The SEC’s Small Business Capital Formation Advisory Committee is meeting virtually today at 10:00 am ET (they were going to meet at SEC headquarters but got snowed out). Here are the agenda highlights:
– 10:20 am – Deep Dive on “Finders” (continuing a July 2025 discussion)
– 1:00 pm – Update from the SEC’s Office of the Advocate for Small Business Capital Formation – reviewing the FY25 Staff Report
– 1:15 pm – Shedding Light on the Private Secondary Market
You can watch the webcast by going to the agenda page.
In this 31-minute episode of the Women Governance Trailblazers podcast, Courtney Kamlet and I spoke with Jen Sisson, who serves as CEO of the International Corporate Governance Network. We discussed:
– ICGN’s mission, members, and current activities.
– Jen’s thoughts on balancing global corporate governance standards with local and business-specific nuances.
– Finding common ground in conversations about governance standards and regulatory changes.
– Different approaches to the shareholder proposal process across the world.
– Perspectives from long-term institutional investors financial activism.
– Things that excite Jen about corporate governance right now.
– Jen’s advice for the next generation of women governance trailblazers.
To listen to any of our prior episodes of Women Governance Trailblazers, visit the podcast page on TheCorporateCounsel.net or use your favorite podcast app. If there are governance trailblazers whose career paths and perspectives you’d like to hear more about, Courtney and I always appreciate recommendations! Drop me an email at liz@thecorporatecounsel.net.
Like a bad on-again, off-again relationship, tariffs were “off” early Friday when SCOTUS issued its opinion in Learning Resources v. Trump – ruling 6-3 that the International Emergency Economic Powers Act doesn’t give the president the authority to unilaterally impose a tax. Before the day was out, the White House issued a proclamation imposing a (mostly) across-the-board 10% import – beginning tomorrow, February 24th, lasting for a limited time period of 150 days, and subject to a list of product exceptions. Here’s the fact sheet.
Of course, in today’s world, you can’t just rely on an official fact sheet. The president said in a Truth Social post on Saturday that he planned to raise the Section 122 tariff to the statutory cap of 15% – and also indicated that the administration would continue to work to issue new tariffs. See this Politico article for more about that, this summary from GHY International (a customs brokerage) for key points on how the Section 122 tariff is expected to apply, this Global Trade Alert explainer for a comparison of the Section 122 tariffs to the IEEPA tariffs that were struck down, and this NYT article for other potential tariff avenues.
Similar to last year, this tariff drama is playing out at a time when many companies are finalizing their Form 10-K. For better or worse, companies have become somewhat accustomed to flip-flopping and uncertainty on this topic, so that may already be built into many tariff-related disclosures. We’ve also blogged about tariffs in one way or another over 3 dozen times since February of last year (compared to 4 mentions in the entire history of the blog before that) – and we continue to post resources in our “Trump Administration Tariffs” Practice Area for members – so these issues are relatively fresh in disclosure lawyers’ minds.
Nevertheless, the disclosure issues still require a fresh think each time around because the facts and circumstances are always evolving. And although it would be great if you could simply unwind your tariff disclosure to pretend like this all never happened, the reality is that things are still very uncertain and it’s unlikely we’ll return to the old status quo. So, I’ll recap a few key points:
– Risk factors should discuss material company-specific impacts (and ongoing uncertainties). This AP article gives an example of how tariffs (and their recission) affect companies in different ways. Keep in mind that even if a company is sourcing domestically, the global trade war may affect local supply and pricing. We’ve blogged many times about different types of risks that could arise – a few examples relate to prices, costs of goods, inflationary impact, supply chain disruptions, trade deal uncertainty, and adaptation decisions.
– Non-GAAP issues could come into play if the company has been adjusting for tariff impacts.
– As Meredith shared last fall, companies have been discussing tariffs in the MD&A (consider similar material issues as noted above for risk factors), Quantitative & Qualitative Disclosures About Market Risks, and even in the financial statements in some instances. Affected companies will need to consider whether to add, remove, or modify any of these disclosures.
