can new reg a crowdfinanced offerings salvage the small cap ipo?
DESCRIPTION
This is the slide presentation form NowStreet's 3/13/14 "Reviving Capital Formation with Reg A Crowdfunding" webinar. Speakers included key sponsor of the JOBS Act, Congressman Patrick McHenry as well as industry influencers: David N. Feldman and Samuel S. Guzik of Richardson Patel LLP. The webinar which can be found at https://www.brighttalk.com/webcast/9407/103933 focuses on: • Can Reg A Crowdfinanced Offerings replace the conventional small cap IPO? • Examining Tier 1 and Tier 2 Reg A offerings • Exempting Reg A from state blue sky laws • Reg A Crowdfinance versus Title III Crowdfinance • Is a JOBS Act 2.0 in our imminent future?TRANSCRIPT
![Page 1: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/1.jpg)
Although there hasn’t been as much attention drawn to Title IV of the JOBS Act, raising the Reg A threshold to $50M and exempting Reg A offerings from
state blue sky laws can potentially transform the small cap equity markets - particularly in conjunction with a viable venture exchange and crowd-
investing principles.
Join us for this timely and informative webinar as key sponsor of the JOBS Act, Congressman Patrick McHenry as well as industry influencers: David N.
Feldman and Samuel S. Guzik of Richardson Patel LLP illustrate how Reg A can play a critical role in facilitating capital formation.
Key discussion points will include:
Can Reg A Crowdfinanced Offerings replace the conventional small cap IPO?
Examining Tier 1 and Tier 2 Reg A offerings
Exempting Reg A from state blue sky laws
Reg A Crowdfinance versus Title III Crowdfinance
Is a JOBS Act 2.0 in our imminent future?
Moderated by: Dara Albright of NowStreet Wire
Samuel GuzikRichardson Patel LLP
Rep Patrick McHenryU.S. Congressman
Reviving Capital Formation with Reg A Crowdfunding
David FeldmanRichardson Patel LLP
![Page 2: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/2.jpg)
Regulation A+ Proposal:Making the Grade?
David N. Feldman, Esq., PartnerRichardson & Patel LLP
NowStreet Wire WebinarMarch 13, 2014
2
![Page 3: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/3.jpg)
Topics
• Existing Regulation A
• JOBS Act Changes – Regulation A+
• New Proposed SEC Rules
• Possible Comments and Changes
• Summary of Benefits vs. S-1
3
![Page 4: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/4.jpg)
Existing Regulation A
• Simplified public offering, general solicitation permitted
• $5 million limit per year
• Full state “blue sky” merit review
• No audit required
• Can “test the waters” prior to offering
• No regular SEC reporting after offering
4
![Page 5: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/5.jpg)
Existing Regulation A (continued)
• Up to $1.5 million in resale to be offered
• Paper filings
• Only US and Canadian companies
• Reduced disclosure in offering statement –Q&A or narrative format
• Virtually no issuers utilized
5
![Page 6: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/6.jpg)
JOBS Act Changes
• Jumpstart Our Business Startups (JOBS) Act directed SEC to effect changes to Regulation A to enhance attractiveness and protection
• Maximum offering to be increased to $50 million
• State blue sky review preempted if sold to “qualified purchasers”
• SEC can require audit, some reporting
6
![Page 7: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/7.jpg)
New Proposed SEC Rules
• Two tiers: Tier I up to $5 million and Tier II anything up to $50 million in 12 months
• Test the waters expanded to pre- and post-filing of offering statement
• Filings can be confidential until 21 days before SEC approval
• Tier II Offerings blue sky exempt for all investors
7
![Page 8: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/8.jpg)
New Proposed SEC Rules (cont’d 1)
• Audited financials required in Tier II, but Canadian can use IFRS
• Post-offering reporting after Tier II: six month and annual reports plus current reports, no insider, proxy or tender offer filings
• Up to $15 million in resale securities in Tier II
8
![Page 9: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/9.jpg)
New Proposed SEC Rules (cont’d 2)
• No more than 10% of income or net worth can be invested
• Only narrative disclosure format or S-1
• Shelf offering possible for up to two years
• Still otherwise non-reporting, US/Canada
9
![Page 10: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/10.jpg)
Possible Comments and Changes
• Simple method to become reporting (8-A)
• No investment limit for accrediteds, or no limits at all
• Allow shell companies and SPACs
• Allow foreign companies and IFRS
• Reconsider $50MM limit
• No blue sky for public resale
10
![Page 11: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/11.jpg)
Summary of Benefits vs. S-1
• Test waters with any investor
• Blue sky exempt
• Reduced offering disclosure
• Less post-offering reporting than ‘34 Act – no insider or proxy filings
• Confidential filing during road shows
• Trade on OTCQX if qualified
11
![Page 12: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/12.jpg)
Questions?
David N. Feldman, Esq.
Richardson & Patel LLP
The Chrysler Building
405 Lexington Ave., 49th Floor
New York, NY 10174
www.richardsonpatel.com
www.DavidFeldmanBlog.com
12
![Page 13: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/13.jpg)
Congressman Patrick McHenry10th District of North Carolina
13
http://mchenry.house.gov/
![Page 14: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/14.jpg)
14
![Page 15: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/15.jpg)
15
![Page 16: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/16.jpg)
16
![Page 17: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/17.jpg)
17
![Page 18: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/18.jpg)
18
![Page 19: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/19.jpg)
19
![Page 20: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/20.jpg)
20
![Page 21: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/21.jpg)
21
![Page 22: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/22.jpg)
22
![Page 23: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/23.jpg)
23
![Page 24: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/24.jpg)
24
![Page 25: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/25.jpg)
25
![Page 26: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/26.jpg)
26
![Page 27: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/27.jpg)
27
![Page 28: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/28.jpg)
28
![Page 29: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/29.jpg)
29
![Page 30: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/30.jpg)
30
![Page 31: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/31.jpg)
31
![Page 32: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/32.jpg)
Take Action!
Contact your local congressman: http://www.house.gov/representatives/find/
To contact the SEC go to www.sec.gov or send letters to:
The Honorable Mary Jo White U.S. Securities & Exchange Commission
100 F. Street, NE Washington, D.C. 20549
RE: Rulemaking Under Title IV of the JOBS Act (Regulation A+)
32
![Page 33: Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?](https://reader036.vdocument.in/reader036/viewer/2022081403/545c181db0af9f9a2c8b46ad/html5/thumbnails/33.jpg)
The Webinar Sequel - May 20, 2014 at 1pm EST
“Creating Liquid Secondary Markets for Crowdfinance and Newly Public Small Caps”
https://www.brighttalk.com/webcast/9407/105697
33
David FeldmanRichardson Patel LLP
Sam GuzikRichardson Patel LLP
David WeildChairman of IssuWorks
Former Vice Chairman of NASDAQ