Covid-19 Disclosures – Not Just Speculation Anymore
Now that the market can review and dissect two quarters of Covid-related disclosures and reporting companies are gearing up for third-quarter reporting, Covid disclosures are no longer pure speculation. Following the two official guidelines released by the SEC (Disclosure Guidance Topic No. 9A which supplemented the previously issued Topic No. 9), a new CD&I issued on Covid-19 executive employment benefits, and numerous unofficial statements and speeches on the topic, the investment community and reporting companies are navigating the areas that require the most attention and thoughtful disclosure. Not surprisingly, the areas requiring the greatest consideration are management, discussion and analysis (including human capital disclosures and forecasting), risk factors, and internal controls over financial reporting.
Covid-19 “Benefits” – SEC Issues New C&DI
On September 21, 2020, the SEC issued a new compliance and disclosure interpretation (C&DI) related to the reporting of compensation perks or benefits. In particular, the SEC stated that:
In reporting compensation for periods affected by Covid-19, questions may arise as to whether benefits provided to executive officers because of the Covid-19 pandemic constitute perquisites or personal benefits for purposes of the disclosure required by Item 402(c)(2)(ix)(A) and determining which executive officers are “named executive officers” under Item 402(a)(3)(iii) and (iv). The two-step analysis articulated by the Commission in Release 33-8732A continues to apply when determining whether an item provided because of the Covid-19 pandemic constitutes a perquisite or personal benefit.
- An item is not a perquisite or personal benefit if it is integrally and directly related to the performance of the executive’s duties.
- Otherwise, an item that confers a direct or indirect benefit and that has a personal aspect, without regard to whether it may be provided for some business reason or for the convenience of the company, is a perquisite or personal benefit unless it is generally available on a non-discriminatory basis to all employees.
Whether an item is “integrally and directly related to the performance of the executive’s duties” depends on the particular facts. In some cases, an item considered a perquisite or personal benefit when provided in the past may not be considered as such when provided as a result of Covid-19. For example, enhanced technology needed to make the CEO’s home his or her primary workplace upon imposition of local stay-at-home orders would generally not be a perquisite or personal benefit because of the integral and direct relationship to the performance of the executive’s duties. On the other hand, items such as new health-related or personal transportation benefits provided to address new risks arising because of Covid-19, if they are not integrally and directly related to the performance of the executive’s duties, may be perquisites or personal benefits even if the company would not have provided the benefit but for the Covid-19 pandemic, unless they are generally available to all employees.
Although not tied into Covid, a week after issuing the new C&DI, the SEC filed settled enforcement charges against Hilton Worldwide Holdings for failing to fully disclose perquisites and personal benefits provided to executive officers. This is clearly a topic the SEC is paying attention to.
Management’s Discussion and Analysis of Financial Condition and Results of Operation (MD&A)
Item 303 of Regulation S-K (MD&A) requires discussions on liquidity, capital resources, results of operations, off-balance-sheet arrangements, and contractual obligations including any material changes. For example, Item 303 requires disclosure of “known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the registrant’s liquidity increasing or decreasing in any material way.” It also requires disclosure of unusual or infrequent events or transactions or any significant economic changes that materially affected the amount of reported income from continuing operations as well as known trends or uncertainties that have had or that the the company reasonably expects will have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.
In January 2020, the SEC issued interpretative guidance on MD&A (see Here) reminding companies to include information not specifically referenced in the item that the company believes is necessary to an understanding of its financial condition, changes in financial condition and results of operations. Covid-19 has made MD&A a source of heartburn for most companies.
A part of MD&A necessarily involves a level of forecasting, especially related to liquidity and cash flows and uses (in addition to the obvious forecasting included in earnings releases and published guidance – see Here). The Covid pandemic has affected different companies and sectors of the economy dramatically differently, with some struggling to get back to pre-outbreak operations (airlines) and others benefiting (Amazon). Either way, management has to use all of its available resources to provide meaningful MD&A disclosure on the results of operations for current periods and potential future impacts and changes. Moreover, it is likely that the world will not simply return to pre-Covid growth and operations, but rather, there could be a permanent shift in business models as a result of the pandemic.
