The SEC has approved 12 Regulation A+ offerings (and about 40 initial Form 1-A filings have been made) since the new Regulation A+ rules became effective in June. The companies now raising money under Regulation A+ include a dental device manufacturer, technology companies, an automaker, a cannabis company and a bank. Regulation A+ allows private companies to raise up to $50 million by selling debt or equity to the public without having to meet all of the requirements of a traditional initial public offering.

Many of the companies using Regulation A+ are true startups, but some are existing businesses with customer revenue and operations. Dental device manufacturer Sun Dental Holdings is notable because it is using a registered broker-dealer placement agent to conduct its offering. Many of the approved offerings seek to publicly sell securities that likely will not result in loss of control for the current owners or require mandatory distributions or dividends, despite potentially raising millions.

Below is a summary of the SEC-approved Regulations A+ offerings. 

Sun Dental Holdings, LLC

  • $20,000,000 Class A Common Units
  • Form 1-A filed Sept. 3, 2015; SEC qualification filed Dec, 1, 2015
  • Tier 2 offering to accredited and non-accredited investors ($10,000 minimum investment)
  • Audited financials
  • Business: traditional dental device manufacturing as well as digital scanning, cloud-based data management system and 3D printing to produce dental devices
  • Use of proceeds: working capital, strategic acquisitions, debt service and acquisition of a dental lab facility in Latin America
  • Distributions: at board’s discretion
  • Liquidity: no secondary market
  • VRA Partners, LLC serves as placement agent (sales also to occur through U.S. crowdfunding platforms such as Crowdfunder.com, Fundable.com, Equitynet.com, Fundamerica.com, Funded.com and Angellist.com)
  • FundAmerica Securities, LLC (registered broker-dealer) to provide anti-money laundering services, bad actor checks, Regulation A advice, subscription agreements, funds processing and other administrative services
  • Voting: one vote per unit (but company controlled by outstanding Management Units entitled to 100 votes per unit)
  • Legal fees: $330,000

 First Light Bancorp

  • $10,000,000 Common Stock
  • Form 1-A filed Sept, 23, 2015; SEC qualification filed Nov, 30, 2015
  • Tier 1 offering to accredited and non-accredited investors (including rights offering to current shareholders) in 12 jurisdictions ($20,000 minimum subscription per new investor; new investors must have minimum annual gross income and net worth of $70,000 or just minimum net worth of $250,000)
  • Audited financials
  • Business: bank holding company
  • Use of Proceeds: debt service and contribution to capital account of subsidiary bank for working capital and a new branch
  • Distributions: at board’s discretion
  • Liquidity: no secondary market
  • No underwriter
  • Voting: one vote per share
  • Legal Fees: $70,000

 Broadcast 3DTV, Inc.

  • $5,000,000 9% Convertible Preferred Stock
  • Form 1-A filed Sept, 4, 2014; SEC qualification filed Nov, 30, 2015
  • Tier 1 offering to accredited and non-accredited investors in New York
  • Unaudited financials (audited financials to be included with annual report)
  • Business: development of viewing systems/screen protector for glasses-free 3D from any angle on smart phones, tablets, computers and TV’s. The company also has its own system for conversion of content from 2D to 3D in HD.
  • Use of Proceeds: operations
  • Distributions: at board’s discretion (9% dividend is cumulative)
  • Liquidity: no secondary market; conversion to common stock is mandatory after 5 years
  • No underwriter
  • Securities may be offered by registered broker-dealers
  • No voting rights (company is controlled by common stockholders)
  • Investment requires binding arbitration
  • Legal fees: $30,000

 Fundrise Real Estate Investment Trust, LLC

  • $50,000,000 Common Shares
  • Tier 2 offering to accredited and non-accredited investors
  • Form 1-A filed Nov, 3, 2015; SEC qualification filed Nov, 24, 2015
  • Audited financials
  • Business: originate, invest in, and manage commercial real estate investments (affiliate of web-based real estate investment platform)
  • Use of proceeds: originate, acquire and structure commercial real estate loans and investments (no specific projects or investments identified)
  • Distributions: quarterly following first real estate investment (but at Manager’s discretion), consistent with REIT rules (funded in part by affiliate’s obligation to purchase additional common shares to support quarterly distribution payments)
  • Liquidity: no secondary market; quarterly redemption plan allows investors to request redemption of 25% of shares after 6 months at 5% discount (or larger discount depending on net asset value), subject to aggregate limits, but redemption request may be rejected for no reason
  • No underwriter
  • No Investment Company Act registration
  • Limited voting rights; no power to elect or vote on Manager
  • Also raising $200,000 in private placement of common shares to affiliates prior to SEC qualification
  • Affiliated sponsor also plans nine additional programs as real estate investment trusts for future offerings
  • Subscription agreement requires binding arbitration
  • Legal fees: $275,000

Elio Motors, Inc.

  • $30,096,000 Common Stock
  • Tier 2 offering to accredited and non-accredited investors
  • Form 1-A filed August 28, 2015; SEC qualification filed Nov, 20, 2015
  • Audited financials
  • Business: designer, developer and manufacturer of highly-efficient, low-cost automobiles
  • Use of Proceeds: develop and validate prototypes of the Elio car
  • Distributions: at board’s discretion
  • Liquidity: no secondary market (expects trading on OTCQX marketplace upon completion of offering)
  • No underwriter (shares sold via www.startengine.com)
  • FundAmerica Securities, LLC (registered broker-dealer) to provide anti-money laundering services, bad actor checks, Regulation A advice, subscription agreements, funds processing and other administrative services
  • Voting: one vote per share
  • Legal fees: $100,000

Med-X, Inc.

