Regulation A+ and Other Alternatives to a Traditional IPO

Understand Regulation A+ and other alternative funding methods

Regulation A+ and Other Alternatives to a Traditional IPO delves into the details of the new SEC rules under the JOBS Act of 2012 to examine the benefits and pitfalls for entrepreneurs and investors. Written by the 'Godfather of Reg A+,' this book breaks down the complex details of Regulation A+ and other alternative funding methods to help small businesses determine how best to go public and raise capital. A traditional IPO comes with barriers that can be insurmountable for a small company seeking to enter the public markets; thus far, reverse mergers have provided a challenging 'back door' to the market, but Regulation A+ re-opens the front door to allow small cap companies to raise capital while keeping offering and compliance costs manageable in a way not possible with a traditional IPO. More complex than simple crowdfunding, yet just as accessible by all investors, Regulation A+ is a step up for entrepreneurs at any stage wanting to go public where Wall Street meets Main Street.

Straightforward explanations, smart strategy, and illustrative examples make this book an invaluable guide for those seeking to truly understand the nuances of Regulation A+ in order to work more effectively within its bounds.

• Understand how Regulation A+ differs from a traditional IPO and the early experience with this exciting new approach
• Examine the JOBS Act and the SEC's rules under Title IV
• Explore the past, present, and future of reverse mergers, special purpose acquisition companies (SPACs) and self-filings
• Discover new alternatives including new rules under Rule 504 and Regulation S

The new rules provide a faster, more streamlined, more cost-effective route to up to $50 million in capital, and offer companies more flexibility than ever. Every entrepreneur needs to know all available funding options, and Regulation A+ and Other Alternatives to a Traditional IPO provides essential guidance from the expert in the field.

Preface

Acknowledgments

Chapter 1: Why Go Public?

Advantages of Being Public

Disadvantages of Being Public

Weighing the Pros and Cons

Chapter 2: Pre-2012: The History of Regulation A & the Death of Small Company IPOs

Regulation A – Not Too Popular Before 2012

Reg A Through the Years

Why Small Companies Struggled to Go Public before the JOBS Act

Reg A vs. Private Offering Under Regulation D

And so……

Chapter 3: The Jobs Act and Its Genesis

“Old” Regulation A

Feldman First Proposes “Reg A+” at SEC Conference

Development and Enactment of the JOBS Act

Other Key Elements of the JOBS Act

Reg A+ Title IV Language

And so...

Chapter 4: The SEC’s Rules Under Title IV Regulation A+; Court Challenge

SEC’s Reg A+ Rule Proposal

Comment Process

Final Reg A+ Rules

Massachusetts and Montana’s Failed Lawsuit Against the SEC

And so……

Chapter 5: Offering Statement and Light Reporting Preparation; Testing the Waters

Offering Statement Preparation

Light Reporting Preparation

Testing the Waters

And so……

Chapter 6 – Early Experience With Regulation A+ – Wall Street Partners With Main Street

Who Is Utilizing Reg A+?

Attractive Industries

And so……

Chapter 7 – Potential Changes To Regulation A

OTC Markets Petition

Blue Sky Issues

Testing the Waters Issues

Other Issues

And so……

Chapter 8 – Basics of Reverse Mergers

Overview of Reverse Mergers

IPOs vs. Reverse Mergers

A Little History, Rule 419 and Subsequent Rulemakings

The Importance of Due Diligence in Reverse Mergers

And so……

Chapter 9 – Troubled Industry: China, Seasoning Rules, Bogus Shells

The China Bubble Pops

The SEC Responds With Draconian Seasoning Rules

Bogus Shells and Prosecutions

And so……

Chapter 10 – the Future of Reverse Mergers

Reverse Merger then OTC Trading

Bypass Seasoning with $40MM Public Offering

Merger with an Operating Public Company

The Real Risks of Using Bogus Shells

The Future Supply and Cost of Shells

And so……

Chapter 11: Special Purpose Acquisition Companies (SPACs)

Introduction to SPACs: The GKN Experience

The First SPAC Resurgence—Bubble and Bust

SPACs’ Recent Return

What Is the Future of SPACs?

