Can New Reg A Crowdfinanced Offerings Salvage the Small Cap IPO?

Although there hasn’t been as much attention drawn to Title IV of the JOBS Act, raising the Reg A threshold to $50M and exempting Reg A offerings from

state blue sky laws can potentially transform the small cap equity markets - particularly in conjunction with a viable venture exchange and crowd-

investing principles.

Join us for this timely and informative webinar as key sponsor of the JOBS Act, Congressman Patrick McHenry as well as industry influencers: David N.

Feldman and Samuel S. Guzik of Richardson Patel LLP illustrate how Reg A can play a critical role in facilitating capital formation.

Key discussion points will include:

Can Reg A Crowdfinanced Offerings replace the conventional small cap IPO?

Examining Tier 1 and Tier 2 Reg A offerings

Exempting Reg A from state blue sky laws

Reg A Crowdfinance versus Title III Crowdfinance

Is a JOBS Act 2.0 in our imminent future?

Moderated by: Dara Albright of NowStreet Wire

Samuel GuzikRichardson Patel LLP

Rep Patrick McHenryU.S. Congressman

Reviving Capital Formation with Reg A Crowdfunding

David FeldmanRichardson Patel LLP

Regulation A+ Proposal:Making the Grade?

David N. Feldman, Esq., PartnerRichardson & Patel LLP

NowStreet Wire WebinarMarch 13, 2014

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Topics

• Existing Regulation A

• JOBS Act Changes – Regulation A+

• New Proposed SEC Rules

• Possible Comments and Changes

• Summary of Benefits vs. S-1

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Existing Regulation A

• Simplified public offering, general solicitation permitted

• $5 million limit per year

• Full state “blue sky” merit review

• No audit required

• Can “test the waters” prior to offering

• No regular SEC reporting after offering

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Existing Regulation A (continued)

• Up to $1.5 million in resale to be offered

• Paper filings

• Only US and Canadian companies

• Reduced disclosure in offering statement –Q&A or narrative format

• Virtually no issuers utilized

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JOBS Act Changes

• Jumpstart Our Business Startups (JOBS) Act directed SEC to effect changes to Regulation A to enhance attractiveness and protection

• Maximum offering to be increased to $50 million

• State blue sky review preempted if sold to “qualified purchasers”

• SEC can require audit, some reporting

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New Proposed SEC Rules

• Two tiers: Tier I up to $5 million and Tier II anything up to $50 million in 12 months

• Test the waters expanded to pre- and post-filing of offering statement

• Filings can be confidential until 21 days before SEC approval

• Tier II Offerings blue sky exempt for all investors

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New Proposed SEC Rules (cont’d 1)

• Audited financials required in Tier II, but Canadian can use IFRS

• Post-offering reporting after Tier II: six month and annual reports plus current reports, no insider, proxy or tender offer filings

• Up to $15 million in resale securities in Tier II

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New Proposed SEC Rules (cont’d 2)

• No more than 10% of income or net worth can be invested

• Only narrative disclosure format or S-1

• Shelf offering possible for up to two years

• Still otherwise non-reporting, US/Canada

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Possible Comments and Changes

• Simple method to become reporting (8-A)

• No investment limit for accrediteds, or no limits at all

• Allow shell companies and SPACs

• Allow foreign companies and IFRS

• Reconsider $50MM limit

• No blue sky for public resale

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Summary of Benefits vs. S-1

• Test waters with any investor

• Blue sky exempt

• Reduced offering disclosure

• Less post-offering reporting than ‘34 Act – no insider or proxy filings

• Confidential filing during road shows

• Trade on OTCQX if qualified

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Questions?

David N. Feldman, Esq.

Richardson & Patel LLP

The Chrysler Building

405 Lexington Ave., 49th Floor

New York, NY 10174

dfeldman@richardsonpatel.com

www.richardsonpatel.com

www.DavidFeldmanBlog.com

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Congressman Patrick McHenry10th District of North Carolina

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http://mchenry.house.gov/

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Take Action!

Contact your local congressman: http://www.house.gov/representatives/find/

To contact the SEC go to www.sec.gov or send letters to:

The Honorable Mary Jo White U.S. Securities & Exchange Commission

100 F. Street, NE Washington, D.C. 20549

RE: Rulemaking Under Title IV of the JOBS Act (Regulation A+)

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The Webinar Sequel - May 20, 2014 at 1pm EST

“Creating Liquid Secondary Markets for Crowdfinance and Newly Public Small Caps”

https://www.brighttalk.com/webcast/9407/105697

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David FeldmanRichardson Patel LLP

Sam GuzikRichardson Patel LLP

David WeildChairman of IssuWorks

Former Vice Chairman of NASDAQ