📋 Tender Overview
The Securities and Exchange Commission announced charges against 10 microcap companies for offering and selling securities in unregistered offerings that failed to comply with Regulation A which provides a limited exemption from registration under the Securities Act to allow companies to raise money from the public as long as they meet specific requirements.According to the SECs orders between December 2019 and May 2022 each of the 10 microcap companies obtained qualification from the SEC for their securities offerings using Regulation A but they subsequently made one or more significant changes to their offerings without meeting the requirements of the exemption. The SECs orders found that such changes included improperly increasing the number of shares offered improperly increasing or decreasing the price of shares offered failing to file updated financial statements at least annually for ongoing offerings engaging in prohibited at the market offerings or engaging in prohibited delayed offerings. As a result each of the microcap companies offered and sold securities in violation of the offering registration provisions.Companies that choose to benefit from Regulation A as a cost-effective way to raise capital must meet its requirements said Daniel R. Gregus Director of the SECs Chicago Regional Office. These actions stand as a reminder that companies which choose to circumvent Regulation As requirements by engaging in prohibited conduct or making fundamental changes to their offerings without qualification will face action by the SEC.
