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As we gather and post law firm resources with practical tips and reminders for annual reporting and proxy season — which you can find in our “Form 10-K” and “Proxy Season” Practice Areas — we’re also combing through them for items we should highlight in our blogs. While we’ve addressed a lot of the new requirements and considerations for macroeconomic and other developments for this year in various blogs, some compliance reminders in this Sheppard Mullin resource stood out to me since I could see some of these easily slipping through the cracks if they don’t make their way onto someone on your team’s “to do” list — especially with folks focused on this year’s new compliance requirements. Here are a few:

Description of Securities – Exhibit 4 to 10-K. Although not new for the upcoming 10-K, companies should revisit the exhibit filed with their 10-K that provides the information required by Reg. S-K Item 202(a) through (d) and (f) for each registered class of securities to confirm it is accurate. A company may have amended its charter or bylaws in a way that requires the disclosure in this exhibit to be updated.

Expiring Confidential Treatment Orders. Companies should review their exhibits to determine if any previously granted confidential treatment will expire in 2025, and if so, take steps to maintain the confidential treatment if necessary. There are two options, depending on when the confidential treatment was initially granted: request an extension or transition to the streamlined process created in 2019. The SEC provided updated guidance in January 2024.

Broken Links. In June 2024, the SEC reminded companies to confirm that the links (including links in exhibits) in their EDGAR filings are working properly before submitting their filings on EDGAR.

Powers of Attorney for Section 16 Reports. Companies should review the most recent powers of attorney filed with the Section 16 reports of their insiders to confirm that the individuals identified as an attorney-in-fact for the insider continues to be appropriate. One or more of the individuals identified as an attorney-in-fact may no longer be with the company, and a new power of attorney or a substitute power of attorney may be useful. It may be helpful to obtain signatures on such documents in connection with the D&O questionnaire process. NOTE: See the memo’s suggestions on action items relating to the transition to EDGARNext as well, although it acknowledges that calendar year-end companies may want to enroll after year-end reporting. 

The memo also reminds us that “in comment letters issued in connection with 10-K reviews in 2024, the SEC staff asked about why a particular statement a company made on an earnings call was not also disclosed in MD&A (e.g., why a strategy mentioned on an earnings call was not discussed in MD&A, and whether metrics mentioned on an earnings call should be disclosed in MD&A),” emphasizing the importance of consistency with 10-K (MD&A, in particular) disclosures. I think public companies have heard that message loud and clear, but I also recognize that timing continues to make this challenging — with the earnings call script often being edited down to the wire. A “consistency check” may need to be done twice each quarter to make sure one is done on a nearly final version, with the “final check” being listening to the earnings call itself and potentially tweaking the 10-Q or 10-K accordingly.

– Meredith Ervine