And so…

Chapter 12: Self-Filings

How Do Shares of Stock Become Tradable?

Self-Filing Through Form S-1 Resale Registration

Mechanics of Form S-1 Self-Filing

Self-Filing Through Form 10 Registration

And so…

Chapter 13: Other IPO Alternatives

Intrastate Exemption

Rule 504

Regulation S

And so…

Chapter 14: The Experts Speak – A Look Ahead

Current Political and Economic Environment

Current Developments

And so…

About the Author

Index

DAVID N. FELDMAN is a prominent corporate and securities attorney, entrepreneur and partner in the global law firm Duane Morris LLP. He is often referred to as the "Godfather" of Regulation A+ having coined the term in 2010. Feldman is a strong advocate and practitioner of this exciting and emerging streamlined process of completing a smaller public offering. Feldman is a thought leader and frequent public speaker on all things small business and the small cap markets. Feldman's blog, visited by thousands each month, can be found at www.davidfeldmanblog.com.

From David Feldman (the "Godfather" of Regulation A+) comes the authoritative resource for investors and entrepreneurs who want a clear understanding of the new SEC rules under the JOBS Act of 2012. Regulation A+ and Other Alternatives to a Traditional IPO offers an in-depth examination of the complex JOBS Act, citing both the benefits and challenges. Following the guidelines outlined in this essential guide, small businesses can determine how best to go public and raise much-needed capital. While Feldman spotlights Reg A+ as the leading alternative to a traditional IPO, he also offers an update on and introduction to reverse mergers, self-filings and other IPO alternatives.

Before Regulation A+ was enacted, small cap companies with a desire to enter the public marketplace had been shut out of the traditional IPO process. Regulation A+ offers these businesses an opportunity to go public by raising capital while keeping offering and compliance costs at a manageable rate. Throughout the book, the author presents a concise and reliable introduction to the new Reg A+ rules that offer a more flexible, streamlined, and cost-effective approach for accessing up to $50 million in capital. Using Regulation A+ and Other Alternatives to a Traditional IPO as a roadmap can help investors join others who have found success using this attractive method to raise money and take their companies to the next level.

Written in Feldman's engaging style and filled with logical, plain English explanations, a smart strategy, and illustrative examples, Regulation A+ and Other Alternatives to a Traditional IPO is the go-to reference for anyone who wants to master the nuances of Regulation A+'s dynamic new approach and explore other available funding options.

Praise for
Regulation A+ and Other Alternatives to a Traditional IPO

"I applaud David's book and the comprehensive overview he's provided surrounding alternative methods to the traditional IPO, such as Regulation A+, Reg. D and Reverse Mergers. OTC Markets Group strongly supports online capital raising, as we make it less painful for smaller companies to be public. Our vision is for transparent and technology-enabled public markets to be a competitive source of growth capital for successful and sustainable companies. This publication provides thoughtful context, relevance and insight to these newer capital raising tools."
—R. CROMWELL COULSON, President, Chief Executive Officer and Director of OTC Markets Group, Inc.

"A must-read guide for every CEO, CFO, and Board member of a company evaluating the options for raising growth capital in the public markets."
—PAUL R. GUDONIS, CEO, Myomo, Inc., the first company to complete a Regulation A+ IPO onto a national securities exchange

"David provides helpful historical context to explain the recent historic changes to securities laws and explains a complicated subject with ease. He also provides a fresh, thoughtful perspective on the state of Regulation A+ and other traditional IPO alternatives along with insights into what the future might hold. This book is a must-read for any securities attorney, investment bank, platform or entrepreneur who is considering utilizing Regulation A+."
—RYAN M. FEIT, CEO and Co-Founder, SeedInvest

"In all the writing about Regulation A, what we lack is context. Why did we need the revisions to this ancient regulation? What did 'Regulation A+' replace? What are the alternatives? This is the book that answers those questions and explains Regulation A's place in our ever-more-complex regulatory regime, written by someone with deep understanding of that context."
—SARA HANKS, CEO/Founder, CrowdCheck, Inc. and Co-Chair of the Securities and Exchange Commission's Advisory Committee on Small and Emerging Companies