Securities Lawyer 101 l Brenda Hamilton

Securities Lawyer 101 l Brenda Hamilton

Monday, October 12, 2015

Going Public With A DPO - Going Public Securities Attorneys

Going Public WitMost  private companies are unable to locate an underwriter prior to going public. Regulation A+ provides a new option for issuers seeking to raise capital without an underwriter. A direct public offering (“Direct Public Offering”) provides a viable solution to this dilemma. A Direct Public Offering allows a company to sell its shares directly to investors without the use of an underwriter. With a Direct Public Offering, the company files a registration statement with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”).

Typically, in going public transaction Form S-1 (”S-1”) registration statements are used. Regulation A+ is a viable alternative to Form S-1 with scaled down disclosure requirements. Tier 1 offerings allow the issuer to offer and sell up to $20 million in a 12-month period. Tier 1 offerings do not preempt state Blue Sky laws. Tier 2 offerings allow the issuer to raise up to $50 million in a 12-month period. A notable advantage of Tier 2 over Tier 1 offerings is preemption of state Blue Sky laws. Tier 2 offerings require the issuer to provide audited financial statements and comply with ongoing reporting obligations.
A company can use Regulation A+ like a Form S-1 registration statement to register securities on its own behalf in an initial public offering, register securities on behalf of its selling security holders in a secondary offering or register securities on its own behalf as well as for selling security holders.h A DPO - Going Public Securities Attorneys

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