Some steps management can take to assist in forecasting include (i) focusing on factors that the management can control and that are known; (ii) automating operational data to the greatest extent possible to maintain real-time updated information; and (iii) modeling different scenarios and weighing which ones seem most likely in light of current information.
In addition to operational changes, whether positive or negative, management has been carefully considering and disclosing the impact Covid has had on various expenses such as work-from-home changes or the restructuring of severance, impairments or stock incentive plans. Some expenses and write-downs have evolved into ordinary as opposed to unusual or non-recurring. On the flip side, a company must disclose the receipt of government assistance and the impact that is having on liquidity and the likely impact when such assistance is used up and no longer available.
Although there is an outstanding proposed rule amendment which would alter this structure, the substantive information that must be disclosed by management, including related to Covid-19 and its impact on a business, would remain unchanged.
Risk Factors
Covid-19 risk factors are now included in close to 100% of periodic reports that require risk factor disclosures and likewise in close to 100% of Securities Act and Exchange Act registration statements. As a reminder, smaller reporting companies are not required to include risk factors in their Exchange Act reports though they are required in all registration statements and Regulation A offering circulars.
Almost all companies, whether truly directly impacted or not, now include general risk factors related to uncertainty regarding the duration of the Covid-19 pandemic, the impact of the economic downturn, and changes in consumer behaviors both during and after the pandemic. In addition, almost all companies in which such disclosures could be applicable, include general risk factors regarding travel and energy, work-from-home practices and governmental stay-at-home orders.
Internal Controls over Financial Reporting (ICFR)
One of the most difficult aspects of managing the Covid-19 crisis has been the impact on internal controls over financial reporting (ICFR). In particular, managing remote workforces, the sometimes drastic impacts on income and expenses, government-mandated shutdowns, cluster breakouts in some businesses, and controlling the expenditures of government PPP loans have all had a direct impact on ICFR.
In addition to the high level necessity of ensuring that ICFR procedures make certain that transactions are executed in accordance with management’s general or specific authorization and recorded as necessary to permit preparation of financial statements in conformity with US GAAP or International Financial Reporting Standards (IFRS), ICFR procedures include ensuring that access to assets, including cash and inventory, is only had in accordance with management’s instructions or authorization. Recorded accountability for assets must be compared with the existing assets at reasonable intervals and appropriate action be taken with respect to any differences. Covid-19 necessarily has an impact on these responsibilities.
It is vitally important that a company carefully review its ICFR, including with the advice of professionals, and make adjustments to be sure that proper controls are and remain in place. Potential and actual disruptions to a company’s supply chain, customer base, operations, processes and workforce should be weighed when evaluating the operating effectiveness of legacy controls. In situations in which the responsibilities for controls have been reassigned because of changes in personnel, companies should specifically evaluate whether appropriate segregation of duties continues to exist. Technology and cyber-security must also be reviewed to be sure that remote workers can continue to perform effectively.
Some companies are adapting quickly implementing video technology for inventory and asset review and improved technology, including blockchain, for real-time assessments.
It is also important that management’s assessment over internal controls in the body of Forms 10-Q and 10-K be carefully reviewed to ensure that any deficiencies created by Covid-19 are disclosed together with remedial measures.
Non-GAAP – EBITDAC Reporting
Since Covid began, some companies have created a new metric of for reporting financial results – earnings before interest, taxes, depreciation, amortization, and Covid – or EBITDAC. The form of EBITDAC varies with some companies adjusting EBITDA for Covid-19-related expenses or presenting gross margin without Covid-19 impacts.
Despite the natural inclination to want to disclose to the marketplace that, but for Covid, results of operations would be better than they actually are, the SEC is scrutinizing any such creative financial metric. Also, Topic 9 specified that the SEC does not think it is appropriate to present non-GAAP financial measures or metrics for the sole purpose of presenting a more favorable view of the company. Any metric must include an explanation as to why management finds the measure useful and how it helps investors assess the impact of Covid on the company’s financial position and results of operations.
Also, it is important that companies remember that whenever presenting a figure or metric that is non-GAAP, it must comply with Regulation G or Item 10 of Regulation S-K, including providing a reconciliation to GAAP numbers, the reasons for presenting the non-GAAP numbers and particulars on the presentation and formatting of the information – see Here.
