CHAPTER 13Other IPO Alternatives
The securities laws permit a number of other methods for going public. Currently, however, none of these is in wide use, and a number of states prohibit some of the techniques discussed ahead.
Going public through Rule 504, an intrastate offering, or through Regulation S is technically legal. As discussed ahead, despite a recent encouraging change, Rule 504 is prohibited in most states, it can be difficult to properly use an intrastate exemption even with some recent rule amendments, and the wild days of Regulation S have been tamed by regulatory reform. Nevertheless, a full account of these techniques is provided in order to understand the context in which they exist alongside Regulation A+, reverse mergers, special purpose acquisition companies (SPACs), and self‐filings.
Interestingly, in my reverse merger books, old Regulation A was included with this group as an alternative that was not much used. It turns out I may have been a bit prescient in my 2009 second edition when I said, “I have been hearing for a number of years that a potential overhaul of Regulation A is in the works, but no change seems imminent. There was talk, for example, about increasing the amount allowed to be raised.” It was about a year later that I took that idea and presented it to the 2010 Conference.
In my prior book, I also described some of the challenges in making old Reg A successful, noting,
In part because of its reduced disclosure, both at the time of the ...