![]() 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 |