Category Archives: SEC Regulations

IPO, meet ED(GAR)… your new lifelong BFF

Simultaneously, as we are working with soon-to-be-public companies on their S-1 registration, we’re getting their EDGAR* ducks in a row – assuring they have the right codes, Vintage teammates and tactical regulatory filing procedures in place to be a compliant and transparent issuer. In addition to clients’ general counsel and outside securities law firm, the investor relations department often need a briefing on their ’34 Exchange Act key filings.


Below is a simplified overview. Click here to be sent hardcopy guidebooks with excruciating detail.

NYSE, NASDAQ and OTC Markets traded public companies must register under Section 12 of the ‘34 Exchange Act

Periodic reporting obligations of the ‘34 Exchange Act

  • Annual report – Form 10-K
  • Quarterly reports – Form 10-Q
  • Current reports – Form 8-K
    • Amendments to charter or bylaws
    • Amendments to Code of Ethics
    • An obligation under an off-balance sheet arrangement
    • Appointment of principal officers
    • Bankruptcy or receivership
    • Changes in accounting firms
    • Changes in fiscal year
    • Completion of the acquisition or deposition of assets
    • Costs associated with exit or disposal activities
    • Creation of a direct financial obligation
    • Departure of directors
    • Departure of principal officers
    • Election of directors
    • Entry into and termination all material is definitive agreement
    • Events that accelerate or increases the direct financial obligation or obligation under off-balance sheet arrangement
    • Failure to satisfy an exchange existing conditioned listing rule or standard
    • Financial statements relating to material acquisitions and exhibits
    • Material compensation arrangements with principal officers
    • Material impairments
    • Material modification to rights of security holders
    • Notice of exchange delisting
    • Regulation FD compliance
    • Results from shareholders’ meetings
    • Results of operations and financial conditions
    • Temporary suspension of trading under employee benefit plans
    • Transfer of listing from one exchange to another
    • Unregistered sales of equity securities
    • Voluntary (random) event disclosure
    • Waiver of a provision of Code of Ethics

Section 14 proxy rules of the ‘34 Exchange Act

  • Proxy Statement
  • Annual Report to shareholders

Section 13 of the ‘34 Exchange Act

  • Schedule 13D or 13 G filing obligation for 5% beneficial owners
  • Beneficial ownership is voting and dispositive power

Section 16 of the ‘34 Exchange Act

  • Statutory insiders – officers, directors and 10% beneficial owners – must file Forms: 3, 4 and 5
  • Beneficial ownership is pecuniary interest
  • Strict liability for short-swing profits

Other schedules include Form F13 and 13H for investment services companies

Disclosure controls

Rule 13a-15 of the ‘34 Exchange Act requires issuers to establish, maintain and enforce disclosure controls and procedures designed to ensure the proper handling of the information that is required to be disclosed in reports filed or submitted under the ‘34 Exchange Act. Additionally, the procedures must ensure that management has all the information that it needs to make timely disclosure decisions

Disclosure controls and procedures relate to collecting and processing information at providing it to management in a timely manner to assess whether disclosure is warranted

CFO and CEOs are responsible for designing the controls and procedures, assessing them as of the end of each fiscal quarter and publicly disclosing the results of their evaluation

  • The SEC has not mandated or identified any specific set of controls
  • There is no definitive SEC ruled checklist and no single set of procedures are appropriate for every public company

NOTE: Disclosure controls overlap with Sarbanes-Oxley(SOX) 404’s internal control over financial reporting which is a process designed and supervised by the issuer’s CEO and CFO and effected by the board of directors, management and other personal. These controls must provide a reasonable assurance regarding the reliability of the financial reports their preparation for external distribution in accordance with GAAP and is evaluated by management and audited annually in a defined manner.  

*Electronic Data Gathering, Analysis and Retrieval

Testing the Waters (and staying within the lines) with Reg A+

Testing the Waters refers to the ability of an issuer to solicit the general public through social media, the internet and other outbound advertising channels. A Reg A+ offering does create costs, starting with the Form 1-A registration and continuing to the Tier II requirement of annual and semi-annual reporting and auditing.


Reg A+’s Testing the Waters provision allows a Tier II issuer to first canvas the capital market to see whether there is satisfactory investor interest prior the deep dive and full commitment of a securities offering.

