Skip to main content

The problem solved by continuous offering



Regulation A, also known as Reg A+ provides companies with exemption from registration requirements and it applies to public offering of securities that do not exceed $20 million or $50 million in a one year period. Beside lowering regulatory hurdles and lowering costs Reg A+ has one more important benefit. Regulation A allows the issuer to conduct continuous offering. This means that issuer of securities is allowed to keep some stock for future sale without the need to set a share price at the time of qualification.
After the offering is approved by the SEC, companies have the right the offer stock at various prices over a period of time with the new Reg A+. In a Reg A offering the offering statement is qualified by the SEC and the offering is made by the offering circular. 
At the time of the sale pricing information is filed after sale as a supplement which does not require the SEC review. First you need to understand the difference between amending and supplementing Reg A offering.  Amending occurs when when there is a major change  and filing the amendment requires the SEC to review the offering again. Supplementing occurs when no major change is made and SEC does not have a reason to review the offering.

Offering statement needs to specify the range of price.  When the SEC approves the offering, you’ll submit only a supplement stating the final pricing when you sell the stock. However, you cannot leave out the number of securities (the volume of equity securities or aggregate primary number of debt securities) to be offered.
The company requires being up-to-date in its semiannual and annual report filling during the sale time to have a continuous offering. Many companies will utilize continuous offerings for shareholders sales and stock that is intended to be sold within the next two years after the offering is qualified.

In a traditional continuous offering on Form S-1 securities are offered at a  fixed price and they will be offered at the same price in the future. To enable a company to change price an issuer must file an amendment to its registration statement and wait for the SEC to approve it. Under Reg A issuer can make continuous offering that commences within two calendar days  after the qualification date, will be made on a continuous basis, may continue for a period in excess of 30 calendar days from the initial qualification date and at the time of qualification are reasonably expected to be completed within two years of the initial qualification date. Reg A allows issuers more flexibility in the pricing of securities in an offering. You can add-on the offering circular to change the price range of, or show a drop in the volume of, the securities offered in reliance on an approved offering statement within Regulation A, inasmuch as the decline in the volume of securities offered or change in the value range would not significantly change the declaration contained in the offering statement at official requirement. Any decline in the securities volume offered and a fluctuation in price range, for instance, price drop from low or high may bounce back or be noticed by the commission in the offering circular supplement that has been filed if, on the average, the volume drop or price change represent not more than a 20% difference from the change from the highest average offering price measured using the information in the approved offering statement.

For Continuous Offering Reg A provides key benefits, permitting delayed offerings for sales of securities after the offering is qualified without further SEC review.
Labels:
Location: West Palm Beach, FL, USA

Comments

Post a Comment

Popular posts from this blog

OTC stocks more difficult to trade and deposit

  Mina Mar Group helps micro-cap companies structure their growth. Micro-capitalized companies are those with less than $50,000,000 in equity, sometimes under $1,000,000. Restructuring involves raising money (both debt and stock), and planning how they will eventually harvest that wealth. If you’re a founder or investor, the secret to harvesting your equity is to possess assets with a developed market for their sale; up until recently, that market was the public market. Now, Over-The-Counter Securities (“OTC Securities”) don’t serve that purpose since, unless you’re a tech unicorn doing an IPO, there are essentially no ways to sell the shares you’ve invested in. OTC securities – how they were deposited five years ago. Brokerages all around the country have tightened compliance over the past five years to the point where no one may deposit share certificates into their brokerage accounts, even if they can prove that they paid for them. Consider the following demand from a secondary ...
Post a Comment
Read more

All-cash, All-stock offer

An acquisition strategy known as an “all-cash, all-stock offer” requires the buyer to commit to purchasing all of the target company’s outstanding shares for a certain amount in cash. It is also characterized as buying all of a company’s outstanding shares from its shareholders in exchange for payment. All-cash, all-stock offers are typically taken into consideration as a strategy to complete an acquisition. This could be an excellent technique the acquiring corporation might use to make the transaction appear sweet and persuade shareholders who are on the fence to accept the sale by offering a premium above the cost at which the shares are now trading. So if it’s that case, if indeed the company was purchased at a premium, then shareholders of the target company could experience an increase in the value of their shares. Even when we talk about cash deals, a stock value for the target firm is discussed, and that value may be considerably higher than its current market price. Therefore,...
Post a Comment
Read more

Company Disclosures

When we speak about disclosures and what they represent in financial terms, that actually refers to providing the public with all relevant information about a company on time.  So relevant information includes facts, figures, dates, procedures, innovation, etc, which means any information regarding a company that can probably impact an investor’s decision. As a result, it is necessary to comprehend that public company directors and officers are in charge of company disclosures and securing investors with complete and valid information. Access to material info enables investors to make information-based investment decisions, which is vital for efficient market pricing and on which state and federal securities are based.  Anytime new stocks are issued to the public, the SEC requisite disclosures of relevant financial and business info to possible investors, with exemptions provided for private placements and small issues. Integrated disclosure structure is the name give...
Post a Comment
Read more