Question: If an issuer elects to submit a draft offering statement for non-public staff review before public filing pursuant to Rule 252(d), and, as part of that process, submits correspondence relating to its offering statement, what must it do if it wants to protect portions of that correspondence from public release?

Answer: During the review of the draft offering statement, the issuer would request confidential treatment of any information in the related correspondence pursuant to Rule 83, in the same manner it would during a typical review of a registered offering. It would submit a redacted copy of the correspondence via EDGAR, with the appropriate legend indicating that it was being submitted pursuant to a confidential treatment request under Rule 83. At the same time, it would submit an unredacted paper version to the SEC, in the manner required by that rule. When the issuer makes its public filing of the offering statement, it will be required to file as an exhibit to the electronically filed offering statement any previously submitted non-public correspondence related to the non-public review. Since that correspondence will be information required to be filed with the SEC, the issuer must redact the confidential information from the filed exhibit, include the required legends and redaction markings, and submit in paper format to the SEC’s Office of the Secretary an application for confidential treatment of the redacted information under Rule 406. The staff will consider and act on that application in the same manner it would with any other application under Rule 406 for other types of filed exhibits. As with registered offerings, the review staff will act on Rule 406 confidential treatment applications before the offering statement is qualified. For the requirements a registrant must satisfy when requesting confidential treatment, see Division of Corporation Finance Staff Legal Bulletin No. 1 (with Addendum). [June 23, 2015]

Question: Would a company with headquarters that are located within the United States or Canada, but whose business primarily involves managing operations that are located outside those countries be considered to have its “principal place of business” within the United States or Canada for purposes of determining issuer eligibility under Regulation A?

Answer: Yes, an issuer will be considered to have its “principal place of business” in the United States or Canada for purposes of determining issuer eligibility under Rule 251(b) of Regulation A if its officers, partners, or managers primarily direct, control and coordinate the issuer’s activities from the United States or Canada. [June 23, 2015]

Question: Is a company that was previously required to file reports with the Commission under Section 15(d) of the Exchange Act, but that has since suspended its Exchange Act reporting obligation, an eligible issuer under Rule 251(b)(2) of Regulation A?

Answer: Yes. A company that has suspended its Exchange Act reporting obligation by satisfying the statutory provisions for suspension in Section 15(d) of the Exchange Act or the requirements of Exchange Act Rule 12h-3 is not considered to be subject to Section 13 or 15(d) of the Exchange Act for purposes of Rule 251(b)(2) of Regulation A. [June 23, 2015]

Question: Is a voluntary filer under the Exchange Act an eligible issuer for purposes of Rule 251(b)(2) of Regulation A?

Answer: Yes. A voluntary filer is not subject to Exchange Act Section 13 or 15(d) because it is not obligated to file Exchange Act reports pursuant to either of those provisions. [June 23, 2015]

Question: Is a private wholly-owned subsidiary of an Exchange Act reporting company parent eligible to sell securities pursuant to Regulation A?

Answer: Yes, although the Exchange Act reporting company parent could not be a guarantor or co-issuer of the securities of the private wholly-owned subsidiary. [June 23, 2015]

Question: Can Regulation A be relied upon by an issuer for business combination transactions, such as a merger or acquisition?

Answer: Yes. The final rules do not limit the availability of Regulation A for business combination transactions, but, as the Commission (SEC Rel. No. 33-9497) indicated, Regulation A would not be available for business acquisition shelf transactions, which are typically conducted on a delayed basis. [June 23, 2015]

Question: May a recently created entity choose to provide a balance sheet as of its inception date?

Answer: Yes, as long as the inception date is within nine months before the date of filing or qualification and the date of filing or qualification is not more than three months after the entity reached its first annual balance sheet date. The date of the most recent balance sheet determines which fiscal years, or period since existence for recently created entities, the statements of comprehensive income, cash flows and changes in stockholders’ equity must cover. When the balance sheet is dated as of inception the statements of comprehensive income, cash flows and changes in stockholders’ equity will not be applicable. [June 23, 2015]

Question: Can an issuer solicit interest (or “test the waters”) in a Regulation A offering on a platform that limits the number of characters or amount of text that can be included, thereby preventing the inclusion in such communication of the information required by Rule 255?

Answer: Yes. The staff will not object to the use of an active hyperlink to satisfy the requirements of Rule 255 in the following limited circumstances:

Where an electronic communication is capable of including the entirety of the required statements, along with the other information, without exceeding the applicable limit on number of characters or amount of text, the use of a hyperlink to the required statements would be inappropriate. [June 23, 2015]

Question: Are state securities law registration and qualification requirements preempted with respect to resales of securities purchased in a Tier 2 offering?

Answer: No. State securities law registration and qualification requirements are only preempted with respect to primary offerings of securities by the issuer or secondary offerings by selling securityholders that are qualified pursuant to Regulation A and offered or sold to qualified purchasers pursuant to a Tier 2 offering. Resales of securities purchased in a Tier 2 offering must be registered, or offered or sold pursuant to an exemption from registration, with state securities regulators. [June 23, 2015]

Question: When is an issuer required to engage the services of a registered transfer agent before being able to avail itself of the conditional exemption from mandatory registration under Section 12(g) of the Exchange Act described in Exchange Act Rule 12g5-1(a)(7)?

