Laura Anthony

    • Member Type(s): Expert
    • Title:Founding Partner
    • Organization:Legal & Compliance, LLC
    • Area of Expertise:Securities Law

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Regulation A Ongoing Reporting Requirements
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Uploaded By: Laura Anthony, Esq.
Date Added: April 4, 2017
Description: Regulation A Ongoing Reporting Requirements- Both Tier I and Tier 2 issuers must file summary information after the termination or completion of a Regulation A offering. A Tier I company will need to file certain information about the Regulation A offering, including information on sales and the termination of sales, on a Form 1-Z exit report, no later than 30 calendar days after termination or completion of the offering. Tier I issuers otherwise do not have any ongoing reporting requirements. Tier 2 companies are also required to file certain offering termination information and would have the choice of using Form 1-Z or including the information in their first annual report on Form 1-K. In addition to the offering summary information, Tier 2 issuers are required to submit ongoing reports including: an annual report on Form 1-K, semiannual reports on Form 1-SA, current event reports on Form 1-U and notice of suspension of ongoing reporting obligations on Form 1-Z. The ongoing reporting for Tier 2 companies is less demanding than the reporting requirements under the Securities Exchange Act. In particular, there are fewer 1-K items and only the semiannual 1-SA (rather than the quarterly 10-Q) and fewer events triggering Form 1-U (compared to Form 8-K). However, as I’ve mentioned in other Lawcasts, in order to maintain current information for purposes of Rule 144, some issuers elect to file quarterly information by filing a quarterly report using form 1-U during those periods in which they are not otherwise required to file an annual or semi-annual report. The annual Form 1-K must be filed within 120 calendar days of fiscal year-end. The semiannual Form 1-SA must be filed within 90 calendar days after the end of the semiannual period. The current report on Form 1-U must be filed within 4 business days of the triggering event. Successor issuers, such as following a merger, must continue to file the ongoing reports. The rules also provide for a suspension of reporting obligations for a Regulation A reporting company. Termination is accomplished by filing a Form 1-Z and requires that a company be current in its reporting up to that time, have fewer than 300 shareholders of record, and have no ongoing offers or sales in reliance on a Regulation A offering statement. Also as discussed in prior Lawcasts, a Tier 2 company that has used an S-1 format for its Form 1-A can file a Form 8-A concurrently with the qualification of its offering statement and become subject to the full Exchange Act reporting requirements. Also, a Regulation A reporting company may file a Form 10 which would make the company subject to the full SEC reporting requirements and terminate the lighter Regulation A reporting. Regulation A reports qualify as the type of information a market maker would need to support the filing of a 15c2-11 application. Accordingly, an issuer that completes a Tier 2 offering could proceed to engage a market maker to file a 15c2-11 application and trade on the OTC Markets.
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