Why Use Reg A+ to Raise Capital?

Six Reg A+ offerings filed with the SEC yesterday, but a total of 181 offerings have filed as of January 31, 2017. The SEC qualified 103, while 28 issuers reported selling $259 million in aggregate using the Reg A+ filing process. As the number of companies using Reg A+ indicates, companies are choosing this option more and more for a number of reasons. We explain a few of them in this blog post.

Earlier this year, we quoted an SEC white paper stating that 147 Regulation A+ offerings filed statements as of October 31, 2016, and were seeking up to $2.6 billion in financing. We also wrote in our blog how in the 16 months since the amendments became effective, Regulation A+ securities offerings had outpaced the past rate of Regulation A activity. Perhaps these three motives are the root cause of its popularity.

1.With Reg A+, companies can still raise capital when planning an IPO to the NASDAQ, but can opt to use Reg A+ mid-stream if the NASDAQ minimum for listing is not reached. Companies will then avoid thousands of dollars wasted on offerings that might have otherwise been prematurely abandoned.

2. One other benefit of using Reg A+ for your IPO is that it allows you to go public directly to the NASDAQ, NYSE, the OTCQB or OTCQX, while venture capitals cannot. It has been reported that venture capital firms are more interested in companies that are more likely to deliver a 100X return in about 6 years, but investors still seem pretty interested in companies that might deliver a lesser return. VC firms therefore completely miss an opportunity to work with a growing market.

3. Companies are also pleased to know that Reg A+ allows them to openly market their company instead of undergoing the usual quiet period. Companies get to promote their brand, thus increasing customer interest and attracting strategic partnerships early on in the process.

As a result, Edgar Agents has started to offer new services to its repertoire, in addition to our core products, that are specific to Reg A+ requirements such as marketing services. We have always offered services that comply with the latest filing requirements and now file all the necessary forms for Regulation A+ mini IPOs as well. We also provide financial printing and newswire capabilities.

Edgar Agents is always happy to discuss your specific filing needs and would like to hear from you today. Call our office at 732-780-5036, visit our website www.edgaragents.com or simply send us a message on any of our social networks: LinkedIn, Twitter and Google+, to discuss your next Reg A+ filing.

Why Are REITs So Keen on Reg. A+?

The real estate industry had among the largest number of offerings and the largest total amount across issuers in Regulation A+ activity, according to an SEC white paper. Real estate was also one of the top five, two-digit SIC industries to be listed. Based on these numbers and recent Regulation A+ transactions, it is quite obvious that the real estate market is one to watch in 2017.

Regulation A+ securities offerings have surpassed past Regulation A offerings as of October 31, 2016, according to the white paper, and several issuers reporting proceeds were engaged in real estate “crowdfunding.” The paper also says several issuers in the real estate sector, including real estate “crowdfunding platforms,” have engaged in Regulation A+ offerings. One industry theory not mentioned in the paper is that REITs are attracted to crowdfunding models because both accredited and non-accredited investors can participate in the investment.

Nevertheless, all data points to the same direction, real estate, and an article in Crowdfund Insider confirms it. The Crowdfund article states that more real estate firms are launching their own crowdfunding platforms. In addition, a variety of Regulation A+ real estate funds and traditional investment firms are increasingly using platforms to raise a portion of their capital stack. We agree that real estate should be on our radar, but we must still outweigh the risk factors and valuations with these securities, the paper states. We will also have to see how many additional unregistered online REITs enter the Regulation A market.

Regardless of your industry, you’ll need to work with an experienced filing agent to manage and file all your required SEC forms on time and within compliance. Edgar Agents is one of the pioneers in electronic filings and includes additional services to help with your mini IPO, such as financial printing and newswire capabilities.

To find out how Edgar Agents can facilitate your Regulation A+ mini IPO, call our offices today at (732) 780-5036 or visit our site at www.edgaragents.com. Also visit our social pages on LinkedIn, Twitter and Google+.