– Reuters reported that thousands of companies have sued the administration over tariffs and are seeking refunds. Whether and when refunds will be distributed is very much up in the air. Especially for large companies, it may be a stretch to say that this type of thing is a material legal proceeding not incidental to the business, but securities lawyers should think through Item 103 of Regulation S-K to make sure. It doesn’t seem like this type of proceeding would generally involve a loss contingency either – but I’m not an accountant (or a litigator)! Companies should make sure to evaluate their particular circumstances.
John blogged last week that debt offerings are having a moment – in large part to fund AI-related capex – and “hyperscalers” are negotiating atypical terms. The AI boom is also one factor that’s driving a surge in convertible notes issuances, according to this Cleary memo.
In the converts space, PIPEs and pre-IPO issuances are becoming more common – and the notes often look different than their traditional counterparts. The memo says that PIPE convertible notes are including bespoke features such as:
– Governance rights, such as board or observer seats, and the right to vote the underlying shares on an as-converted basis.
– Consent rights over items such as changes of control, M&A or other extraordinary transactions; material asset sales, investments, expenditures, borrowings, or issuances; related party transactions; material changes to organizational documents or lines of business; and other material adverse changes.
– Guarantees or collateral.
– Financial covenants.
– Prepayment provisions.
– Purchase price adjustments beyond standard anti-dilution provisions in capital markets convertible notes – e.g., ratchets for lower-priced issuances within a certain period.
– Equity sweeteners, such as warrants.
– Paying interest cash or in kind (PIK interest), or a combination of the two.
– Alternative return calculations – e.g., based on a specified internal rate of return (IRR) or multiple on invested capital (MOIC).
– An extended lock-up or standstill for the investor, as well as restrictions on hedging and transfers.
– Registration rights to facilitate SEC registered resale.
– Issuing in the form of preferred stock, rather than debt.
The memo says that converts are also playing a growing role in the pre-IPO ecosystem, with pre-IPO convert deals often involving discussions of similar features as PIPE converts. See the memo for a more nuanced discussion. If you’re looking for more on converts, check out our “Convertible Debt” Practice Area for more resources.
We’ve posted the transcript for our annual webcast “The Latest: Your Upcoming Proxy Disclosures” with Mark Borges from Compensia and CompensationStandards.com, Dave Lynn of Goodwin Procter, TheCorporateCounsel.net and CompensationStandards.com, Alan Dye from Hogan Lovells and Section16.net and Ron Mueller from Gibson Dunn. They broke down all you need to know for the upcoming proxy season. The webcast covered the following topics:
– Status of SEC Executive Compensation Disclosure Requirements
– Other Possible Topics for SEC Review
– Incentive Compensation – Disclosure Considerations for Tariff Challenges and Discretionary Adjustments
– Executive Security and Other Key “Perks” Disclosures
– Investor Perspectives: “Homogenization” and Performance Equity
– Proxy Advisors – Impact of the Executive Order
– Proxy Advisors – Voting Policy Updates for 2026
– Proxy Advisors – Impact of Announced Move Towards “Customization” of Voting Policies
– Proxy Advisors – Status of Legal Challenges in Texas and Florida
– New Challenges with Shareholder Engagement
– Clawback Policies – Lessons from 2025
– Compensation-Related Shareholder Proposals in 2026
– ESG and DEI Goals: Impact of Shifting and Conflicting Perspectives
– Managing Stock Price Volatility When Granting Equity
This program covered a lot of ground on how to anticipate and handle difficult proxy season issues. Members of this site can access the transcript of this program for free – as well as on-demand CLE credit. If you are not a member of TheCorporateCounsel.net, email info@ccrcorp.com to sign up today and get access to the replay and full transcript. It’s a great way to get up to speed!