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A COVID IPO
On June 25, 2020, SEC Chair Jay Clayton gave testimony before the Investor Protection, Entrepreneurship and Capital Markets Subcommittee of the U.S. House Committee on Financial Services on the topic of capital markets and emergency lending in the Covid-19 era. The next day, on June 26, Chair Clayton, William Hinman, Director of the Division of Corporation Finance, Dalia Blass, Director of the Division of Investment Management and Brett Redfearn, Director of the Division of Trading and Markets issued a public statement on the same topic but expanded to include efforts to ensure the orderly function of U.S. capital markets.
Chair Clayton Testimony
Chair Clayton breaks down his testimony over five topics including: (i) market monitoring and regulatory coordination; (ii) guidance and targeted assistance and relief; (iii) investor protection, education and outreach efforts; (iv) ongoing mission-oriented work; and (v) the SEC’s fiscal-year 2021 budget request.
Market Monitoring and Regulatory Coordination
Despite the extraordinary volumes and volatility we have seen in the securities markets over the few months, at a high level, the “pipes and plumbing” of the securities markets have functioned largely as designed and as market participants would expect. The SEC has observed no systemically adverse operational issues with respect to key market infrastructure.
The SEC has also stepped up its market monitoring efforts establishing a cross-divisional Covid-19 Market Monitoring Group to manage and coordinate efforts to monitor markets and respond to issues. The Group has been continuously monitoring the market with respect to prices and price movements, capital flows and credit availability. The Group has also initiated work to: (i) identify, analyze and clarify interconnections across key segments of financial markets with increased specificity; and (ii) analyze the risks and potential pro-cyclical effects of investment strategies and mandates that include or are subject to mechanistic rules, guidelines or restrictions on holdings of assets—for instance, by reference to ratings and downgrades.
The SEC has also been in close contact with other domestic and international financial regulators regarding risks and impacts resulting from Covid-19 on investors, companies, state and local governments, issues and the financial system as a whole. Cybersecurity risks remain a top concern and priority. On the international level, attention is being paid to market impacts and increased risks with a focus on preserving orderly market functions.
Covid-19 Related Guidance and Targeted Regulatory Assistance and Relief
Chair Clayton highlights the various regulatory relief efforts of the SEC in response to Covid, for example temporary relief from filing deadlines, allowing virtual shareholder meetings, transfer agent relief (see HERE), and temporary expedited crowdfunding rules (see HERE). Chair Clayton testified about the SEC’s guidance on disclosures by public companies related to the impact of Covid on their businesses (see HERE) and the importance of those disclosures to the markets.
The SEC has also pursued many actions focused on operational issues, including facilitating the shift to business continuity plans that are consistent with health and safety directives and guidance and implementing a work-from-home system.
Investor Protection, Education and Outreach
Chair Clayton confirms that investor protection is as important as ever and that the SEC’s Office of Compliance Inspections and Examinations (OCIE) and Division of Enforcement remain fully operational and continue their robust efforts to protect investors. As all practitioners have noticed, Enforcement has been actively monitoring the markets for frauds, illicit schemes and other misconduct affecting U.S. investors relating to Covid and has dedicated significant resources to responding quickly to Covid-related misconduct. The SEC has issued over 30 trading suspensions on companies that have made claims related to access to testing materials, development of treatments or vaccines or access to personal protective equipment, and many of these have followed with enforcement actions.
The Office of Investor Education and Advocacy, along with Enforcement’s Retail Strategy Task Force, has issued investor alerts to inform and educate investors about concerns related to recent market volatility and Covid-related schemes. A separate alert warned investors of bad actors using CARES Act benefits to promote high-risk, high-fee investments and other inappropriate products and strategies.
Furthermore, Regulation Best Interest, establishing a new standard of conduct for broker-dealers when making a recommendation of any securities transaction or investment strategy to a retail customer, became effective on June 30, 2020. The SEC set up an investor-facing website explaining Regulation Best Interest and the Form CRS that broker-dealers are required to file.
Ongoing Mission-oriented Work
Despite the work-from-home status of the SEC, planned rulemaking and scheduling has continued unabated. Other initiatives, such as concerns with the risks associated with companies operating in emerging markets, have likewise continued. For more on that topic, see HERE.