Top two-digit SIC industries
Rank Industry	Number of  offerings (%)	Number of  offerings
1  Business services	15%	22
2  Real estate	13%	19
3  Non-depository credit institutions	8%	12
4  Holding and other investment offices	8%	12
5  Depository institutions	7%	10
Rank Industry	Number of  qualified offerings (%)	Number of  qualified offerings
1  Business services	17%	14
2-4  Holding and other investment offices	12%	10
2-4  Depository institutions	12%	10
2-4  Real estate	12%	10
5  Non-depository credit institutions	7%	6
Rank Industry	Aggregate size of offerings (%)	Aggregate size of offerings ($ mln)
1  Holding and other investment offices	20%	$515
2  Real estate	14%	$377
3  Non-depository credit institutions	10%	$253
4  Business services	9%	$238
5  Communications	6%	$161
Rank Industry	Aggregate size of qualified offerings (%)	Aggregate size of qualified offerings  ($ mln)
1  Holding and other investment offices	30%	$445
2  Real estate	10%	$148
3  Depository institutions	10%	$146
4  Business services	8%	$119
5  Non-depository credit institutions	8%	$113

Source: SEC

How Will 2016 Reg A+ Statistics Affect Reg A+ in 2017?

A white paper researched and written for the SEC in early December explains the status of Reg. A+ activity, often called mini IPOs. Although the paper dissects the facts in detail, we have summarized some of its more pertinent findings in this article.

The paper states that Tier 2 offerings were the most common of the two Tiers, accounting for 60% of the qualified offerings in 2016. Under the Tier 2 option, companies can offer securities up to $50 million in any 12-month period. The majority (around 80%) of offerings did not involve testing-the-waters, however.  But with that said, Tier 2 offerings accounted for the most testing-the-waters solicitations.

Tier 2 offerings were also more likely than Tier 1 offerings to be associated with sales by existing affiliated and non-affiliated security holders, with 16% of Tier 2 offerings seeking to qualify sales by existing security holders and 13% seeking to qualify sales by affiliate security holders. Approximately 10% of all offerings involved sales by existing (affiliated or unaffiliated) security holders.

The paper goes on to say that between June 19, 2015, and October 31, 2016, issuers in 147 offerings sought up to $2.6 billion in financing, including up to $1.5 billion across 81 qualified offerings. Approximately $190 million has been raised during that period, and the average issuer was seeking approximately $18 million. 

In addition, the paper states that Regulation A+ securities offerings have surpassed the past rate of Regulation A activity, but hasn’t surpassed Regulation D. The paper’s authors describe a few theories for this, one being familiarity with Regulation D over Regulation A+. Nevertheless, the amount of time it takes the Commission to qualify new Regulation A offerings seems to have decreased as a result of Regulation A+. A few possible reasons could be faster Commission staff reviews of publicly filed offering statements and the adoption of electronic filings in place of paper submissions, all according to the paper.

As for the subject of electronic filing, electronic filing has been an SEC mandate since the late 90s and some filing companies have come and gone since that trend began. Edgar Agents, however, has been consistently converting all SEC mandated paper forms into the required EDGAR and XBRL systems then filing them with the SEC since the rule was initially set in place. We have always offered services that comply with the latest filing requirements and now file all the necessary forms for Regulation A+ mini IPOs for public companies as well. We also offer other value added services such as financial printing and newswire capabilities.

In conclusion, the white paper reiterates what we’ve been noticing all along. Regulation A+ filings will continue to grow as companies become more familiar with the concept. And, we are constantly adding new products and services to assist you with your Reg A+ filings as a result. To find out how Edgar Agents can help with your mini IPO, call our offices today at 732-780-5036 or visit our site and www.edgaragents.com. Be sure to also follow us on LinkedIn, Twitter and Google+.

Who is Your Reg. A+ Filing Agent?

