occurring after the company is no longer public will be reportable on Form 4 if (and only if) the transaction is not exempt from Section 16(b) and occurs within six months of an “opposite way” transaction that was also subject to Section 16(b) and occurred while the company was public. For purposes of this rule, an acquisition and subsequent disposition (or vice versa) are considered “opposite way” transactions.

A covered officer or director may also be required to report transactions that occur after the termination of that person’s officer or director status. An otherwise reportable transaction occurring after the cessation of a person’s officer or director status will be reportable on Form 4 in the same circumstance as a transaction that occurs after a company ceases to be public (i.e., if (and only if) the transaction is not exempt from Section 16(b) and occurs within six months of an “opposite way” transaction that was also subject to Section 16(b) and occurred while the person was still a director or officer). A person who is a Section 16 insider solely by virtue of being a greater than 10% shareholder ceases to be subject to Section 16 reporting requirements once the person ceases to be a greater than 10% shareholder.

The SEC has adopted a variety of exemptions from the reporting requirements of Section 16(a) based upon the nature of the transaction. These exemptions apply to the following types of transactions:

  • Any increase or decrease in the number of equity securities held as a result of a stock split or a stock dividend applying equally to all securities of a class
  • The acquisition of rights, such as shareholder or preemptive rights, pursuant to a pro rata grant to all holders of the same class of registered equity securities
  • Transactions that effect only a change in the form of beneficial ownership without changing the person’s pecuniary interest in the subject equity securities (note, however, that this exemption does not cover the exercise and conversion of derivative securities or deposits to and withdrawals from voting trusts)
  • Certain transactions pursuant to tax-conditioned employee benefit plans
  • Acquisitions made pursuant to a dividend reinvestment plan, provided that the plan meets certain requirements specified in Rule 16a-11 under the Exchange Act
  • Acquisitions or dispositions of an equity security pursuant to a domestic relations order
  • The disposition or closing of a long derivative security position as a result of cancellation or expiration, provided that the Section 16 insider receives no value in exchange for the expiration or cancellation

In addition to the above exemptions, the SEC has adopted a number of exemptions based upon the status of the Section 16 insider. Depending on the circumstances, certain of these exemptions may be available to executors and other fiduciaries, odd-lot dealers, market makers, arbitrageurs, underwriters and other persons who participate in a distribution of the company’s equity securities.

Form 5: Annual Statement of Changes in Beneficial Ownership

A Section 16 insider must report certain transactions on a year-end report on Form 5 within 45 days after the end of the company’s fiscal year. Some transactions, most notably gifts, are not required to be reported on Form 4, but must be reported on Form 5. A Section 16 insider is required to file a year-end Form 5 to report any transaction that the person should have reported during the fiscal year on Form 3 or Form 4, but did not. Transactions reportable on Form 5 are limited to the following:

  • Certain transactions occurring during the most recent fiscal year that are exempt from short-swing profit liability under Section 16(b), such as bona fide gifts of the company’s equity securities, but excluding exempt transactions which involve the company
  • Qualifying de minimis acquisitions of the company’s equity securities
  • Transactions that the Section 16 insider should have reported on Form 3 or Form 4 during the most recent fiscal year, but did not

Disclosure of Reporting Delinquencies; Compliance Programs. Item 405 of Regulation S-K requires a company to disclose in its annual proxy statement and annual report on Form 10-K certain information regarding the failure of any Section 16 insider to timely file a Section 16 report during the previous fiscal year or prior fiscal years. For each such delinquent Section 16 insider, the company is required to set forth the number of late reports, the number of transactions that were not reported on a timely basis, and any known failure to file a required Form 3, 4 or 5. Although there is no official sanction placed upon the company as a result of the filing delinquencies of its insiders, such disclosures are potentially embarrassing.

Accordingly, every public company should develop and implement a strong compliance program to ensure that its directors and officers timely file all required reports. In addition to minimizing the potential for embarrassing disclosures of the type described above, a strong compliance program will assist the company’s directors and officers in avoiding both short-swing liability under Section 16(b) and SEC enforcement actions to enforce Section 16(a)’s reporting requirements.

Filing Procedures and Website Posting.

All Section 16(a) reports must be filed with the SEC electronically using the SEC’s EDGAR filing system, and all reports become publicly available immediately upon filing.


Satisfying Regulation Fair Disclosure (RegFD): 8-K, newswire, websites, social media

With today’s one year anniversary of the SEC’s social media guidance added to RegFD, it seems a good a time as any to refresh the details of RegFD.

Issuers have considerable flexibility in determining how to satisfy the public disclosure requirements of RegFD. The public disclosure requirement can be satisfied by filing the information in a Form 8-K or by any other non-exclusionary method of disclosure that is reasonably designed to provide broad public access to the information.