Answer: An issuer that seeks to rely on the conditional exemption from mandatory registration under Section 12(g) of the Exchange Act must at the time of reliance on the conditional exemption satisfy the requirements of Rule 12g5-1(a)(7). [June 23, 2015]

Question: For an issuer that seeks to qualify an additional class of securities by post-qualification amendment to a previously qualified offering statement, does Item 4 to Part I of Form 1 A require disclosure of only the additional class of securities for which qualification is being sought?

Answer: Yes. An issuer that seeks to qualify an additional class of securities by post-qualification amendment to a previously qualified offering statement would satisfy the requirements of Item 4 to Part I of Form 1 A by providing responses that relate only to the additional class of securities for which qualification is being sought. In Item 6 to Part I of Form 1 A, an issuer is required to provide disclosure with respect unregistered securities issued or sold within the previous year, which would include any class of securities previously issued or sold pursuant to Regulation A within the previous year. [November 17, 2016]

Question: How does an issuer calculate whether the change in price in an offering exceeds 20% of the maximum aggregate offering price?

Answer: The Note to Rule 253(b) provides that a change in price representing no more than a 20% change in the maximum aggregate offering price in a qualified offering statement may be made pursuant to an offering circular supplement and does not require a post-qualification amendment. The 20% change may be measured from either the high end (in the case of an increase in the offering price) or the low end (in the case of a decrease in the offering price) of that range. In no circumstances, however, may this provision be used to offer securities where the maximum aggregate offering price would result in the offering exceeding the limit set forth in Rule 251(a) or if the change would result in a Tier 1 offering becoming a Tier 2 offering. [November 17, 2016]

Question: May an issuer seeking to rely on Regulation A omit financial information for historical periods if it reasonably believes that those financial statements will not be required at the time of the qualification of the Form 1-A?

Answer: Yes. Consistent with the treatment of "emerging growth companies" in Section 71003 of the Fixing America's Surface Transportation (FAST) Act, a company filing or non-publicly submitting an offering statement pursuant to Regulation A may omit financial information for historical periods otherwise required by Part F/S of the Form 1 A, including financial information of other entities required to be included in Part F/S, if it reasonably believes the omitted information will not be required to be included in a filing at the time of qualification, so long as the issuer amends the offering statement prior to qualification to include all financial information required to be included in Part F/S at the time of the qualification. Issuers that rely on this accommodation and solicit interest from potential investors pursuant to Rule 255 should be aware of their obligation to redistribute solicitation materials under the circumstances described in Rule 255(d) at the time that any financial information previously omitted pursuant to this accommodation has been included in an amended offering statement. [November 17, 2016]

Question: An issuer's ability to use the Form 8-A (short form registration statement) to register a class of securities pursuant to Section 12(b) or (g) of the Exchange Act concurrent with the qualification of a Tier 2 offering statement is conditioned on the filing of the Form 8-A and, where applicable, the receipt by the Commission of certification from the national securities exchange listed on the Form 8-A within five calendar days after the qualification of the offering statement. See Note to General Instruction A of Form 8-A. If the fifth calendar day falls on a Saturday, Sunday or federal holiday, is the issuer permitted to register its class of securities if the Form 8-A is filed and, where applicable, the certification by the national securities exchange is received by the Commission on the next business day?

 Answer: Yes. See Exchange Act Rule 0-3. [March 31, 2017]

 Question: An issuer — not currently subject to a Tier 2 Regulation A reporting obligation — qualifies an offering statement pursuant to Tier 2 and prior to making any sales in that offering withdraws its offering statement pursuant to Rule 259. Can the issuer suspend its Tier 2 reporting obligation by filing a Form 1-Z, even though the issuer has not filed an annual report pursuant to Regulation A or the Exchange Act for the fiscal year in which the offering statement was qualified?

 Answer: The staff will not object to an issuer filing a Form 1-Z to suspend its Tier 2 reporting obligation where the Tier 2 offering is validly withdrawn pursuant to Rule 259 prior to making any sales and such withdrawal occurs before the issuer has filed an annual report pursuant to Regulation A or the Exchange Act for the fiscal year in which its offering statement was qualified. [March 31, 2017]

 Question: Paragraph (c)(1)(i) of Part F/S of Form 1-A requires an issuer and, when applicable, other entities for which financial statements are required, to comply with Article 8 of Regulation S-X, as if the issuer was conducting a registered offering on Form S-1, with the exception of the age of financial statement requirements. What are the age of financial statement requirements for Tier 2 offerings?

 Answer: While paragraph (c)(1)(i) of Part F/S specifies that Tier 2 offerings may follow paragraphs (b)(3)-(4) of Part F/S for the age of interim financial statements, as the Commission discussed in the Regulation A adopting release, an issuer in a Tier 2 offering may follow the age of financial statements requirements specified in paragraphs (b)(3)-(4) of Part F/S for financial statements covering both the fiscal year and interim periods. See SEC Rel. No. 33-9741 (March 25, 2015), at Section II.C.3.b.(2). [March 31, 2017]

Question: Is an issuer qualifying an offering statement pursuant to Regulation A required to file a tax opinion as an exhibit to its Form 1-A?

