SEC Permits SEC Reporting Companies to Use Reg A for Offerings

The SEC has just issued final rules to permit current SEC reporting companies to use Reg A to conduct offerings (link –

This “fixes” a perceived gap in the rules created when the Reg A rules were revised a few years ago.

Permitting SEC reporting companies to use Reg A has benefits:

1. This change enables those companies to take advantage of the streamlined Reg A offering statement and SEC review.

2. Using Reg A offering rules enables issuers to “test the waters” of investor interest and broaden the marketing effort by reaching out directly to potentially interested investors.

Some benefits may not be as valuable, for example, a company using a Reg A offering may avail itself of the lighter SEC reporting requirements. While this would seem to be a boon to companies to save costs, Boustead has found that investors generally prefer companies which are trading on NASDAQ or one of the exchanges, which require conventional (more frequent) SEC reporting anyway.

Also, not all reporting companies may choose to use Reg A for offerings. For example, companies which are able to use SEC’s S-3 registration, which permits incorporation by reference to other SEC filings, may choose to continue to benefit from that feature and decline the opportunity to use Reg A.

We believe this change is a positive step in reducing unintended “gaps” and is likely to benefit a number of companies.

To discuss your capital market goals, please contact me (

Opinions expressed in these posts and pages are mine and do not represent the opinion of Boustead USA LLC.

Reg A+ IPO – Learning Curve – Podcast

Dennis McCarthy – – (213) 222-8260

[Mara 1:]  Welcome, I’m Mara Schmid, CEO of reAgency Marketing.  Today, we’re going to be discussing the Reg A+ IPO, a new way for private companies to go public.

Our guest today is Dennis McCarthy, a Managing Director with Boustead Securities, which has successfully completed Reg A+ IPOs.  Welcome, Dennis.

[Dennis 1:] Thank you, Mara.

[Mara 2:] We’re here to talk about Reg A+ IPO because it’s a new way for private companies to go public but it’s still relatively unknown.  Give us a little history on Reg A+ IPOs and Boustead’s experience.

[Dennis 2:] Yes, Reg A+ is new.  The very first Reg A+ offering was completed in March 2016.  It wasn’t a Boustead deal but it raised approximately $17 million for a vehicle development company.

Since then, Boustead has been watching and learning from the experience of early deals, what’s worked well or not, in our opinion.

In June 2017, Boustead led a syndicate in raising approximately $14 million for Adomani, an electric vehicle company which was the first Reg A+ IPO to be listed on NASDAQ.

Then in January 2018, Boustead led a syndicate in raising approximately C$10 million for True Leaf, which sells pet food supplements.  True Leaf was the first Canadian-listed company to complete a Reg A+ offering in the US.

Boustead also has a couple other Reg A+ offerings in progress.  Several of these offerings are for real estate businesses which are aimed to give investors a consistent cash dividend.

[Mara 3:] When we were talking before we went on the air, you mentioned that Boustead, and for that matter, much of Wall Street, are on a steep learning curve on Reg A+ offerings.  Would you elaborate?

[Dennis 3:] Yes, certainly.

[Mara 4:] You mentioned a couple topics, like offering marketing.

  1. Offering Marketing

[Dennis 4:] Yes, unlike a traditional S-1 offering, a Reg A+ offering can use a wide range of marketing techniques, email, social media ads, broadcast, influencers, etc.

Boustead and its media partners work with our clients to actively spread the word of the offering.

We try to use client’s resources whenever possible but we’ve also developed resources specifically for these Reg A+ offerings and we get a good response.

[Mara 5:]  Next, you said companies need support from current shareholders.

  1. Support from Friends of the Company

[Dennis 5:] It’s no surprise that new investors want to see that current investors and other friends of the company put the first money into an offering.  With support from friends of the company, new investors seem more comfortable participating in the offering.

[Mara 6:] What about listing on NASDAQ or the NYSE?

  1. Listing on NASDAQ or NYSE

[Dennis 6:] We’ve found that investors prefer offerings where the company has obtained a conditional listing from NASDAQ or the NYSE.

With the conditional listing, investors know that a company has to meet the listing requirements including the threshold share price and market value.

Also, brokerage firms are more likely to take the company’s stock into a brokerage account if the shares are on NASDAQ or the NYSE which generally makes that process easier and faster for an investor.

[Mara 7:] Then there’s your FlashFunders platform?

  1. FlashFunders Platform

[Dennis 7:] Boustead realized the value of a partner which would enable Boustead to offer a seamless marketing and offering paperwork process.  Boustead merged with FlashFunders under one umbrella organization.

A Reg A+ offering has a number of elements so having most of them under one organization increases coordination.

[Mara 8:] Thank you for these insights.  Tell us if someone has questions or wants to discuss a Reg A+ offering further, how can they learn more?

[Dennis 8:]  We’re happy to answer questions. I’ll post several contact emails of the Boustead team that can help.

Dan McClory –

Keith Moore –

Robert Maley –

Dennis McCarthy –

Leveling the IPO Playing Field

Leveling the IPO Playing Field

The Securities and Exchange Commission (SEC) is considering permitting private companies of all sizes to confidentially “test the waters” with potential investors before embarking on the initial public offering (IPO) process, according to The Wall Street Journal (link).

This is not a surprise given the other signs that the SEC appears to be trying to level the procedural playing field among companies using different forms of registration.

For example, the SEC announced last June that it permits companies of all sizes to use confidential filing, not just those companies which are subject to the new JOBS Act rules (Click to read article).

Boustead has found, in conversations with the SEC about specific offerings, that the SEC is attuned to the advantages afforded companies using the new forms of registration.

“While the rules are still the rules, we’ve seen an effort by the SEC to work with our clients to reduce some of the differences between forms of SEC registration, where possible.” said Keith Moore, CEO and Founder of Boustead Securities, LLC. a broker-dealer working with clients using Reg A+ and traditional forms of SEC registration.

Given this trend, the rules currently available to companies using the new JOBS Act rules, such as Regulation A, dubbed Reg A+, may eventually be afforded to companies using other forms of SEC registration.

Until then, a private company contemplating an IPO should at least consider using Reg A+ among its options.

For more on Boustead’s experience using Reg A+ for IPOs, click here.