It can be a very flexible program, however there are strict guidelines in place to protect investors:

  • Issuers can Test the Waters by oral or written communications discussing potential the offering with potential investors, both before and after filing Form 1-A with all supporting materials filed as exhibits to Form 1-A.
  • All solicitation materials must include a legend (see below), and must be preceded or accompanied by the Offering Circular after public filing.
  • Testing the Waters communications are considered offers of securities and are subject to anti-fraud provisions of securities laws.
  • Solicitation materials must be included in the Offering Circular and be publicly available to the entire population of prospective investors: nonaccredited as well as accredited investors (note: Tier II offerings have protective limits on nonaccredited investors).
  • Issuers may solicit interest via social media like Twitter by including an active hyperlink to the Offering Circular to satisfy the requirements of applicable securities laws.
  • Issuers may advertise on their own, without a broker/dealer and may target selective investors: ie sector-based based, etc.

All Testing the Waters communications must include a Legend stating that:

  • No money or other consideration is being solicited or accepted.
  • Offers to buy the securities cannot be accepted, and no part of the purchase price can be received until the Form 1-A is qualified and any offer can be withdrawn or revoked at any time before notice of its acceptance is given after the qualification date.
  • That an indication of interest involves no obligation or commitment of any kind.
  • Contacts of a person from whom the preliminary OC can be obtained, a preliminary URL to access the Offering Circular, or copy of the document (only required in Testing the Waters communications made after a Form 1-A has been filed).

If you are looking for more details on the Reg A+ process, please take the time to watch our video session here. You can also download the slide deck.

Video: Regulation A+ webinar discusses strategy and tactics

Hundreds of attendees registered for last week’s free webinar Regulation A+: A New Capital Raising Alternative for Companies.  Special thanks to our experts. 



Topics discussed:

  • Why raise funds through Regulation A+
  • Eligible issuers and eligible securities
  • Tier 1 and Tier 2 offerings, similarities and comparisons
  • The offering process
  • “Testing the waters”
  • Disclosures, statements and other requirements
  • Blue Sky and state challenges

The webinar, which offered CLE credit, was so well attended that additional educational sessions from McDermott, Will & Emery and Vintage will be in your future!

This is no fee to attend: we do ask for light registration information.

Reg A+ still requires an S-1 level of “data room diligence”

Reg A+ was adopted to facilitate capital-raising by small, emerging growth companies – many who want to avoid the negative perception associated with becoming a public company via a reverse merger or a shell.

Basically, Reg A+ is a simplification of a traditional IPO process – and the robust process of an S-1 registration filing. The Reg A+ offering statement, Form 1-A, consists of three sections.

  • Part I Notification: requires basic information about the issuer and the offering and is predominantly intended to authorize a company’s Reg A+ eligibility.
  • Part II Offering Circular: similar to the prospectus in an S-1 registration statement offering in-depth disclosures – and is the core material for investors.
  • Part III Exhibits: an index and description of required exhibits.

Part II is the meat of the filing and where the company’s working group execute the due diligence, predominantly in a virtual data room, to assess the feasibility of continuing a Reg A+ action.

Much like a traditional IPO S-1, the “mini-IPO” 1-A diligence list is long:

  • Articles, by-laws and resolutions records
  • Assets, both tangible and intangible
  • Bad actor impact
  • Board of directors
  • Client contracts
  • Agreements: consultant, contractor and supplier
  • Corporate governance
  • Environmental law liabilities
  • Financial information: GAAP
  • Insurance coverage
  • Intellectual property
  • Investor relations plans
  • Litigation, past and pending
  • Management agreements and compensation
  • Management biographies
  • Marketing and PR strategies
  • Previous securities offerings
  • Promoters and stock advisors
  • Sales strategies
  • Shareholder information: current ownership
  • Taxes, expected and owed

A transparent diligence process is essential for all parties in the working group. Although the Form 1-A is a lighter process than the S-1, it is absolutely not exempt from Section 10(b) of the ’34 Act forbidding any manipulative, “fraudulent devices and schemes, material misstatements and omissions of any material facts, and acts and practices that operate as a fraud or deceit on any person in connection with the purchase or sale of a security.” All parties in the working can be liable.

We work with companies for both the implementation and training of their virtual data room and the creation and filing of their Form 1-A. Contact us here.

The SEC is closed for Columbus Day: Monday, October 12


In honor of Columbus Day, the SEC is closed on Monday, October 12, 2015. No files can be received.

Files submitted after 5:30 pm ET, Friday, October 9, 2015 will receive a filing date of October 13, 2015 and will be posted to the public on October 13, 2015 at 6:00 am ET.