Keeping with the national topic of the moment, Chair Clayton testified that the SEC is committed to diversity and inclusion. Over the last weeks, the topic has been brought to the forefront and the SEC recognizes it needs to make improvements and is working diligently with its Office of Minority and Women Inclusion on further initiatives. Chair Clayton also pointed out that in March 2020, the SEC released its first Diversity and Inclusion Strategic Plan to promote diversity and inclusion within the SEC and the entities the SEC regulates, the Office of the Advocate for Small Business Capital Formation recently held its Government-Business Forum on Small Business Capital Formation including a panel on minority- and woman-owned businesses, and the Asset Management Advisory Committee held a public meeting on diversity and inclusion in the asset management industry.
FY 2021 Budget Request
The SEC FY 2021 budget request of $1.895 billion, an increase of 4.4% over FY 2020, is hoped to provide the agency with resources to better execute its responsibilities. Key priorities include: (i) facilitating main street investor access to long-term, cost-effective investment opportunities and expanding outreach to small businesses; (ii) responding to continued evolution and innovation in the securities markets and meeting long-standing and emerging investor protection and oversight needs; and (iii) assessing and securing our data footprint with a focus on cybersecurity.
Public Statement on SEC’s Targeted Regulatory Relief Related to Covid-19
On June 26, Chair Clayton, William Hinman, Director of the Division of Corporation Finance, Dalia Blass, Director of the Division of Investment Management and Brett Redfearn, Director of the Division of Trading and Markets, issued a public statement on targeted regulatory relief and orderly markets amid the Covid-19 crisis. The statement reiterated much of Chair Jay Clayton’s testimony the day prior as summarized above. However, it also expanded to discuss continued changes and expansion to the relief as the virus crisis continues and is expected to continue to impact businesses and the public markets.
The SEC has reiterated many times that they are taking a health-first approach, prioritizing the health and safety of not only its employees and staff, but also making concessions for businesses to do so as well. All SEC staff is and will continue to work remotely and the SEC intends to extend relief it has provided to market participants to support a remote-work environment, such as virtual annual meetings. The SEC will also continue to provide relief related to the delivery of proxy materials in areas where mail cannot be delivered. Furthermore, the SEC will continue to allow the electronic submission of Form 144s and other documents that are still required to be delivered in paper form.
On the other hand, the SEC has no intention of offering further relief from filing deadlines for periodic reports such as 10-Qs and 10-Ks.
In May 2020 the SEC adopted temporary, conditional expedited crowdfunding access to small businesses using Regulation Crowdfunding (see HERE). The temporary rules provide eligible companies with relief from certain rules with respect to the timing of a company’s offering and the financial statements required. To take advantage of the temporary rules, a company must meet enhanced eligibility requirements and provide clear, prominent disclosure to investors about its reliance on the relief. The relief is scheduled to end on August 31, 2020. The SEC has not yet decided if it will extend this temporary rule.
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Disclosures Related To Covid-19 – What Investors Want To Know
I’ve written several times about the need for Covid-19 disclosures including public statements by Chair Clayton and William Hinman, the Director of the Division of Corporation Finance and the SEC Division of Corporation Finance Disclosure Guidance Topic No. 9 regarding the SEC’s current views on disclosures that companies should consider with respect to COVID-19. For my summary blog on the topic, see HERE.
As I’ve previously mentioned, my personal thought is that although there are many reasons why disclosure is important, it is especially important now to support investor confidence, activity in our markets and capital raising efforts. If investors are kept informed of the impact of COVID-19 on companies, see that these companies are continuing on and meeting their requirements and that the markets haven’t just fallen into Neverland, they will continue to invest through the trading of securities, and direct investments through PIPE transactions. Further on the broader economic level, transparency and information will bolster confidence on a B2B level such as between suppliers, manufacturers and retailers, allow for the extension of credit and support the general continued flow of business operations.
Not surprisingly, the topic of Covid-19 disclosure was front and center at the SEC’s Investor Advisory Committee (“IAC”) meeting on May 4, 2020 (held virtually, of course) with investors providing positive feedback on the SEC’s guidance to date, but also suggesting additional information that they would like to be informed about by public companies.
