TheCorporateCounsel.net

April 7, 2017

Regulation Crowdfunding: Higher Limits & New CDIs

Earlier this week, the SEC announced that it had adopted amendments increasing the amount that companies can raise under Regulation Crowdfunding in order to adjust for inflation. Companies can now raise $1.07 million under Regulation Crowdfunding – up from the $1 million limit initially established by the JOBS Act. Corresponding changes were made to the income threshold ($100K to $107K) for determining investment limits and the maximum amount ($2K to $2.2K) that can be sold to an investor who doesn’t meet that income threshold.

Financial statement disclosure thresholds – which are based on offering size – were also adjusted upward to account for inflation (i.e., $100K to $107K, $500K to $535K, and $1 million to $1.07 million).

That same day, the Staff also issued these two new Regulation Crowdfunding CDIs:

New Question 201.02
New Question 202.01

The new CDIs address thresholds for disclosure of related party transactions under Rule 201(r) & eligibility to terminate ongoing reporting obligations under Rule 202(b)(2).

Regulation A+: 6 New CDIs

It’s been a busy week or so at the SEC for matters relating to small issuers. The JOBS Act amendments & new Regulation Crowdfunding CDIs followed on the heels of these 6 new Reg A+ CDIs that were issued last Friday:

– New Question 182.15
– New Question 182.16
– New Question 182.17
– New Question 182.18
– New Question 182.19
New Question 182.20

Here’s an excerpt from this MoFo blog that provides a brief summary of the new CDIs:

These address an issuer’s ability to use Form 8-A to register securities under the Exchange Act concurrent with completion of a Tier 2 Regulation A offering; the suspension of Tier 2 reporting obligations in the case of a withdrawn offering; the age of required financial statements for a Tier 2 offering; the requirement to file a tax opinion as an exhibit to Form 1-A; the inclusion of an auditor’s consent to use an audit report included in a Form 1-K annual report as an exhibit to the Form 1-K; and the application of Item 19.D of Guide 5 to Regulation A offering sales materials.

IPOs: “It Slices . . . It Dices. . . 1,001 Household Uses!”

Speaking of small issuers, what child of the 1970s & 1980s does not have a soft spot for Ronco?  C’mon, think about how many of this company’s products have made the transition from cheap consumer crapola to genuine pieces of Americana  – the “Vegematic” . . . “Popeil’s Pocket Fisherman”. . .  the “Showtime Rotisserie” – I could go on & on.

I even bought my mom the “Ronco Buttoneer” for Christmas one year (cut me some slack – I was 11 years old & she’s forgiven me).

Anyway, the latest incarnation of this American corporate icon – Ronco Brands – recently filed for a Reg A+ IPO.  Here’s the preliminary offering circular.

John Jenkins