Startups (JOBS) Act
and Exchange Commission (SEC) to
promulgate rules or regulations to exempt
a class of securities having characteristics
of a liberalized version of the then existing
Regulation A. The amendment, sometimes
referred to as Regulation A+, exempts
offerings of up to $50 million from the
Act, permits general solicitation including
solicitation of non-accredited investors,
permits secondary sales by both affiliates
and non-affiliates of the issuer, and in
some cases preempts state regulation of
the offerings.
Regulation A+ provides for two levels
of offerings. Tier 1 applies to offerings
with an aggregate offering price for the
securities being offered of up to $20
million with not more than $6 million of
secondary sales by affiliates of the issuer.
Tier 2 applies to offerings with an
aggregate offering price for the securities
being offered of up to $50 million with
not more than $15 million of secondary
sales by affiliates of the issuer. Issuers
conducting offerings of up to $20 million
may elect to proceed under either Tier 1
or Tier 2.
Secondary sales by both affiliates and
non-affiliates are limited in an issuer's
initial Regulation A+ offering and any
subsequent Regulation A+ offering within
one year of the initial qualification date to
no more than 30 percent of the aggregate
offering price.
Regulation A+ is available for business
combination transactions, if they are not
shelf transactions.
A+ is available to companies organized,
and with their principal place of business
in, the United States or Canada
investment companies registered under the
Investment Company Act of 1940, blank
check companies, issuers of fractional
undivided interests in oil or gas rights or
similar interests in other mineral rights, or
disqualified by the "bad actor" provisions
under Regulation A+.
sale under Regulation A+ are limited to
equity securities, debt securities and debt
securities convertible or exchangeable to
equity interests, including any guarantees
of such securities. Asset-backed securities
are not eligible for sale pursuant to
Regulation A+.
Rule 255 permits issuers and
those acting on behalf of an issuer to
communicate orally and in writing to gauge
potential investor interest in an offering
both before and after filing an offering
statement. For purposes of the antifraud
provisions of the federal securities laws,
testing the waters communications are
deemed to be an offer of a security for
sale. No solicitation or acceptance of
money or other consideration, nor of any
commitment, binding or otherwise, from
any person is permitted until qualification
of the offering statement.
may be made to any purchaser that is not
an accredited investor
of the greater of such purchaser's annual
income or net worth, if a natural person,
person, unless the securities are listed on
a registered national securities exchange
upon qualification.
determining compliance with the 10
percent investment limitation, provided
that the issuer does not know at the time of
sale that any such representation is untrue.
The final offering circular delivery
requirements may be satisfied by
delivering a notice to the effect that the
sale was made pursuant to a qualified
offering statement that includes the URL,
which, in the case of an electronic-only
with over 20 years of experience representing
companies and individuals that buy, sell and invest
in growth businesses. He works with companies
seeking capital, venture capital and private
equity funds, buyers and sellers of businesses,
and licensors and licensees of technology and
software. He also provides assistance in Software
as a Service and cloud licensing, data privacy
and security, intellectual property protection, non-
competition agreements, executive compensation,
stock options, restricted stock awards, software
and encryption export regulation and strategic
alliances.
1201 West Peachtree Street
One Atlantic Center, Suite 3250
Atlanta, Georgia 30309
404.888.9577 Fax
khlawfirm.com