As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year.  In addition, employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for employers filing electronically.  These due dates…
Continue Reading Reminder to Perform Annual ISO/ESPP Reporting in January 2022

In the beginning of February 2020, COVID-19 seemed to have little to no impact on venture capital investing in the United States.  Fast forward a few weeks later: concerns quickly spread over the entire industry about the effects of the COVID-19 pandemic on venture investing, its impact on startup companies and the U.S. economy in general.  Emerging growth companies instantly went into “conserve cash mode” and applied for PPP loans.
Continue Reading 2020, 2021 and the EC/VC Industry – Review of the Past Year and Predictions for the Current One

On November 2, 2020, the Securities and Exchange Commission adopted amendments intended to ease the rules for certain exempt offerings. These changes include increasing the annual cap on equity crowdfunding from $1.07 million to $5 million, raising the annual cap on Reg A+ offerings from $50% million to $75 million, raising the maximum offering amount for Rule 504 of Regulation D from $5 million to $10 million, and expanding the “test-the-waters” accommodation to Regulation Crowdfunding issuers.
Continue Reading SEC Adopts Rule Amendments Aimed at Expanding Access to Capital

According to a Centers for Medicare and Medicaid Services (“CMS”) study reported in Health Affairs on March 24, 2020, national health care spending reached $3.81 trillion in 2019 and is projected to increase to $4.01 trillion by the end of 2020.  CMS also projects that by 2028, health care spending will reach $6.19 trillion, and will account for 19.7% of GDP, up from 17.7% in 2018.
Continue Reading Venture Capital And Private Equity Investors Take Note: Primary Care May Be The Next Behavioral Health

As the COVID-19 pandemic spread from Asia to the rest of the world at the beginning of 2020, global venture capital (VC) funding dropped dramatically—by about 20% since December 2019 according to Startup Genome.[1]  While the longer-term effects of the pandemic on startups’ ability to raise money cannot be fully grasped yet, it is likely that this downward trend will continue.  Furthermore, though many venture rounds in Q1 2020 benefitted from optimistic beliefs in a V-shaped economic recovery, deals that get done over the next several quarters may reflect pressures resulting from what most now predict to be…
Continue Reading Investments in Emerging Growth Companies Post-COVID-19

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), was promoted as a new piece of legislation creating groundbreaking additional pathways to funding for companies, which was especially highlighted by the 2008 financial crisis.  Two provisions in the JOBS Act, created “Regulation” crowdfunding and “Reg A+” offerings, were particularly focused on early stage and emerging growth companies’ financing needs.
Continue Reading Issues Regarding SEC Proposal to Expand Private Offering Exemptions

As discussed in our December 16, 2010 Executive Compensation Law Blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year. In addition, employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for employers filing electronically.
Continue Reading Reminder to Perform Annual ISO/ESPP Reporting in January 2020

As an expensive “slap on the wrist,” the Securities and Exchange Commission (“SEC” or the “Commission”) recently concluded that approximately $12.7 million worth of funds raised in a 2017 Initial Coin Offering (“ICO”) by Gladius Network LLC (“Gladius”) were part of an unregistered securities offering, and all proceeds must be returned to investors. However, the penalty to Gladius for their regulatory violations was zero.
Continue Reading With the SEC, Cooperation is Key

In a flurry of activity and confluence of developments, the SEC, FINRA and a Brooklyn federal judge have commenced actions and made rulings that continue to define the regulatory framework and obligations surrounding the sale and trading of digital securities, whether they are labeled as cryptocurrencies or tokens.
Continue Reading Recent Development in Regulatory Enforcement of Digital Securities

This article was originally posted to the Corporate and Securities Law Blog on July 12, 2018.

On June 28, 2018, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to the definition of “smaller reporting company” which expand the number of companies that qualify as smaller reporting companies and can thereby take advantage of the scaled disclosure requirements applicable to such companies. The amendments to the definition of “smaller reporting company” will be effective on September 10, 2018.
Continue Reading SEC Expands the Definition of “Smaller Reporting Company”