Will My Regulation A Offering Be Integrated?

Regulation A Offering

The Regulation A offering integration rules prevent companies from improperly avoiding registration by dividing a single securities offering into multiple securities offerings to take advantage of Securities Act exemptions that would not be available for the combined offering.

Recently amended Regulation A also known as Regulation A+ contains integration safe harbor provisions. Under Rule 251(c), a Regulation A+ offerings will not be integrated with prior offers or sales of securities. Subsequent offers or sale will not be integrated with securities offerings that are:

  • registered pursuant to Securities Act, unless the abandoned Regulation A offering provisions are applicable
  • conducted pursuant to Rule 701;
  • conducted pursuant to employee benefit plans;
  • conducted pursuant to Regulation S;
  • conducted pursuant to Regulation Crowdfunding; or
  • conducted more than six months after the completion of the Regulation A offering.

If no safe harbor is available, integration of a Regulation A offering will depend upon the particular facts and circumstances of the offering.  Regulation A+’s adopting release states that a Regulation A offering should not be integrated with another exempt offering if each of the offerings complies with the requirements of its exemption. The SEC provided a few useful examples.

Issuers simultaneously conducting a Regulation A offering and exempt offering where general solicitation is not permitted would need to ensure investors in exempt offering were not solicited through the Regulation A offering. This includes by any testing the waters communications made in pursuant to Regulation A.

Similarly, an issuer using general solicitation and/or advertising in a Rule 506(c) offering simultaneously with a Regulation A offering should not advertise the Regulation A offering in its Rule 506(c) offering materials, unless the advertisement complies with Regulation A’s requirements.

For general information on integration of offerings, see “Will My Offerings Be Integrated?”

For further information please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real South, Suite 202 North, Boca Raton, FL, (561) 416-8956, or by email at info@securitieslawyer101.com.  This information is provided as a general or informational service to clients and friends of Hamilton & Associates Law Group, P.A. and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that prior results discussed herein do not guarantee similar outcomes.

 

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Going Public Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com