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.
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