Answer: No. Although not required, an issuer may elect to file additional exhibits, including a tax opinion, pursuant to paragraph 15(b) of Item 17 of Part III to Form 1-A. [March 31, 2017]

Question: Will the staff object if an issuer with an ongoing Regulation A reporting obligation does not include an auditor's consent to the use of an audit report for the financial statements included in a Form 1-K (Annual Report) as an exhibit to the Form 1-K?

Answer: No. [March 31, 2017]

Question: Item 19.D of Securities Act Industry Guide 5 states that an issuer should submit its sales material supplementally to the staff prior to its use. Does this guidance apply to sales material used in connection with an offering under Regulation A?

Answer: No. Item 7(c) of Part II of Form 1-A requires an issuer to follow the disclosure guidelines in the Securities Act Industry Guides. Because submission of sales material pursuant to Item 19.D is not a disclosure guideline, it is outside the scope of Item 7(c) of Part II of Form 1-A and does not apply to sales material used in connection with an offering under Regulation A. [March 31, 2017]

Question: A Regulation A issuer may register a class of its securities pursuant to the Exchange Act on a Form 8‑A concurrently with (i.e., within 5 days after) the qualification of a post-qualification amendment to a Form 1-A. Must the financial statements in the post-qualification amendment be current at the time it is qualified?

Answer: Yes. As the Commission stated in the Regulation A adopting release, Form 8‑A eligibility as it relates to a Regulation A offering is limited to situations in which the Form 8-A goes effective concurrently with (i.e., within 5 days after) the qualification of the Form 1‑A (or a post-qualification amendment to the Form 1‑A) to help ensure that the disclosures in the Form 1‑A, including financial statements, are generally current at the time of effectiveness of the Exchange Act registration. See SEC Rel. No. 33-9741 (March 25, 2015), at p. 190. [September 14, 2017] 

Question: An issuer registers a class of securities pursuant to the Exchange Act on a Form 8-A concurrently with (i.e., within 5 days after) the qualification of a Form 1-A (Offering Statement). The issuer's qualified Form 1‑A did not contain financial statements for the last full fiscal year preceding the fiscal year of effectiveness of the Form 8-A. When is the issuer required to file an annual report on Form 10-K for the preceding fiscal year?

Answer: The staff would not object if the issuer files its first annual report on Form 10-K for the fiscal year preceding the fiscal year in which the Form 8-A went effective within 90 calendar days after effectiveness of the Form 8-A.

For example, the staff would not object if a calendar year-end issuer that qualifies a Form 1-A on March 30, 2018 and registers a class of securities pursuant to the Exchange Act on April 4, 2018 files its first annual report on Form 10-K within 90 calendar days after effectiveness of the Form 8-A. [September 14, 2017]

Question: An issuer registers a class of securities pursuant to the Exchange Act on a Form 8-A concurrently with (i.e., within 5 days after) the qualification of a Form 1-A (Offering Statement). The issuer's qualified Form 1-A did not contain financial statements for one or more quarterly periods that followed the most recent annual or semiannual period for which financial statements were included in the Form 1-A and that were completed prior to effectiveness of the Form 8-A. When is the issuer required to file quarterly reports for these quarterly periods?

Answer: Exchange Act Rule 13a-13 requires the issuer to file a quarterly report on Form 10-Q for the first fiscal quarter following the most recent annual or interim period for which financial statements were included in the registration statement. This report must be filed within 45 days of the effective date of the registration statement or on or by the required due date of the Form 10-Q (as if the issuer already had been required to file Forms 10-Q), whichever is later. Where the issuer's qualified Form 1-A did not contain financial statements for one or more quarterly periods that followed the most recent annual or semiannual period for which financial statements were included in the Form 1-A and that were completed prior to effectiveness of the Form 8-A, the staff would not object if the issuer files a Form 10-Q for the completed quarterly period, or two Forms 10-Q if financial statements for more than one quarterly period were not included in the Form 1-A, within 45 days after effectiveness of the Form 8-A. 

For example, a calendar year-end issuer registers a class of securities pursuant to the Exchange Act on August 10, 2018, concurrent with the qualification of a Form 1-A that includes financial statements for the fiscal year ended December 31, 2017, but no financial statements for the two most recently completed quarterly periods in 2018. The staff would not object if that issuer files its Forms 10-Q for the first and second fiscal quarters of 2018 on or before September 24, 2018. Unlike the Regulation A issuer, a calendar year-end issuer that registers a class of securities pursuant to the Exchange Act on August 10, 2018, concurrent with the effectiveness of a Form S-1, would have been required to include financial statements for the first fiscal quarter of 2018 in its registration statement and would be required to file its Form 10-Q for its second fiscal quarter on or before September 24, 2018. [September 14, 2017]