RegFD was implemented October 2000 to address perceived abuses involving the selective disclosure of material nonpublic information to analysts, institutional shareholders and others with the opportunity to profit from such information. Prior to the adoption of RegFD, a number of public companies were disclosing earnings results and other nonpublic information to analysts and institutional investors before broadly disseminating that information to the general public. The SEC believed this informational disparity undermined the investing public’s confidence in the fairness and integrity of securities markets, since those who were privy to such information had the opportunity to profit at the expense of the uninformed.



At the time RegFD was adopted, the SEC recognized the potential for using website disclosure as an acceptable means of satisfying the “public disclosure” requirement of RegFD, but stopped short of concluding that such disclosure would, by itself, suffice.

In August 2008, the SEC issued an Interpretative ReleaseCommission Guidance on the Use of Company Websites – in which it concluded that certain issuers could, subject to certain conditions, satisfy the public disclosure requirement under RegFD by posting information to their websites. To take advantage of this means of satisfying the disclosure requirement, an issuer must that its website is a recognized channel of distribution and that the disclosed information is posted and accessible on the website and has been “disseminated” for purposes of the regulation.

In this regard, the release noted that whether a company’s website is a “recognized channel of distribution” will depend on the steps the company has taken to alert the market to its website and its disclosure practices, as well as the use by investors and the market of the company’s website. Similarly, one of the factors to be considered in determining whether information on the website has been “disseminated” for purposes of RegFD is whether the company has made investors and the markets aware that it will post information on its website. While the release did not provide “bright-line” guidance as to when the public disclosure requirements of RegFD could be satisfied by an issuer’s website posting, it did provide a non-exclusive list of considerations that an issuer could use to make such a determination.

Questions regarding the legality and propriety of public disclosure through websites resurfaced when Netflix and its CEO, Reed Hastings, received Wells notices from the SEC staff communicating the staff’s intent to recommend an enforcement action against them for violation of RegFD. The staff’s action was in response to a July 2012 post on Mr. Hastings’ Facebook page, stating that in June 2012 monthly viewing of Netflix had exceeded a billion hours for the first time ever. Within two trading days of Mr. Hastings’ post, Netflix’s stock price had risen by nearly 20%, although it is not clear whether this rise was due to the Facebook post or other factors. The SEC ultimately determined not to bring an enforcement action against Netflix or Mr. Hastings. However, it released a 21A report of investigation to provide guidance to issuers regarding how RegFD and the earlier guidance in its 2008 Interpretive Release on the use of company websites apply to disclosures made through social media channels.

Click the image to request our free Corporate Governance Handbook.

Click the image to request our free Corporate Governance Handbook.

The April 3, 2013 report noted that in light of the direct and immediate communication made possible by social media channels, the SEC expected issuers to rigorously examine whether a particular channel is a “recognized channel of distribution” prior to disclosing any material information through it. To this end, the SEC emphasized that, as outlined in its 2008 Interpretive Release, the investing public should be alerted to the channels of distribution a company will use to disseminate material nonpublic information. The SEC suggested that a company could provide appropriate notice to the investing public by disclosing on its website the specific social media channels the company intends to use for the dissemination of material nonpublic information. The SEC cautioned that the disclosure of material nonpublic information on the personal social media site of an individual corporate officer – without advance notice to investors that the site could be used for such purpose – would likely be a violation of RegFD.

What is Material Information? RegFD only prohibits the selective disclosure of material information. RegFD does not define materiality, but instead relies on the definition that has developed through case law. Based on the general principles established by the courts, information would be considered material if:

  • There is a substantial likelihood that a reasonable investor would consider it important in making an investment decision
  • It would be viewed by a reasonable investor as significantly altering the total mix of information available
  • It is reasonably certain to have a substantial effect on the market price of the issuer’s securities

Given the fact-dependent nature of the analysis, there is no bright-line rule as to what should be considered material for purposes of RegFD. In the adopting release for RegFD, however, the SEC provided a non-exclusive list of the types of information and events that issuers should carefully review to assess materiality:

  • Earnings information
  • Mergers, acquisitions, tender offers, joint ventures or changes in assets
  • New products or discoveries, or developments regarding customers or suppliers (e.g., the acquisition or loss of a contract)
  • Changes in control or in management
  • Change in auditors or auditor notification that the issuer may no longer rely on an auditor’s audit report
  • Events regarding the issuer’s securities — e.g., defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights of security holders, public or private sales of additional securities
  • Bankruptcies or receiverships

The SEC has made clear that any communication between an issuer and analysts regarding earnings involves a high degree of risk under RegFD. As a result, any information that an issuer plans to disclose to an analyst should be carefully scrutinized to confirm that it is not material or has already been publicly disseminated. If those determinations cannot be made with certainty, the issuer should consider the information material and comply with the public disclosure requirements of RegFD.

