Regulation A; Offering Circular - YouTube

I’m attorney Laura Anthony founding partner of Legal & Compliance, a full service corporate,

securities, and business transactions law firm.

Today is the continuation in a LawCast series talking about Regulation A.

A company intending to conduct a Regulation A offering must file an offering circular

with, and have it qualified by, the SEC.

The offering circular will be filed with the SEC using the EDGAR database filing system.

Solicited prospective investors must be provided with the filed pre-qualified offering circular,

and once qualified, investors must be provided with the final qualified offering circular.

Regulation A rules provide for an access equals delivery method, whereby the offering statement

can be provided via a hyperlink over the internet directly to the EDGAR database inside the

same will satisfy the delivery requirements.

The offering circular will be reviewed much like an S-1 registration statement and declared

qualified by the SEC with an issuance of a notice of qualification.

Like an S-1 process, reviewers will be assigned filings based on industry group.

So far, the SEC has been true to its word that the review process will be lighter and

less intensive than an S-1 process.

Accordingly the process is also quicker, averaging 2 to 3 months as opposed to the 4-plus months

for an S-1.

Companies may file certain updates and changes using a post qualification addendum.

Other more material changes, including the qualification of additional securities, not

originally included in the first Form 1-A, will require a full post qualification amendment

and new review process and new declaration qualification by the SEC.

Some companies are eligible to submit an offering circular to the SEC on a confidential basis.

In particular, only companies that have not previously sold securities under a Regulation

A offering or a Securities Act registration statement may submit the offering confidentially.

Confidential submissions will allow a Regulation A issuer to get the process under way while

soliciting interest from investors using test of the waters provisions without the negative

publicity risk if it extremely alters or withdraws the offering before qualification by the SEC.

The confidential filing, SEC statements, and all amendments must be publicly filed as an

exhibit to the offering statement at least 15 calendar days before qualification.

Confidential submissions to the SEC are completed by choosing a confidential setting on the

EDGAR system.

To satisfy the requirement to publicly file the previous confidential information, the

company can file all prior confidential information as an exhibit to a new non-confidential filing,

or it can change the setting in the EDGAR system on its prior filings, from confidential

to public.

If a company wants to keep certain information confidential, even after the required time

for making such information public, it will need to submit two confidential requests.

One is for the registration review process, and one prior to the confidential filings

being made public.

During the confidential Form 1-A review process, the company should submit a request under

Rule 83 in the same manner it would during a typical review of a registered offering.

Once the company is required to make the prior filings public, the company would make a new

request for confidential treatment under Rule 406 in the same manner as other confidential

treatment requests are submitted.

For a confidential treatment request under Rules 83 and 406, a company must submit a

redacted version of the document via EDGAR with the appropriate legend indicating that

confidential treatment has been requested.

Concurrently, the company must submit a full, un-redacted paper version of the document

to the SEC using the ordinary confidential treatment procedure.

I am securities attorney Laura Anthony, founding partner of Legal & Compliance, and producer

of LawCast.

Should you have any questions about today’s topic, please visit SecuritiesLawBlog.com

and LawCast.com, or contact me directly.

Inquiries of a technical nature are always encouraged.