This 2026 quick-reference chart summarizes the most frequent comment themes raised by the SEC’s Division of Corporation Finance during its review of Form 1‑A filings under Regulation A. The list reflects real-world staff concerns affecting issuers seeking qualification and provides guidance for drafting stronger Offering Circulars and financial disclosures. For issuers preparing Regulation A filings, proactively addressing these topics can shorten SEC review cycles and accelerate qualification.
| SEC Comment Topic | Common Staff Concern |
| 1. Risk Factors | Overly generic or boilerplate risks that do not identify the issuer’s specific business challenges or uncertainties. |
| 2. MD&A (Management’s Discussion & Analysis) | Lack of analysis explaining why results changed; insufficient discussion of liquidity, capital resources, or going‑concern issues. |
| 3. Financial Statements | Outdated financials, missing PCAOB audit opinion, or interim data omitted when balance sheet is older than nine months. |
| 4. Business Description | Insufficient detail on products, markets, competition, and strategy; inconsistent statements between summary and MD&A. |
| 5. Related‑Party Transactions | Missing details on insider loans, contracts, or ownership; inadequate disclosure of conflicts of interest. |
| 6. Use of Proceeds | Unclear or generic descriptions like ‘general corporate purposes’ without specific allocations or contingencies. |
| 7. Beneficial Ownership | Inaccurate or incomplete ownership tables; missing disclosure of control persons or convertible instruments. |
| 8. Testing the Waters (Rule 255) | Failure to file solicitation materials or missing required legends in pre‑qualification communications. |
| 9. Exhibits and Legal Opinions | Unsigned or missing documents; absence of legal opinion confirming valid issuance of securities. |
| 10. Auditor Consents and PCAOB Registration | Audit report missing auditor consent, date inconsistency, or auditor not PCAOB‑registered for Tier 2 offerings. |
1. Risk Factors
The SEC expects risk factors to be issuer‑specific and substantive. Avoid generic statements like ‘we may not achieve profitability.’ Include quantifiable risks and discuss recent material developments that could impact financial results or investor returns.
2. MD&A (Management’s Discussion & Analysis)
Issuers must explain the reasons behind changes in revenue, expenses, and liquidity. Provide detailed cash‑flow analysis and address trends affecting operations. Generic recitations of financial results without analysis are a common source of delay.
3. Financial Statements
Ensure financial statements are current and audited by a PCAOB‑registered firm for Tier 2 issuers. If the latest balance sheet is more than nine months old, include interim unaudited financials. Confirm consistency across MD&A and exhibits.
4. Business Description
Provide factual, balanced detail about the company’s products, services, and competitive environment. Avoid promotional tone and reconcile all descriptions to the financial statements. The SEC frequently flags inconsistencies between the business section and MD&A.
5. Related‑Party Transactions
Disclose all loans, contracts, and material arrangements with directors, officers, and control persons. Identify conflicts and confirm whether terms were conducted at arm’s length. Missing documentation or incomplete disclosure draws immediate SEC comments.
6. Use of Proceeds
Allocate proceeds specifically (e.g., 40% R&D, 30% working capital, 20% debt repayment). Discuss contingencies if less than the maximum amount is raised. Ambiguous use‑of‑funds sections raise investor‑protection concerns and trigger comment letters.
7. Beneficial Ownership
Ownership tables must reconcile to the capitalization schedule and reflect all convertible and derivative securities. Include footnotes explaining control through affiliates. Ensure totals match and identify all 10%+ beneficial owners and officers as a group.
8. Testing the Waters (Rule 255)
File all pre‑qualification marketing materials, slide decks, and social‑media posts as exhibits. Include mandatory legends disclosing that the offering has not yet been qualified. SEC staff routinely request unfiled or missing TTW content.
9. Exhibits and Legal Opinions
Attach all required exhibits such as charters, bylaws, contracts, transfer‑agent agreements, and counsel opinions. Legal opinions must confirm that the securities are duly authorized, validly issued, fully paid, and non‑assessable.
10. Auditor Consents and PCAOB Registration
Tier 2 issuers must retain PCAOB‑registered auditors. Ensure signed consents accompany all financial statements and that report dates are consistent. The SEC will not qualify a filing missing these confirmations.
This article is general information, not legal or financial advice. Securities counsel with Regulation A experience is worth retaining early in this process.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected].
Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com