Last month, John observed that “DExit” hasn’t been a stampede by any stretch, based on the (limited) number of reincorporation proposals and high percentage of Delaware-incorporated IPOs that occurred in 2024 and 2025.
A recently published dataset for entity formations, gathered by Professor Andrew Verstein at the UCLA School of Law, takes that one step further – Delaware experienced a “sharp increase” in incorporations in 2025, on an absolute basis as well as relative to other states. Here’s more detail from this HLS blog:
The Corporate Census is a draft paper and accompanying dataset that tracks entity formation in the United States. It presents a near-complete dataset of entity formations — including corporations, LLCs, and other business forms — for all U.S. states, dating back to the nation’s founding. It allows entity-by-entity, week-by-week, analyses and comparisons across states. The database includes about 100 million formations and allows for granular, longitudinal analysis of state popularity, entity-type trends, and legal or economic shocks.
And:
About 30% more Delaware corporations formed in 2025 than in 2024, greatly exceeding the prior trendline. This, while national incorporation levels remained flat.
This was an absolute increase, not driven by a decline in formation in other states. While Delaware averaged 1090 new corporations per week in 2020-24, that number increased by 309 in 2025. The rest of the nation as a whole enjoyed no statistically significant increase in corporate formation, nor did any other state individually. Plainly, something happened in 2024 or was anticipated for 2025 that rendered Delaware more attractive as a site of formation in 2025.
I was on the edge of my seat after reading that line, but the paper doesn’t arrive at any firm conclusion about what may have driven Delaware’s popularity last year, and we also can’t predict for sure whether the trend will continue. Nevertheless, it’s helpful to have numbers, instead of just “vibes,” about where Delaware stands.
We’ve known for a while that companies have been staying private longer and raising lots of capital along the way. The recent report from the SEC’s Office of the Advocate for Small Business Capital Formation confirmed that once again. The Staff found:
– The number of comapnies remaining private eight years or more after receiving their first VC round had quadrupled from 2014 to 2024, and
– 45% of unicorns are 9+ years old.
But hope springs eternal, and 2026 may be the year when more of them (finally, hopefully) move forward with a public debut.
These mega deals bring a different dynamic to the table when it comes to structuring the IPO and everything that goes into it. For example, this article from The Information gives a reminder that “innovative” lockups are on the table. Here’s an excerpt:
At least two large banks largely ruled out a standard IPO lockup period of either 90 to 180 days and are discussing how to design a staggered lockup release for the companies.
. . .
One option is staggering the dates to prevent a wave of selling on one day. IPO bankers and lawyers said investors could be allowed to sell a portion of their holdings every 20 to 30 days. Releases can also be triggered when the stock hits a certain price, they said.
The article notes that some companies that are believed to be in the pipeline have raised tens of billions of dollars privately. So, banks are looking to mitigate the risk of a mass selloff while also giving key insiders a path to liquidity.
Lockup variations aren’t unprecedented. Overall, underwriters have gotten more comfortable with early release mechanisms and see them as a tool to help with public float – e.g., early release based on stock price performance (as noted above), accommodating a release if the lockup is set to expire during a quarterly blackout period, or both. But there are still sensitivities, especially close to the IPO. Keep in mind that immediate sales might have collateral impacts on Section 11 liability as well – which is something I blogged about a few years ago in the lockup context. Meredith gave an update last summer on where this theory stands.
In this 21-minute episode of the Women Governance Trailblazers podcast, Courtney Kamlet and I spoke with Wei Chen – who serves as Chief Legal Officer and Executive Vice President of Government Affairs at Infoblox, and also founded The Atticus Project. We discussed:
1. Key leadership lessons that have shaped Wei’s approach to governance and compliance across different corporate cultures.
2. Wei’s vision for The Atticus Project to use AI tools to transform contract review and M&A diligence in corporate legal environments.
3. Practices boards can adopt to oversee technology risks and opportunities — including how to prepare for evolving regulations and use cases.
4. How governance professionals can credibly add value to corporate AI practices, in order to encourage responsible use of AI while also harnessing opportunities.
