The SV150 is released each year by Lonergan Partners, a leading executive search firm based in Silicon Valley, and is comprised of the 150 largest public companies in Silicon Valley, based on annual sales.

Key Changes in Risk Factor Disclosure Practices Under Amended Rules:

• Risk Factor Summary. Rather than decrease the total number of pages of risk factors, most SV150 companies opted to maintain robust risk factor disclosure and, in accordance with the amended rules, add a risk factor summary to their Form 10-K filings. Last year, 73% of SV150 companies had more than 15 pages of risk factors, compared to 71% of the SV150 companies this year. Nearly all of the companies with more than 15 pages of risk factors this year added a risk factor summary to their Form 10-K filings.
• Use and Number of Risk Factor Headings. Nearly all of the SV150 companies now include risk factor headings. In addition, there is much broader usage of risk factor headings. Last year, most companies included three or fewer total headings. This year, most companies include four to seven total headings, and have expanded beyond the two most prevalent headings from last year, risks related to the business and risks relating to ownership of the company’s stock.
• General Risk Factor Heading. Many of the SV150 companies surveyed now include a “General Risk Factor” heading in their risk factors, and average more than four risk factors under this heading. Of note, following the effective date of, and consistent with, the amended rules, the SEC began issuing comment letters requesting that companies revise their risk factor section by relocating risks that could apply generically to any registrant or offering to the end of the risk factor section under the heading “General Risk Factors.”

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