Planning to IPO under Regulation A+? Your first step will be to assemble a team of professionals to successfully execute the process. And most likely, this team will consist of an attorney, accountant, marketing agency, transfer agent and crowdfunding platform, to name a few. These will all be very crucial components to your strategy, but one piece you might not have considered is your filing agent. We recommend that you research the industry for a filing agent who possess a working knowledge of Reg. A+.

The agents you interview should have a good grasp of the Reg. A+ basics such as Tier I and Tier II standards. Partnering with experienced SEC filing agents in any aspect of your IPO will not only facilitate the process, but will most importantly keep you compliant in terms of meeting necessary deadlines. And, although its popularity is quickly spreading, Regulation A+ is still a fairly new concept. It is very easy to misinterpret some filing requirements and there are still kinks for the SEC to iron out, but in the meantime an experienced professional will know exactly what the SEC expects because of the previous filings it has handled.

Since the SEC approved Reg. A+ in 2015, Edgar Agents has handled several Reg. A+ filings for companies crowdfunding under this rule. We have written blog posts about Reg. A+ to help customers better understand the process, SEC requirements and equity crowdfunding in general. Assisting several attorneys with their filings has positioned Edgar Agents as a highly trusted and sought-after filing agency among law firms and accounting firms, but we also work directly with companies IPOing under Regulation A+. Our special packaging for Reg. A+ filings is designed to help clients cut costs during their Reg. A+, mini-IPO process as well.

Whether you are looking for a filing agent or another type of professional to guide you through your IPO, research and experience is key. We suggest you not leave it to chance. To learn more about our Reg. A+ special pricing, call one of our agents at 732-780-5036. To learn more about our products and services, visit our site at www.edgaragents.com or follow us on Twitter, LinkedIn and Google+.

 

Weekly Mergers, Acquistions, Bids and Investments

Last week saw a mix of negotiations and business transactions.Transactions also occurred in a variety of industries, not one necessarily more prominent than the other, but public companies, private companies and investors were active in the technology, energy and healthcare/pharmaceuticals industries most of all.. Finally, there were several acquisitions with just a few investments and announcements to follow. Very few mergers and bids were recorded last week as well.

How to Avoid SEC Glitches that Cause Major Setbacks

Imagine hundreds of filings going through one server, all at once. This type of heavy traffic could cause any server to crash, but many believe it’s the website that crashes. A large queue could cause a server to malfunction, preventing users from accessing a website, and making it seem as though the website has crashed when in reality the server is simply overloaded.

This happened recently at the SEC. The SEC’s server was down during 10Q filings, causing some companies to miss the filing deadline. Although many factors may cause a server to crash, it seems heavy traffic, all at once, caused the SEC server to malfunction during the busy filing period. We suggest companies adhere to some common practices to dodge this problem and never miss a filing deadline, regardless of server failure.

Plan to File Early

We recommend setting a goal to file a few days before the due date, but if it cannot be avoided we recommend companies file by 2:30 pm EST on the deadline date. Many companies have to file dangerously close to the deadline time for reasons outside of their control, and the heavy web traffic could very likely increase significantly around 4 pm EST. This could very likely overload the SEC server, causing delays and even crashing the system altogether. Filing before 2:30 pm EST escapes the chances of being caught in a glitch.

Get Organized

Create a list of items that need to be done by specific dates or times. No matter how close you are to the deadline, be sure to sort out and prepare the most pertinent pieces first before executing your plan of action.  For more on getting organized, check out our blog post Preparing Your Filings in Half the Time.

Make a Checklist

As with all filings, you must always be aware of your deadline. Create a checklist according to due dates. Only list the most important pieces of the puzzle so you don’t overwhelm yourself. Then simply address all the items on the list in an orderly fashion. This simple task will help you stay focused when things get hectic at the final hour. Also, create internal deadlines for each item to help you manage the process. This way you’ll be ready to file sooner than later.

