• On Nov. 17, 2016, the SEC Division of Corporation Finance issued a new Compliance and Disclosure Interpretations (CDI) regarding the integration of successive offerings under Regulation D.The new CDI provides that a private offering conducted pursuant to Rule 506(b) will not be integrated with an offering subsequently conducted using general solicitation pursuant to Rule 506(c) within six months of the Rule 506(b) offering, as long as the issuer satisfies the requirements of the applicable rule for each offering.
  • Rule 502(a) has historically provided a safe harbor from integration for two Regulation D offerings if the first offering is completed more than six months before the start of the second Regulation D offering.The rule also provides factors to be considered in determining whether the offerings should be integrated if the six month safe harbor is not met.
  • The new CDI provides that the Rule 502(a) integration factors are not the sole means by which an issuer may determine whether the two offerings should be integrated.The staff looked to Rule 152, which provides that transactions by an issuer not involving a public offering will remain exempt from registration notwithstanding that the issuer subsequently makes a public offering and/or files a registration statement, to support the position that the two offerings would not be integrated.
  • The Division also issued three new CDIs relating to Regulation A:
  • When qualifying an additional class of securities by post-qualification amendment to a previously qualified offering statement on Form 1-A, the issuer need only include information related to the additional class of securities.Issuers must also disclose any unregistered securities issued or sold within the past year, including any unregistered securities that were issued or sold pursuant to Regulation A.
  • When calculating whether a change in price in a Regulation A offering exceeds 20 percent of the maximum aggregate offering price to determine whether a post-qualification amendment to revise pricing information is necessary, the 20 percent change may be measured from either the high end (in the case of an increase in the offering price) or the low end (in the case of a decrease in the offering price) of that range.Further, that provision may not be used to make an offering in excess of the limits set forth in Rule 251(a) or which would result in a Tier 1 offering becoming a Tier 2 offering.
  • Consistent with the treatment of “emerging growth companies” under the FAST Act, an issuer relying on Regulation A may omit financial information for historical periods if it reasonably believes that those financial statements will not be required at the time of qualification of the Form 1-A.The issuer must amend the offering statement before qualification to include all required financial information and redistribute any solicitation materials at the time that any previously omitted financial information has been included in an amended offering statement.

https://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm#182.12

https://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm#182.13

https://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm#182.14

https://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm#256.34