What is required in an SEC 10-K file

In concert with the recent posts about printing annual reports and 10-Ks, an overall review of what is required in a 10-K seems appropriate.

All public companies other than foreign private issuers must file an Annual Report on Form 10-K following the end of each fiscal year. The Form 10-K includes four parts, the items of which are described below.


Annual report and 10-K filing need not be daunting. Click the image to learn more about how we’ll help.

Part I of Form 10-K provides a general description of the business of the company and its properties along with the risk factors that investors should consider when investing in the company.

Part I also includes:

  • a description of any material legal proceedings other than routine litigation incidental to the business to which the company or any of its subsidiaries is a party or to which any of its property is subject, and any such proceedings that were terminated in the fourth quarter of its fiscal year (along with a description of the outcome)
  • for accelerated filers and large accelerated filers, a description of any material unresolved comments from the SEC staff regarding the company’s periodic and current reports that were received 180 days or more before the end of the fiscal year and…
  • if applicable, a statement that the information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K (which are discussed in more detail in section of this handbook entitled “The Dodd-Frank Act”) is included in an exhibit to the Form 10-K

Part II of Form 10-K includes a comparative presentation of selected financial data for the last five fiscal years, management’s discussion and analysis of the company’s operating results and its liquidity and capital resources, and the audited consolidated financial statements of the company (which may also be filed in Part IV), along with certain supplementary quarterly financial data.

Part II also includes:

  • information relating to the company’s common stock, including the trading market, historical high and low sales prices, the number of registered holders, the payment of cash dividends, unregistered sales of securities, and company repurchases of its common stock during the fourth fiscal quarter
  • quantitative and qualitative disclosures relating to market sensitive instruments held by the company and other primary market risk exposures (smaller reporting companies do not need to provide the information required by this item)
  • if there has been a change in the principal accountants of the company, disclosure of:  1.) any disagreements with the accountants that the accountants would have been required to disclose; or  2.) any “reportable event” that had occurred, which was material and accounted for or disclosed in a manner different from what the former accountants would have apparently concluded was required (which disclosure is required with respect to disagreements or reportable events that occurred during the year in which the change in accountants took place or during the subsequent year)
  • the conclusion of the company’s principal executive and financial officers regarding the effectiveness of the company’s disclosure controls and procedures (which are discussed in more detail below in the “Disclosure Controls and Procedures” part of this section and in the section of this handbook entitled “The Sarbanes-Oxley Act”)
  • management’s assessment of the effectiveness of the company’s internal control over financial reporting, including disclosure of any material weakness in its internal controls
  • an attestation report of the independent auditors on the company’s control over financial reporting
  • any changes in the company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, such internal controls and…
  • any information required to be reported in a Form 8-K during the fourth quarter that was not reported

Companies need not comply with disclosure requirements relating to disclosure controls and procedures and internal control over financial reporting until after they have filed an Annual Report on Form 10-K for a prior fiscal year. In addition, as codified in Section 989G of the Dodd-Frank Act, smaller reporting companies and non-accelerated filers are exempt from the requirement to include the attestation report of the independent auditors on the company’s internal control over financial reporting.

Part III of the Form 10-K includes disclosures relating to directors, executive officers, corporate governance, executive compensation, the beneficial ownership of management and certain large shareholders, related person transactions, director independence and accountant fees and services. Part III items may only be incorporated by reference if such proxy statement is filed within 120 days of the company’s fiscal year end. If the proxy statement is not filed within such 120-day period, the company must file an amendment to its Form 10-K prior to the end of such period that includes the Part III information.

Companies should list under Part IV of the Form 10-K their financial statements and the schedules required to be filed in Part II, along with all exhibits required to be filed by Item 601 of Regulation S-K.

The exhibits to the Form 10-K will generally include:

  1. all material contracts
  2. the company’s organizational documents
  3. all instruments defining the rights of security holders
  4. a list of the company’s significant subsidiaries
  5. any applicable consents of experts and counsel (namely, the consent of the independent auditors where the financial statements are incorporated by reference in one or more registration statements)
  6. certifications under the Sarbanes-Oxley Act, which are described in more detail below and…
  7. interactive data files with the company’s financial statements in XBRL. Most exhibits can be incorporated by reference to a previously filed document. Management contracts and compensatory plans and arrangements must be specifically identified.

