Regulation A+ 2019 Q&A – Securities Lawyer 101

Regulation A+ Attorneys and Offerings Q&A - The  Regulation A exemption  provides an  exemption from registration that can be used in combination with a Rule 506 private placement, a direct public offering and/or initial public offering. Since Regulation A was amended in 2015, it has gained notable market acceptance and has undergone a few changes. Regulation A has two offering tiers: Tier 1 and Tier 2.  Regulation A+ Tier 2 has become an established method of Going Public particularly on the OTC Markets. Regulation A simplifies the process of obtaining the seed stockholders required by the Financial Industry Regulatory Authority (“FINRA”) while allowing the issuer to raise initial capital. This blog post addresses the most common questions we receive about Regulation A+.

Regulation A provides an  exemption from registration that can be used in combination with a Rule 506 private placement, a direct public offering and/or initial public offering by a private company or company seeking to go public. Since Regulation A was amended in 2015, it has gained notable market acceptance and has undergone a few changes. Regulation A has two offering tiers: Tier 1 and Tier 2 Tier 2 has evolved into a recognized method of Going Public particularly on the OTC Markets. Regulation A simplifies the process of obtaining the seed stockholders required by the Financial Industry Regulatory Authority (“FINRA”) while allowing the issuer to raise initial capital. This blog post addresses the most common questions we receive about Regulation A+.

How much can I raise with Regulation A+?

Tier 1  is available for offerings of securities of up to $20 million in a 12- month period, with no more than $6 million in offers by selling security holders that are affiliates of the issuer. Tier 2 is available for offerings of securities of up to $50 million in a 12-month period with no more than $15 million in offers by selling security holders that are affiliates of the issuer.

What securities can I  register on Form 1-A pursuant to Regulation A+?

Regulation A can be used to register shares, warrants, and convertible equity securities. Read More

The 3(a)(10) Exemption from SEC Registration

Registration Statements - Securities Lawyer 101

Securities Lawyer 101 Blog

Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”) exempts the offer and sale of securities in certain exchange transactions from the registration statement requirements. In SEC Legal Bulletin 3A, the Securities and Exchange Commission (the “SEC”) provided guidance regarding the Section 3(a)(10) exemption and the resale status of securities issued pursuant to Section 3(a)(10). The Section 3(a)(10) exemption is Read More

Rule 506(c) Offerings: Everything You Need to Know

506(c) offering

Issuers can advertise their securities offerings under Rule 506(c) of Regulation D. Upon its implementation in 2013, Rule 506(c) removed the 80-year prohibition against the general solicitation and advertising of private placements. Since the rule change, issuers have been bombarded with investor relations providers offering to assist with may advertise their Rule 506(c) offerings using a variety of venues including the internet, television, seminars, email campaigns and hard mailers. Issuers should conduct thorough due diligence before hiring any third party that purports to provide services in connection with their Rule 506(c) offerings to avoid disqualification of the exemption.

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Regulation A Offerings – Blue Sky Requirements

Regulation A+ Attorneys and Offerings Q&A

Regulation A, also known as Regulation A +, provides an exemption from registration for sales of up to $50 million in a 12 month period. The exemption provided by Regulation A + offers numerous benefits to issuers seeking to go public or remain private. Regulation A+ provides issuers with two choices for their offerings. Tier 1 provides an exemption for an offering of up to $20 million in a 12-month period and  Tier 2 provides an exemption for an offering of up to $50 million in a 12-month period. One aspect of Regulation A that should be considered is the impact of state blue sky laws on the offering as well as resales.

Regulation Tier 1 v Tier 2 – Regulation A State Blue Sky Compliance Read More

Regulation A Investor Bulletin Issued by SEC

Regulation A Offering Exemption

Regulation A Not Giving Warm Fuzzies to the SEC

In April of this year, NASDAQ submitted a proposal related to the Regulation A Offering Exemption which would require any Company listing on NASDAQ in connection with an offering under Tier 2 of Regulation A of the amended Securities Act of 1933, (the “Securities Act”), to have a minimum operating history of two years at the time of approval of its initial listing application.

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SEC Updates PAUSE List of Firms Using Inaccurate Information

sec pause list

The SEC has updated its PAUSE list (Public Alert: Unregistered Soliciting Entities), “adding 23 soliciting entities, two impersonators of genuine firms, and 12 bogus regulators.” This is a great resource for investors, as it will help you to protect yourself against possible scammers. This list can be viewed here. It includes hundreds of firms, both financial and law.

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Hamilton & Associates Comment to the SEC Regarding Rule 211 (15c2-11)

sec comment

Hamilton & Associates, a boutique securities law firm in Boca Raton, Florida, would like to take this opportunity to comment on the Commission’s proposed rule for the publication or submission of quotations without specified information.  We applaud the Commission’s decision to amend Rule 15c2-11, last modified in 1991, to accommodate changes in the over-the-counter market and in the way OTC securities are traded in the digital age.  The Internet, now available to nearly all investors, has created new ways of accessing and storing information, and the rise of the online brokerages has made trading securities easier and less expensive than it was three decades ago.  The result has been the entry of large numbers of new investors into the once-obscure OTC market.  Revisions to the rule are long overdue.

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SEC Proposes Rule 15c2-11 Changes – Form 211

sec 15c2-11 changes

SEC Proposes to Amend Rule 15c2-11

On September 26, 2019, the Securities and Exchange Commission (the “SEC”) announced proposed amendments to its Rule 15c2-11 of the Securities Exchange Act of 1934 (the “Exchange act”.  The purpose of Rule 15c2-11  is to establish requirements that must be met by broker-dealers before they can publish quotations for securities in the over-the-counter (OTC) known as the OTC Markets.  Issuers that are not compliant with Rule 15c2-11 will be relegated to the Grey Market until compliance is regained. OTC Markets companies wishing to achieve or regain compliance must do so by locating a broker-dealer willing to sponsor them.  The broker-dealer, using information supplied by the issuer, will file a Form 211 with the Financial Industry Regulatory Authority (FINRA).  FINRA will process the filing; it may request clarification or additional information until it’s satisfied.   Form 211 is commonly  used by smaller issuers after a Form S-1 registration statement has been filed with the SEC as part of a going public transaction.

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SEC Adopts New Rule to Modernize Regulation of Exchange-Traded Funds

new rule

In addition to their new rule allowing companies to “test the water“, the SEC has announced another new rule regarding Exchange-Traded Funds (ETFs). The SEC says they are modernizing the regulation of ETFs “by establishing a clear and consistent framework for the vast majority of ETFs operating today.”

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SEC: Facebook to Pay $100M for Misleading Investors

facebook 100m

After the election of 2016, a lot was made of “fake news” and Facebook’s role in spreading it. Part of this large controversy involved the consulting firm Cambridge Analytica, which was run by Steve Bannon. Cambridge Analytica used the data of 87 million in violation of Facebook’s policy, and used that data to its own ends.

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