For help creating your checklist, refer to the Deloitte & Touche LLP SEC Compliance Checklist for Annual Reports on SEC Form 10-K.

Use Online Tools

After you’ve created a checklist, incorporate these items into a calendar to share electronically. The Edgar ^® Agents 2016 SEC Filings Calendar is a great source to start since it provides all the deadlines, SEC holidays and any other important dates you should know about when filing your documents. You can also make copies for all parties involved so they keep track on their own as well. This way everyone stays on the same page and uses the calendar as a tool when discussing next steps. Google and Outlook calendars also provide efficient online features, such as reminders.

Submit Financials First

When you are ready, submit your financial statements and notes first – these take the longest to process. Statements and notes need to be formatted in Edgar ^® while specific information needs to be tagged in XBRL throughout the document. This procedure can take some time to administer accurately so sending in financials ensures you will have time to make any edits before the deadline. You will also be less likely to overlook inaccuracies.

Use Proofreader’s Marks

While proofreading your document, use the proper proofreader’s marks. Be sure to incorporate marks that actually request a specific edit and avoid ambiguous symbols that neither correct nor give direction. If you are not familiar with proofreader’s marks, the Chicago Manual of Style, AP or Merriam-Webster are excellent reference guides. Although some symbols may vary, most marks are similar enough to be universally recognized. Also, double check the submission page to make sure the form type and filing period is accurate.

Send Edits in Bulk

Submit all your changes at once or in one proof. If there is more than one party reviewing the document, submit everyone’s edits, plus your own, in one email or in one proof if possible. This could help speed up the alteration process. Also, be sure to work off of the latest draft when making edits. Working off of an older draft can be confusing to all parties involved.

Verify Signatures and Dates

Make sure all signatures and dates are accurate when submitting your documents.  Even if the filing date could change during the conversion process (for example if a company decides to file on another date), be sure to double check the dates and signatures before giving final approval. It’s important to remember that for Edgar ^®/XBRL, signature requirements are satisfied with the signatory’s name typed into the electronic format, but Registrants are required to retain manually signed authorizations of the typed signatures for five years.

Apply Policies and Procedures

If there is anything about filing electronically that you are doubtful about and your research doesn’t answer your questions, give us a call ahead of time. We can help guide you through the necessary steps so you’re prepared to file before the deadline. In addition, be aware that in annual reports companies are required to disclose whether periodic and current reports are available on their website. To assist with this, Edgar ^® Agents offers its clients an XBRL widget that can be easily uploaded onto their site and updates automatically to display the latest financials. Ask about our XBRL widget when you call.

Trust Your SEC Filing Agent

Finally, it is critical to trust your filing agent. Edgar ^® Agents provides unparalleled customer service for its clients and is available 24×7. We also take on last minute projects even during heavy filing periods. If you are not satisfied with your filer, it’s time for a new one now.

To learn more about Edgar ^® Agents and our services, call us at 732-780-5036 or email us at info@edgaragents.com. Also visit our site at www.edgaragents.com or send us a note on any of our social pages. Twitter, LinkedIn, Google+ or Blogger.

SEC Server Crash Delayed 10Q Filings

The SEC’s server crashed while filing Form 10Qs, causing several companies to miss this year’s 10Q deadline. Although many factors will cause a server to crash, it seems heavy traffic, all at once, caused the SEC server to malfunction during the busy 10Q filing period this time.

Imagine thousands of people trying to fit through a tiny space to exit a burning building. This is similar to how heavy traffic might also crash a server. A large queue prevents users from accessing a website, and many people think that the website has crashed when in reality the server is simply overloaded. At Edgar Agents, we suggest companies adhere to some common practices to dodge this problem and never miss a filing deadline, regardless of server failure.

Plan to File Early

We recommend setting a goal to file a few days before the due date, but if it cannot be avoided we recommend companies file by 2:30 pm on the deadline date. Many companies have to file dangerously close to the deadline time for reasons outside of their control, so it is inevitable that heavy web traffic will increase significantly around 4 pm EST. This could very likely overload the SEC server, causing delays and even crashing the system altogether. Filing before 2:30 pm escapes the chances of being caught in a glitch.

