The SEC has published 11 Compliance and Disclosure Interpretations related to Regulation A+ — numbered 182.01 through 182.11 under Securities Act Rules. Highlights are:
- Twitter is allowed for testing the waters! Conditions include that the communication contains an active hyperlink to the required statements that otherwise satisfy Rule 255 and, where possible, the communication prominently conveys, through introductory language or otherwise, that important or required information is provided through the hyperlink. The “where possible” language is a nice touch, since the “prominently conveys” language seems to be required, but ignored in practice, in other staff guidance on social media.
- An issuer is considered to have its “principal place of business” in the United States or Canada if its officers, partners, or managers primarily direct, control and coordinate the issuer’s activities from the U.S. or Canada, even if the business primarily involves managing operations that are located outside the U.S. or Canada.
- Companies that have suspended their previous public reporting obligations under Section 15(d) of the Exchange Act in accordance with applicable rules are eligible to use Regulation A+.
- Voluntary filers are eligible to use Regulation A+.
- Private wholly-owned subsidiaries of Exchange Act reporting companies are eligible to use Regulation A+.
- Regulation A+ may be used for M&A transactions, other than acquisition shelf transactions.
- A recently created entity may provide a balance sheet as of its inception date as long as the inception date is within nine months before the date of filing or qualification and the date of filing or qualification is not more than three months after the entity reached its first annual balance sheet date.
- State securities law registration and qualification requirements are not preempted with respect to resales of securities purchased in a Tier 2 offering (the staff had to say no once).
Filed Regulation A+ transactions continue to be somewhat mysterious when compared to my expectations. See some examples from today, here and here, and my blog of yesterday.
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