Public companies should consider including Coronavirus related risk factors in public disclosure documents

As updates on the family of viruses now identified as COVID-19 continue to emerge, it is important to note the impact that this may have on your public company’s disclosure documents.

The potential impacts of COVID-19, or any similar risk area, on the operation of public companies, including their earnings, supply chains, customers etc. has led securities commissions to begin encouraging issuers to start thinking about including risk factors (such as COVID 19) into their public disclosure documents.

For what purpose you may ask?

As you may know, there are certain requirements laid out by securities regulators regarding when and how information regarding your company must be disclosed. These requirements aid in providing your investors with the accurate and up-to-date information they need to make appropriate and informed investment decisions. Including risk factors in these documents (which can cover a multitude of areas) is an additional layer of education to your potential investors on the risks of investing in your business.

Yet, how can you report accurate information on risks that are ongoing and ever changing?

Be mindful that although outcomes of these events may be uncertain, proper disclosure of risk factors may be meaningful to an investment decision and therefore, should be included in your disclosures accordingly.   Issuers should carefully consider how COVID 19 and similar types of outbreaks might impact their business now or in the future and ensure that their disclosed risk factors are revised and expanded to cover any such risks.

Interested in learning more about public disclosure documents and how to include risk factors on your disclosures?

Contact a member of our Securities & Public Company Representation team today!

This blog post is intended to provide general information and does not constitute legal advice. You should consult a lawyer for advice regarding your individual situation. 

Every effort has been made to ensure the contents of the blog post were accurate as of the date it was written, however, the law can change and we cannot guarantee that the information remains accurate.  In addition, because the comments above are of a general nature, they may not apply for every situation.  If you have questions, please contact us and we would be happy to discuss your individual circumstances, and whether there have been any changes to the law that would affect the information presented.

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