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As companies remain private longer and continue growing, they often pass the $5 million threshold for the aggregate sales or issuances of securities to employees and other covered persons within a 12-month period, thus triggering the requirement under SEC Rule 701 to provide financial statements and other disclosures to participants in the offering. We are finding that companies may not be aware of the financial reporting obligations under Rule 701 and may not want or be able to provide, even confidentially, the required information to offering participants for competitive reasons. Our Technical Line highlights what private companies need to do to comply with the financial reporting requirements under Rule 701.