Summary of Selected Items

Risk Factors. Item 503(c) of Regulation S-K requires public companies to disclose under the caption “Risk Factors” a discussion of the most significant factors that make investing in the securities of the company risky or speculative. The factors should be those risks that are specific to the company and should not include risks that apply to every public company. As a general rule, any fact or circumstance that could pose a risk to the company’s financial condition, results of operations or potential growth, or which could otherwise materially affect the performance of the company’s securities, may be a risk factor. In addition to identifying the risk factors, the company must discuss how each factor could affect the company or its securities. Companies should not include mitigating language in their risk factor disclosures.

In addition, the discussion of risk factors must be written in plain English. Smaller reporting companies are not required to provide the information required under this item. Many smaller reporting companies, however, will include risk factors in their Annual Reports to take advantage of a safe harbor defense for forward-looking statements.

Section 21E of the Exchange Act provides a safe harbor defense for companies in securities litigation for forward-looking statements that are made by the company in its Exchange Act reports. This defense is similar to the defense in Section 27A of the Securities Act and the “bespeaks caution” defense developed in securities case law. Forward-looking statements, which are commonly found in a company’s MD&A (defined below), are statements not of historical fact but of the expectations of the company with respect to its future performance or other predictions or expectations regarding future events.

To qualify for the safe harbor, companies must identify the forward-looking statements in the report with sufficient particularity and accompany the statements by cautionary language that identifies the significant factors that could cause actual results to materially differ from those contained in the forward-looking statements. The risk factors identified in the Form 10-K and other filings can provide the meaningful cautionary language required by the safe harbor.


Click the image to request our free Corporate Governance Handbook.

Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations.

Item 303 of Regulation S-K requires a discussion and analysis of the company’s operating results and its liquidity and capital resources. As articulated by the SEC, the purpose of this disclosure is to present the company’s financial condition and results of operations “through the eyes of management” and to provide the context for analysis of the financial information presented in the periodic report. A critical requirement of the Management’s Discussion and Analysis of Financial Condition and Results of Operations (better known as the MD&A) is to disclose any known trends, commitments, events or uncertainties that have had or are reasonably likely to have a material effect (positive or negative) on the company’s operating results or liquidity.

The MD&A should identify and discuss the principal drivers that have impacted and will continue to impact the company’s operating results and financial condition, as well as key performance measures, including non-financial performance indicators, which are used by management and which would be material to investors, particularly where management refers to these measures in its earnings releases. In general, the MD&A should emphasize material information and de-emphasize or omit immaterial or duplicative information.

Among other material items, the MD&A should include an analysis of the following matters relating to the company:

  • changes in cash flows
  • debt instruments and certain related covenants, including covenants:  1.) the company has breached or is reasonably likely to breach; or  2.) that materially restrict the company’s ability to incur additional debt or to undertake an equity financing
  • critical accounting policies and estimates that require subjective judgments to account for uncertain matters or matters subject to change
  • any material tax contingencies or trends or uncertainties that could affect the company’s tax obligations or effective tax rate
  • commitments for capital expenditures
  • material contingencies arising from pending litigation and regulatory matters
  • commitments for environmental expenditures and…
  • any off-balance sheet arrangements

The MD&A should include a liquidity and capital resources section that provides a clear picture of the company’s ability to generate cash and to meet existing and known or likely future cash requirements. The discussion should focus on material changes and trends in operating, investing and financing cash flows and the reasons underlying those changes. The MD&A also must include quantitative tabular disclosure regarding the company’s contractual obligations.

Sarbanes-Oxley Certifications

The Sarbanes-Oxley Act created two certification requirements for the principal executive and principal financial officers of public companies. Section 302 of the Sarbanes-Oxley Act requires a certification that is filed with each quarterly and annual report and which states that the reports are accurate and complete and that the company has in place adequate disclosure controls and procedures and internal control over financial reporting. Section 906 of the Sarbanes-Oxley Act requires a certification that is furnished with any report containing financial statements and which states that the report fully complies with Section 13(a) or 15(d) of the Exchange Act and fairly presents, in all material respects, the financial condition and results of operations of the company. Although paragraph 3 of the Section 302 certification may be omitted in certain circumstances, and plural references to “certifying officers” in paragraphs 4 and 5 can be made singular, the certifications must otherwise strictly follow the language provided in SEC rules.The SEC has said that it will not accept an altered certification even if the alteration would appear to be inconsequential. If a filed certification is not correct and complete, the accompanying report may be considered by the SEC to be materially incomplete and deemed not filed (thus potentially affecting Form S-3 eligibility, among other things).


The Form 10-K must be signed on behalf of the company by a duly authorized officer as well as by its principal executive officer(s), its principal financial officer(s), its controller or principal accounting officer, and by at least a majority of the members of the board of directors. When the form is filed by a limited partnership, it must be signed by at least a majority of the members of the board of directors of any corporate general partner that signs the report.