IAC meeting participants indicated that the SEC’s prior recommendations related to disclosures on business continuity, the receipt of federal aid and general financial impacts as laid out in Topic No. 9 have been very useful. A refresher on Topic No. 9 is included at the end of this blog.
Human Capital
Several participants at the IAC meeting encouraged the SEC to require more disclosure related to human capital and in particular, how human capital impacts a company’s ability to resume safe and sustainable operations. Human capital is typically considered an environmental, social and governance (ESG) related disclosure. The IAC has been a strong proponent of ESG disclosures, including related to human capital, so this is not surprising. See, for example, HERE.. Also, On May 14, 2020 the IAC published a recommendation to the SEC to require ESG disclosures.
Although the SEC has to date declined to require ESG related disclosures, its most recent published proposed amendments to the business description disclosure required by Regulation S-K includes suggested disclosure on human capital. The proposed amendments would include any human capital measures or objectives that management focuses on in managing the business, and the attraction, development and retention of personnel (such as in a gig economy). See HERE . For more on ESG in general, see HERE and for a summary of SEC Chair Jay Clayton’s views on ESG related disclosure, see HERE.
Getting back to human capital disclosures, as mentioned the IAC’s emphasis was on safe and sustainable workplaces. Drilling down to particular disclosures, investors are interested in: (i) workplace safety hazards and related risks; (ii) systems and controls to reduce hazards including air quality, employee barriers, cleaning supplies and training; (iii) the capacity for testing, contract tracing, and isolation of potentially infected employees including those that are asymptomatic but may have come into contact with an infected person; (iv) controls and accommodations to promote a safe work environment including cleaning supplies and hand washing stations; (v) human resource policies including paid sick leave and adjusted work schedules; (vi) the availability of personal protective equipment; (vii) workforce stability and turnover; and (viii) employee relations including supporting an environment where workers feel safe and plans for dealing with unrest.
Drill Down On Financial Impact
Although the SEC made several recommendations to management to consider in fashioning Covid-19 related disclosures, the IAC meeting participants think companies should really drill down further. For example, how will the impact of Covid-19, financial and otherwise, impact a company’s position vis-a-vis its competition, both domestically and internationally. The changing international hot zones and opening and closing of different countries at different times all impact a company’s operations. Investors would like to see disclosures related to revenues, as well as supply chains, including manufacturing and logistical issues.
Investors would like to see more current real-time disclosure. The SEC has indicated that it will not second-guess best-effort forward-looking statements during these difficult times. However, IAC members would like to see more real-time data, especially since expectations are so difficult to determine in a global crisis. Personally, I think too much real-time data would be confusing and cause unnecessary volatility for the markets. Of course if there is a material real-time negative impact on liquidity, operations, management or earnings (defaults on material obligations; the closing of a manufacturing facility; the shutdown of an export or import border; the infection of a senior executive) or a positive impact (the re-opening of a manufacturing facility; extensions or work-outs with creditors; recovery of sick executive; new funding sources, etc.) these should be reported whether specifically required by Form 8-K or not. For a review of Form 8-K requirements, see HERE.
Investors also want to be sure they are given a heads-up about actual or potential bankruptcy and the real impact of going concern statements. Participants of the meeting noted that during the 2008 recession, some companies filed bankruptcy without any forewarning or even auditor going concern opinions. Although not discussed at the IAC meeting, the fact is, the world has already seen several large bankruptcies as a result of Covid-19. It begs the question that if a company’s financial foundation is fragile enough to be knocked over in 3 months (or less), investors should know. Hertz filed for bankruptcy May 22, directly citing the coronavirus as a cause. Even as the company was beginning layoffs, it paid out a reported $16.2 million in executive bonuses. Certainly management and auditors had to know that the company’s financial position was precipitous, but the marketplace did not.
Internal Controls
Participants at the IAC meeting indicated they will want to know how a company’s internal controls over financial reporting held up during the Covid-19 crisis and if deficiencies were discovered, how they are being rectified. In addition, in-person auditor meetings and site reviews have been replaced with Zoom and other electronic communications. IAC members wonder what impact that has over internal controls and even noted that they have not seen an increase in any disclosure related to this dramatic system change.
