Securities Regulation and Corporate Governance

​On March 25, 2020, the Securities an​d Exchange Commission (the “Commission") announced (available here) that it is providing a 45-day extension for companies to file certain disclosure reports that would otherwise have been due on or before July 1, 2020 (Order available here).  This is an extension of the conditional reporting relief covered by the Commission's relief (Original Order available here) for certain public company filing obligations under the federal securities laws, issued on March 4, 2020 (as previously discussed in our post here, and updated here), to companies impacted by the novel coronavirus disease 2019 (“COVID-19"). In addition, the Commission's Division of Corporation Finance (the “Division") issued on March 25, 2020 its current views regarding disclosure considerations and other securities law matters related to COVID-19 (available here).

Relief from Filing Requirements

The Commission provided conditional relief in the form of an exemption from any requirement to file or furnish certain materials with the Commission.  Specifically, the exemption covers filings made under the following provisions of Securities Exchange Act of 1934, as amended (the “Exchange Act"): Sections 13(a), 13(f), 13(g), 14(a), 14(c), 14(f), 15(d), Regulations 13A, 13D-G (except for those provisions mandating the filing of Schedule 13D or amendments to Schedule 13D), 14A, 14C and 15D, and Rules 13-f-1, and 14f-1.  This includes Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, among others. This also includes proxy statements that are required to be filed within 120 days after fiscal year-end by companies relying on General Instruction G(3) of Form 10-K to incorporate Part III information by reference to the proxy statement.  This does not include Section 16 filings (such as Forms 3, 4 and 5), Form SD (conflict minerals reports) or Schedule 13D or its amendments.

The exemption is subject to the satisfaction of the following conditions:

• for purposes of eligibility to use Form S-3 or Form F-3 (and for well-known seasoned issuer status, which is based in part on Form S-3 or Form F-3 eligibility), a company relying on the exemptive order will be considered current and timely in its Exchange Act filing requirements if it was current and timely as of the first day of the relief period (i.e., March 1, 2020) and it files any report due during the relief period within 45 days of the filing deadline for the report;
• for purposes of the Form S-8 eligibility requirements and the current public information eligibility requirements of Rule 144(c), a company relying on the exemptive order will be considered current in its Exchange Act filing requirements if it was current as of the first day of the relief period (i.e., March 1, 2020) and it files any report due during the relief period within 45 days of the filing deadline for the report; and
• companies that receive an extension on filing Exchange Act annual reports or quarterly reports pursuant to the order will be considered to have a due date 45 days after the filing deadline for the report.  As such, those companies will be permitted to rely on Rule 12b-25 if they are unable to file the required reports on or before the extended due date.

• the company's security holder has a mailing address located in an area where, as a result of COVID-19, the common carrier has suspended delivery service of the type or class customarily used by the company or other person making the solicitation; and
• the company, or other person making a solicitation, has made a good faith effort to furnish the Soliciting Materials to the security holder, as required by the rules applicable to the particular method of delivering Soliciting Materials to the security holder, or, in the case of Information Materials, the company has made a good faith effort to furnish the Information Materials to the security holder in accordance with the rules applicable to Information Materials.

• How has COVID-19 impacted the company's financial condition and results of operations?
• How has COVID-19 impacted the company's capital and financial resources, including its overall liquidity position and outlook?
• How the company expects COVID-19 to affect its balance sheet assets and its ability to timely account for those assets?
• Whether the company anticipates any material impairments (e.g., with respect to goodwill, intangible assets, long-lived assets, right of use assets and 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 the company's financial statements?
• Whether COVID-19-related circumstances such as remote work arrangements adversely affected the company's ability to maintain operations, including financial reporting systems, internal control over financial reporting and disclosure controls and procedures?
• Whether the company has experienced challenges in implementing its business continuity plans or whether it foresees requiring material expenditures or material resource constraints to do so?
• Whether COVID-19 is expected to materially affect demand for the company's products and services?
• Whether COVID-19 is anticipated to have a material adverse impact on the company's supply chain or the methods used to distribute its products or services?
• Whether the company's operations will be materially impacted by any constraints or other impacts on the company's human capital resources and productivity?
• Whether travel restrictions and border closures are expected to have a material impact on the company's ability to operate and achieve its business goals?