March 2020 – Ortoli Rosenstadt LLP

U.S. Securities laws require U.S. publicly traded companies , including all companies listed on the Nasdaq Stock Market and the New York Stock Exchange, to file various reports with the U.S. Securities and Exchange Commission (the “SEC”). The SEC has recognized that the outbreak of Coronavirus Disease 2019 (COVID-19) has complicated the preparation and filing of these reports.  In response, the SEC issued an order (the “Order”) [1] on March 4, 2020 providing conditional regulatory relief for certain publicly traded companies with respect to their obligations to file these reports. This memorandum discusses the Order and additional information released by the SEC.

I.Relief Provided by the Order

Pursuant to the Order, publicly traded companies may have an additional 45 days to file certain disclosure reports that would otherwise have been due between March 1 and April 30, 2020 (which time period the SEC may extend at its discretion). For example, a domestic filer with a December 31 fiscal year end could seek to extend its filing date for its annual report on Form 10-K to May 15, 2020 (as opposed to the un-extended filing deadline of March 31, 2020). Similarly, a foreign filer with a December 31 fiscal year end could seek to extend its filing date for its annual report on Form 20-F to June 14, 2020 (as opposed to the un-extended filing deadline of April 30, 2020).

Conditions to the Grant of Relief

The SEC will grant the 45-day extension if the conditions below are satisfied:

• The company is unable to meet a filing deadline due to circumstances related to COVID-19;
• Any company relying on the Order furnishes a short report to the SEC (on Form 8-K or Form 6-K), by the later of March 16 or the original filing deadline of the report stating:
• that it is relying on the Order;
• a brief description of the reasons it could not file such report on a timely basis;
• the estimated date by which the report is expected to be filed;
• a risk factor explaining the impact of COVID-19 on its business; and
• if the reason the subject report cannot be filed timely relates to the inability of any person, other than the company, to furnish any required opinion, report or certification, the Form 8-K or Form 6-K contains as an exhibit a statement signed by such person stating the specific reasons why such person is unable to furnish the required opinion, report or certification on or before the date such report must be filed.
• The delayed report is filed no later than 45 days after the original due date (unless otherwise extended as discussed herein); and
• In the delayed report, the company discloses that relied on the extension granted by the Order and states the reasons why it could not file such report on a timely basis.

Furnishing of Proxy and Information Statements

A company or any other person is temporarily exempt from the requirements of the Exchange Act of 1934, as amended (the “Exchange Act”), and the rules thereunder to furnish proxy statements, including any annual reports and other soliciting materials (the “Soliciting Materials”), and the requirements of the Exchange Act and the rules thereunder to furnish information statements, including any annual reports (the “Information Materials”), where the conditions below are satisfied.

• 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.

II. Additional Information

SEC will take the following positions with respect to certain obligations under the Securities Act and the Exchange Act:

• Eligibility to use Form S-3 and Form F-3: To be eligible to use Form S-3 or Form F-3, a company must be timely in its reporting obligations.  Any report that is filed on a delayed basis in compliance with the Order, will be considered timely filed for purposes of Form S-3 and Form F-3.
• Form S-8 eligibility requirements and current public information eligibility requirements of Rule 144(c): To be eligible to use Form S-8 or to rely on Rule 144, a company must be timely in its reporting obligations.  Any report that is filed on a delayed basis in compliance with the Order, will be considered timely filed for purposes of Form S-8 and Rule 144.
• Form 10-K, Form 20-F and 10-Q: Companies that file 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 the additional extension provided by Rule 12b-25 if they are unable to file the required reports on or before the due date as extended by the Order.

The SEC understands that some companies may require additional or different assistance in their efforts to comply with the requirements of the U.S. federal securities laws. The SEC will address these and any issues on a case-by-case basis in light of their fact-specific nature.  Any such request of additional relief from the SEC should be done hand-in-hand with the company’s U.S. securities counsel.

III.  Authors’ Final Thought

Through the Order, the SEC attempts to provide relief for certain filing obligations under U.S. federal securities laws to companies located in areas affected by COVID-19 or companies with operations in those areas. Companies are reminded that they shall keep investors informed of insight regarding their assessment, plans and material risks to their business and operations resulting from the COVID-19. As this memorandum is a summary of the Order issued on March 4, 2020 and the SEC’s interpretation of it is still evolving, you are encouraged seek further guidance with your legal advisor before relying upon the Order.

For more information on the above or in other matters, please contact the Authors:

William S. Rosenstadt, Partner, Asia Practice Co-Chair

Mengyi “Jason” Ye, Of Counsel, Asia Practice Co-Chair

Yuning “Grace” Bai, Associate

© Ortoli Rosenstadt LLP 2020

[1] Release No. 34-88318 (https://www.sec.gov/rules/other/2020/34-88318.pdf)

https://www.sec.gov/news/press-release/2020-53