  • $15,000,000 Common Stock
  • Tier 2 offering to accredited and non-accredited investors
  • Form 1-A filed Aug, 27, 2015; SEC qualification filed Nov, 3, 2015
  • Audited financials
  • Business: publishing content about the cannabis industry, supplying agricultural products to other commercial cannabis growers, and researching extraction of beneficial cannabis compounds for medical use, and eventually producing medicinal supplements from cannabis oils
  • Use of Proceeds: publish content, market products, research compounds, and establish growing operations
  • Distributions: at board’s discretion
  • Liquidity: no secondary market
  • No underwriter
  • Securities may be offered by independent consultants and registered broker-dealers
  • Voting: one vote per share
  • Private placements completed prior to offering
  • Subscription agreement requires investor to provide indemnification
  • Legal fees: $35,000

 ralliBox, Inc.

  • $3,000,000 Common Stock
  • Tier 2 offering to accredited and non-accredited investors
  • Form 1-A filed Aug, 12, 2015; SEC qualification filed Nov, 2, 2015
  • Audited financials
  • Business: internet-based platform enables users to maintain e-commerce websites for retail products and sell same inventory; also processes purchase transactions (software owned by affiliate; all employees employed by affiliate; all property owned by affiliate)
  • Use of proceeds: consumer awareness and marketing, technology development, operations, and debt service
  • Distributions: at board’s discretion
  • Liquidity: no secondary market
  • No underwriter or broker-dealers (sales made via ralliBox website)
  • Subscription agreement requires investor to provide indemnification
  • Legal fees: $1,000

 Groundfloor Finance Inc.

  • $1,453,000 Limited Recourse Obligations (LROs) (debt)
  • Tier 1 offering to accredited and non-accredited investors in nine jurisdictions (all investors must have $70,000 income/net worth or $250,000 net worth)
  • Form 1-A filed Oct, 7, 2015; SEC qualification filed Oct, 29, 2015
  • Audited financials
  • Business: web-based real estate investment platform for investors and developers
  • Use of proceeds: sale (via internet platform) of 15 specific series of LROs will fund 15 specific loans to developers of 15 specific properties (each property listed and described)
  • Distributions: pro rata portion of any loan payments received from developer-borrower within five days of receipt
  • Liquidity: no secondary market
  • No underwriter
  • No Investment Company Act registration
  • No voting rights
  • Investor agreement requires binding arbitration and investor to provide indemnification
  • Blue Sky: NASAA Coordinated Review Program
  • Legal fees: $16,000

 Steuben Trust Corp

  • 165,000 additional shares of Common Stock offered in share owner dividend reinvestment and stock purchase plan (plan) to existing shareholders (Plan and prior amendments qualified under old Regulation A)
  • Tier 1 offering to existing shareholders
  • Form 1-A filed August 23, 2013; SEC qualification (for fourth post-qualification amendment to Plan) filed October 19, 2015
  • Plan allows shareholders to reinvest cash dividends on Common Stock in the purchase of additional shares of Common Stock
  • Business: bank holding company (sole shareholder of Steuben Trust Company (the bank)

 Coastal Financial Corp (Coastal)

  • $13,039,124 Common Stock
  • Tier 1 offering to accredited and non-accredited investors in specific jurisdictions
  • Form 1-A filed Aug, 24, 2015; SEC qualification filed Sept, 16, 2015 (offering terminated due to failure to obtain shareholder approval for merger)
  • Audited financials
  • Business: both merger parties are bank holding companies
  • Merger consideration: Costal offered common stock to Prime Pacific Financial Services stockholders as merger consideration for merger of Prime Pacific within and into Coastal
  • Distributions: at board’s discretion (no plans to pay dividends)
  • Liquidity: no secondary market (Coastal agreed to obtain written commitment of broker-dealer to act as market maker following closing)
  • Performance Trust Capital Partners, LLC issued fairness opinion regarding merger consideration
  • No underwriter
  • Voting: one vote per share
  • Legal fees: $175,000

Strategic Global Investments, Inc.

  • $2,850,000 Common Stock
  • Tier 1 offering to accredited investors in California, Florida and New York
  • Form 1-A filed Aug, 20, 2015; SEC qualification filed Sept, 16, 2015
  • Unaudited financials
  • Business: managing various business activities, the nature of which changes from time to time (currently supervising building of small luxury villas to be sold as timeshares in Mexico)
  • Use of proceeds: complete houses to be marketed as timeshares
  • Distributions: at board’s discretion (no plans to pay dividends)
  • Liquidity: shares traded on OTC Pink marketplace
  • No underwriter
  • Voting: one vote per share
  • Investor agreement requires investor to provide indemnification
  • Legal fees: $8,000

 Groundfloor Finance Inc.

  • $545,000 limited recourse obligations (LROs) (debt)
  • Tier 1 offering to accredited and non-accredited investors in nine jurisdictions (all investors must have $70,000 income/net worth or $250,000 net worth)
  • Form 1-A filed March 23, 2015; SEC qualification filed Aug, 31, 2015
  • Audited financials
  • Business: web-based real estate investment platform for investors and developers
  • Use of Proceeds: sale (via internet platform) of seven specific series of LROs will fund seven specific loans to developers of seven specific properties (each property listed and described)
  • Distributions: pro rata portion of any loan payments received from developer-borrower within five days of receipt
  • Liquidity: no secondary market
  • No underwriter
  • No Investment Company Act registration
  • No voting rights
  • Investor agreement requires binding arbitration and investor to provide indemnification
  • Blue Sky: NASAA Coordinated Review Program
  • Legal fees: $458,000