Refresher On – Topic No. 9
The SEC Division of Corporation Finance has issued Disclosure Guidance Topic No. 9 regarding the SEC’s current views on disclosures and the obligations that companies should consider with respect to COVID-19. The overarching messaging is that a company must consider its COVID-19 impact in its disclosure documents and make necessary material disclosures using a principles-based strategy.
Certainly the actual impact and risks are difficult to ascertain and may be unknown or dependent on third parties, but the SEC encourages material disclosure on what management expects the virus’ future impact will be, how management is responding to evolving events, and how it is planning for COVID-19-related uncertainties. Examples of areas of reports that may be impacted and thus require disclosure include management’s discussion and analysis, the business section, risk factors, legal proceedings, disclosure controls and procedures, internal control over financial reporting, and the financial statements.
Topic No. 9 suggests that management consider the following non-exclusive list in considering COVID-19 related disclosures:
- How has COVID-19 impacted the financial condition and results of operations? How do you expect COVID-19 to impact your future operating results and near-and-long-term financial condition? Do you expect that COVID-19 will impact future operations differently than how it affected the current period?
- How has COVID-19 impacted your capital and financial resources, including your overall liquidity position and outlook? Consider if the cost of or access to capital and funding sources has changed and whether it is likely to change or continue to change. Have sources and uses of cash been materially impacted? Has the ability to continue to meet ongoing credit agreements changed, or is it materially likely it will change? Disclosure should also be made as to the course of action a company has taken or proposes to take in light of the material impact on its financial resources.
- How do you expect COVID-19 to affect assets on your balance sheet and your ability to timely account for those assets? For example, will there be significant changes in judgments in determining the fair value of assets measured in accordance with U.S GAAP or IFRS?
- Do you anticipate any material impairments (e.g., with respect to goodwill, intangible assets, long-lived assets, right of use assets, investment securities), increases in allowances for credit losses, restructuring charges, other expenses, or changes in accounting judgments that have had or are reasonably likely to have a material impact on your financial statements?
- Have COVID-19-related circumstances such as remote work arrangements adversely affected your ability to maintain operations, including financial reporting systems, internal control over financial reporting and disclosure controls and procedures? If so, what changes in your controls have occurred during the current period that materially affect or are reasonably likely to materially affect your internal control over financial reporting? What challenges do you anticipate in your ability to maintain these systems and controls?
- Have you experienced challenges in implementing your business continuity plans or do you foresee requiring material expenditures to do so?
- Do you expect COVID-19 to materially affect the demand for your products or services?
- Do you anticipate a material adverse impact of COVID-19 on your supply chain or the methods used to distribute your products or services?
- Will your operations be materially impacted by any constraints or other impacts on your human capital resources and productivity?
- Are travel restrictions and border closures expected to have a material impact on your ability to operate and achieve your business goals?
The SEC notes that historical information is relatively less significant at this time, making forward-looking information all the more important. Investors and analysts are extremely interested to know where companies stand today and, importantly, how they have adjusted, and expect to adjust in the future, their operational and financial affairs to most effectively work through the COVID-19 health crisis. Detailed discussions of current liquidity positions and expected financial resource needs is particularly helpful to investors and markets. Where material, a company should disclose any CARES Act or similar federal or state assistance that has been applied for and/or received, including the nature, amount and effects of such assistance.
Forward-looking information will be protected under either Sections 27A and 21E of the Private Securities Litigation Reform Act of 1995 (PSLRA) or the common law bespeaks caution doctrine as long as proper disclaimers are included (for more information, see HERE.
In addition to other considerations, the SEC reminds companies of their obligations under Item 10 of Regulation S-K and Regulation G related to the presentation of non-GAAP financial measures. The SEC permits companies to present non-GAAP financial measures in their public disclosures subject to compliance with Regulation G and Item 10(e) of Regulation S-K. Regulation G and Item 10(e) require reconciliation to comparable GAAP numbers, and the reasons for presenting the non-GAAP numbers, and govern the presentation format itself including requiring equal or greater prominence to the GAAP financial information. For more on Item 10 and Regulation G, see HERE.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony L.G., PLLC
A Corporate Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, OTC and exchange traded public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony L.G., PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALG legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
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