Get Organized

Create a list of items that need to be done by specific dates or times. No matter how close you are to the deadline, be sure to sort out and prepare the most pertinent pieces first before executing your plan of action.  For more on getting organized, check out our blog post Preparing Your Filings in Half the Time.

Make a Checklist

As with all filings, you must always be aware of your deadline. Create a checklist according to due dates. Only list the most important pieces of the puzzle so you don’t overwhelm yourself. Then simply address all the items on the list in an orderly fashion. This simple task will help you stay focused when things get hectic at the final hour. Also, create internal deadlines for each item to help you manage the process. This way you’ll be ready to file sooner than later.

For help creating your checklist, refer to the Deloitte & Touche LLP SEC Compliance Checklist for Annual Reports on SEC Form 10-K.

Use Online Tools

After you’ve created a checklist, incorporate these items into a calendar to share electronically. The Edgar ^® Agents 2016 SEC Filings Calendar is a great source to start since it provides all the deadlines, SEC holidays and any other important dates you should know about when filing your documents. You can also make copies for all parties involved so they keep track on their own as well. This way everyone stays on the same page and uses the calendar as a tool when discussing next steps. Google and Outlook calendars also provide efficient online features, such as reminders.

Submit Financials First

When you are ready, submit your financial statements and notes first – these take the longest to process. Statements and notes need to be formatted in Edgar ^® while specific information needs to be tagged in XBRL throughout the document. This procedure can take some time to administer accurately so sending in financials ensures you will have time to make any edits before the deadline. You will also be less likely to overlook inaccuracies.

Use Proofreader’s Marks

While proofreading your document, use the proper proofreader’s marks. Be sure to incorporate marks that actually request a specific edit and avoid ambiguous symbols that neither correct nor give direction. If you are not familiar with proofreader’s marks, the Chicago Manual of Style, AP or Merriam-Webster are excellent reference guides. Although some symbols may vary, most marks are similar enough to be universally recognized. Also, double check the submission page to make sure the form type and filing period is accurate.

Send Changes in Bulk

Submit all your changes at once or in one proof. If there is more than one party reviewing the document, submit everyone’s edits, plus your own, in one email or in one proof if possible. This could help speed up the alteration process. Also, be sure to work off of the latest draft when making edits. Working off of an older draft can be confusing to all parties involved.

Check Signatures and Dates

Make sure all signatures and dates are accurate when submitting your documents.  Even if the filing date could change during the conversion process (for example if a company decides to file on another date), be sure to double check the dates and signatures before giving final approval. It’s important to remember that for Edgar ^®/XBRL, signature requirements are satisfied with the signatory’s name typed into the electronic format, but Registrants are required to retain manually signed authorizations of the typed signatures for five years.

Apply Policies and Procedures

If there is anything about filing electronically that you are doubtful about and your research doesn’t answer your questions, give us a call ahead of time. We can help guide you through the necessary steps so you’re prepared to file before the deadline. In addition, be aware that in annual reports companies are required to disclose whether periodic and current reports are available on their website. To assist with this, Edgar ^® Agents offers its clients an XBRL widget that can be easily uploaded onto their site and updates automatically to display the latest financials. Ask about our XBRL widget when you call.

Trust Your SEC Filing Agent

Finally, it is critical to trust your filing agent. Edgar ^® Agents provides unparalleled customer service for its clients and is available 24×7. We also take on last minute projects even during heavy filing periods. If you are not satisfied with your filer, it’s time for a new one now.

To learn more about Edgar ^® Agents and our services, call us at 732-780-5036 or email us at info@edgaragents.com. Also visit our site at www.edgaragents.com or send us a note on any of our social pages. Twitter, LinkedIn, Google+ or Blogger.