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SEC Trends & Developments - Spring 2013 - Latest Comments from the Commission

“Latest Comments from the Commission” highlights noteworthy quotes from recent SEC comment letters. For a complete listing of SEC comment letters and registrants’ responses, please visit www.sec.gov.
 
JOBS ACT
 
Since you appear to qualify as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, please disclose on your prospectus cover page that you are an emerging growth company, and revise your prospectus to:

  • Describe how and when a company may lose emerging growth company status;
  • Briefly describe the various exemptions that are available to you, such as exemptions from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934; and
  • State your election under Section 107(b) of the JOBS Act:
    • If you have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b), include a statement that the election is irrevocable; or
    • If you have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1), provide a risk factor explaining that this election allows you to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. Please state in your risk factor that, as a result of this election, your financial statements may not be comparable to companies that comply with public company effective dates. Include a similar statement in your critical accounting policy disclosures. In addition, consider describing the extent to which any of these exemptions are available to you as a Smaller Reporting Company.
     

COMPENSATION DISCUSSION AND ANALYSIS - RATING PAST PERFORMANCE

Please expand your response to include more specific disclosure regarding the personal objectives of each named executive officer and how these objectives impacted incentive compensation amounts. For example:

  • Please describe the actual personal objectives or key performance measures established for your chief executive officer and other named executive officers. We note that your proposed disclosure includes the types of personal objectives that could be established for each of your named executive officers.
  • Please clarify the actual level of achievement of personal objectives for each of your named executive officers, such as by providing the overall performance rating for each named executive officer.
  • Please explain how performance ratings and achievements affected incentive compensation awards for each named executive officer.

LITIGATION

If there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred, in your next periodic filing, please either disclose an estimate (or, if true, state that the estimate is immaterial in lieu of providing quantified amounts) of the additional loss or range of loss, or state that such an estimate cannot be made. Please refer to FASB ASC 450-20-50. You may provide your disclosures on an aggregated basis. Please include your proposed disclosures in your response.

SEC Trends & Developments - Spring 2013 - Issue 

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