5. Wei’s vision for how AI will reshape corporate governance and the role of legal advisors in the next 5-10 years, and Wei’s advice for the next generation of women governance trailblazers.
To listen to any of our prior episodes of Women Governance Trailblazers, visit the podcast page on TheCorporateCounsel.net or use your favorite podcast app. If there are governance trailblazers whose career paths and perspectives you’d like to hear more about, Courtney and I always appreciate recommendations! Drop me an email at liz@thecorporatecounsel.net.
As of the time of this blog, it’s looking pretty likely that our government will shut down this weekend. I’m not sure whether to call it “good news” that we still have muscle memory from the last time around – but if nothing else, those recent experiences help us know what to expect. As a refresher:
– Ahead of the shutdown, we typically see the SEC post an operations plan and the Corp Fin Staff post pre-shutdown guidance – the August/September 2025 documents are here and here, respectively. The catch is that the Staff has to wait for the green light from elsewhere in the government to be able to post the guidance – and with the last go-round, that came very late in the game.
– Last time, the Corp Fin Staff provided a helpful update mid-shutdown, which we expect to carry forward, and I won’t be too surprised if the guidance also addresses some other pain points that were under discussion last fall.
– The exchanges are likely to step into more of a gatekeeping role.
– The Staff is still working through a large backlog of registration statement reviews, which is affecting turnaround times. Those will continue to pile up if the Staff gets furloughed again. A shutdown may also affect rulemaking priorities.
– Thankfully, this year’s Rule 14a-8 process means that the shutdown won’t derail proxy season. In the past, a proxy season shutdown would not only exacerbate the backlog that the staff would need to address upon their return, but everyone would be waiting for no-action letters and wringing their hands over how to proceed.
– We have a handful of helpful post-shutdown insights into how things will work when the government eventually reopens, which clients will surely be asking about and will help you with your game plan.
Every shutdown is unique, so we can’t be certain that everything will be handled the same way as it was last fall. But at least we know the general playbook and what to watch for. Stay tuned.
As I wrote on Monday, the Corp Fin Staff issued a CDI last week that prohibits voluntary exempt solicitations. But how is that going to be policed? This Gibson Dunn blog points out a possible hook:
The revised interpretation does not directly address how the revised position will be monitored and enforced, but we note that Rule 15 of Regulation S-T provides the SEC with the authority to remove a submission from EDGAR if, among other things, the agency has reason to believe the submission is misleading or unauthorized.
Notably, the new interpretation does not prevent shareholder proponents and others from conducting exempt solicitations through platforms other than EDGAR. However, whether or not filed on EDGAR, exempt solicitations remain subject to the anti-fraud provision of Rule 14a-9, which makes it unlawful for any soliciting materials to contain false or misleading statements or omissions of a material fact, and the conditions set forth in Rule 14a-2(b)(1)(vi), under which the exemption from having to file a proxy statement is not available to “[a]ny person who, because of a substantial interest in the subject matter of the solicitation, is likely to receive a benefit from a successful solicitation that would not be shared pro rata by all other holders of the same class of securities.”
At this point, I think it’s a little murky what will happen if anyone tests the boundaries of the CDI. A stern finger-wagging, or something more? Even if the Staff would plan to pull down filings, there may not be anyone around to do that if the government shuts down. What we do know is that anti-fraud liability continues to apply. And in practice, companies should monitor their own EDGAR pages and alert the Staff if they see a problematic filing – providing a copy of the notice and information showing that the shareholder doesn’t own more than $5 million of stock of the company.
At least the CDI has finally given ESG and anti-ESG proponents something to agree on, with Jim McRitchie and the National Legal and Policy Center both publishing similar grievances yesterday. The NLPC screed is, to put it politely, “interesting.” I’ll note Jim Moloney wasn’t looking very wolf-like when I saw him this week. Yes, I deliberately linked to the Gibson Dunn blog to tie this all together.