As with other holiday closings, the following file types will receive a Friday, October 9, 2015 filing date if filed by 10:00 pm ET on Friday, October 9, 2015:

  • Form 13H filings
  • Section 16 filings (3, 3/A, 4, 4/A, 5, 5/A)

For any filing with a due date of Monday, October 12, 2015, the SEC will move the due date to the next business day, Tuesday, October 13, 2015.

Have a great holiday.

Regulation A+ takes off!

Reg A+ has been a win for creating capital raising opportunities for developing companies. Prompted by the JOBS Act, these new SEC rules and amendments to Regulation A became effective June 19, 2015. The “+” is the increasing of the maximum annual offering amount to $50,000,000 from just $5,000,000.


We have already worked with several companies – many “testing the waters” as Confidential IPOs. Two clients that did complete their process – and are openly on the SEC website are:

As you can see, Reg A+ is a very precise process. It should not be considered an “easy path.” Just “easier.” To be eligible for the Regulation A+ exemption, issuers must file an offering statement on SEC Form 1-A. This is similar to a S-1 registration statement but somewhat less arduous and has no SEC fee. The EDGAR system – and Vintage – are the tools used.

Regulation A+ offerings are divided as two tiers:

  • Tier 1: annual offering may not exceed $20 million; no more than $6 million offered by selling security holders that are affiliates
  • Tier 2: annual offering may not exceed $50 million; no more than $15 million offered by selling security holders that are affiliates

Tier 1 offerings or Tier 2 offerings that will be listed on OTC Markets, NASDAQ or NYSE do not have specific investor qualifications. For other Tier 2 offerings, investors must either be “accredited investors” or limit their investment to no more than 10 percent of the greater of annual income or net worth.

A Reg A+ exemption is offered to most companies organized and primarily located in North America. The following organization types cannot use Reg A+.

  • Companies subject to Securities Exchange Act of 1934 requirements
  • Investment companies or BDC (business development companies)
  • Confirmed “bad actors”
  • Development stage companies that have no specific business plan or purpose
  • Development stage companies that have designated that their business plan is to merge or acquire with an “unidentified entities”

As above, the Reg A+ process is very much like the S-1 process. This white paper illustrates that.

What’s all this fussydoo* about Apple and RegFD?

Last week there was a bushel of securities law / capital markets conjecture regarding whether Apple’s CEO, Tim Cook, violated RegFD with a rare mid-quarter update via an email to CNBC’s Jim Cramer.

“Obviously I can’t predict the future, but our performance so far this quarter is reassuring,” Cook wrote.

The media exploded with pundit-ism from every corner of the web, even touting the SEC’s 2012 social media relaxed view on RegFD. It all seemed to be an unnecessary “news-jacking” and knee-jerking reaction. Most of it was trying to make controversy where none was needed.

That email to Mr. Cramer was sent on Monday. Whether it was selective disclosure or not, Apple’s IR and regulatory teams had until the next trading day to correct any possible RegFD gaffe by simply filing a Form 8-K.


Form 8-K requires public companies to make prompt disclosures about a large number of specified events – including, as required by Regulation FD, a possible slip of non-public information in an exclusive, selective manner

Issuers need to ensure that they have in place disclosure controls and procedures that will permit them to monitor developments that could trigger a Form 8-K filing requirement. Apple certainly does. They have a top IR team and probably more in-house counsel than I can imagine.

Generally, a Form 8-K must be filed within four business-days after the day of the incident of a reportable (potential) material faus pax. The following table indicates the day of the week on which Form 8-K filings will generally be due under the standard four-business-day deadline:

Day of selective disclose Filing deadline
Sunday Thursday
Monday Friday
Tuesday Monday
Wednesday Tuesday
Thursday Wednesday
Friday Thursday
Saturday Thursday
Our free guidebooks discuss 8-k at great detail. They are free. Request your copy here.

Our free guidebooks discuss Form 8-k in painful detail. They are free. Request your copies here.

This is an 8-K at it’s most simplistic. As with any regulation, there are exceptions including:

  • Earnings announcements
  • Creation of a contingent obligation under certain off-balance sheet arrangements
  • Termination of employees as part of a plan to exit an activity The appointment of certain new officers
  • Material impairments identified in connection with preparation, review or audit of financial  statements
  • Temporary suspension of trading under the company’s employee benefit plans
  • Company’s decision regarding the frequency of future shareholder advisory votes on executive compensation
  • Voluntary disclosures
  • RegFD violation

Our free guidebooks discuss Form 8-K in painful detail. They are free. Request your copies here. Review our EDGAR services here.

*Not a real word used in securities law or capital markets.