On June 23, the Securities and Exchange Commission’s Division of Corporation Finance issued new Compliance and Disclosure Interpretations (C&DIs) relating to the recently expanded Regulation A, commonly referred to as “Regulation A+”. Regulation A+, which was promulgated under the Jumpstart Our Business Startups Act (JOBS Act), permits eligible issuers to offer up to $50 million of their securities within any 12-month period in quasi-public offerings. As noted earlier Regulation A+ became effective on June 19.

Among other things, the new C&DIs addressed the following issues:

• C&DI 182.03 clarifies that an issuer whose business primarily involves managing operations located outside of the United States will still be considered to have its principal place of business in the United States or Canada if its officers, partners or managers primarily direct, control and coordinate the issuer’s activities from the United States or Canada. Regulation A is only available to issuers with a principal place of business in the United States or Canada, subject to certain limitations.

• C&DIs 182.04, 182.05 and 182.06 provide that Regulation A is available to an issuer that (1) was formerly required to file reports under the Securities Exchange Act of 1934, as amended (Exchange Act), (2) is currently a voluntary filer under the Exchange Act or (3) is a wholly owned subsidiary of an Exchange Act reporting company parent, provided the parent is not acting as a guarantor or co-issuer of the securities. Regulation A is not available to issuers that are required to be reporting companies under the Exchange Act.

• C&DI 182.07 provides that Regulation A may be utilized in merger and acquisition transactions other than business acquisition shelf transactions.

• C&DI 182.08 provides that a newly created entity may utilize its inception date as its balance sheet date so long as the inception date is within nine months before the date of filing or qualification, and the date of filing or qualification is not more than three months after such entity reaches its first annual balance sheet date. To the extent that an issuer uses its inception date as its balance sheet date, statements of comprehensive income, cash flows and changes in stockholders’ equity will not be applicable.

• C&DI 182.09 provides that an issuer may solicit interest in a Regulation A offering on an electronic platform that limits the number of characters or amount of text that may be included without the information required by Rule 255 under the Securities Act of 1933, as amended, so long as (1) the communication is distributed through a platform that has technological limitations on the number of characters or amount of text that may be included in the communication, (2) including the required statements in their entirety, together with the other information, would cause the communication to exceed the limit on the number of characters or amount of text and (3) the communication contains an active hyperlink to the required statements that otherwise satisfy Rule 255 and, where possible, prominently conveys that important or required information is provided through the hyperlink.

C&DI 182.10 clarifies that although state securities (blue sky) law registration and qualification requirements are pre-empted in the case of primary offerings by the issuer or secondary offerings of securities by selling security holders in a Tier 2 Regulation A offering, the pre-emption does not apply to resales of securities purchased in a Tier 2 Regulation A offering.