regulation a - insignificant deviations

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Reg A – Insignificant Deviations


Certain insignificant deviations from a term, condition or

requirement of Reg A will not result in the issuer’s loss of the

exemption

However, certain

provisions of Regulation A are deemed to

be significant to the offering as a

whole


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Any deviations from these significant provisions result in the

issuer’s loss of the exemption

These provisions

cover (1) issuer eligibility, (2) offering limits, (3) offers, and (4) continuous

or delayed offerings

A failure to

comply with a term, condition or requirement

of Regulation A

will not result in

the loss of the exemption for

any offer or sale to a particular individual or

entity,

if the person relying on the

exemption establishes that:


(1) The failure to comply did not pertain to a term, condition or requirement directly intended to protect that particular individual or entity;


(2) The failure to comply was insignificant with respect to the

offering as a whole,


provided that any failure to comply with the offering limitations, issuer eligibility criteria, or requirements for offers or continuous or delayed

offerings will be deemed to be significant to the offering as a

whole; and


(3) A good faith and reasonable attempt was made to comply with

all applicable terms, conditions and requirements of Regulation A.

This allows for certain errors that can occur while

clearly delineating those provisions from which an issuer may not deviate

while clearly

delineating those provisions from which an issuer may not

deviate.

Whether a deviation would be

significant to the offering as a whole

depends on the facts and

circumstances related to the

offering and the deviation

In certain situations, such as pre -

qualification sales, it may be hard to

establish a good faith attempt at compliance


Want to know more? – email me at John.Lux@ Securities-Law.info

(240) 200-4529

John E. Lux was in

the top 5% of authors on

Slideshare in 2014 and has been

quoted by Bloomberg as an expert on reverse

mergers


This is part of a series on Regulation A, so be sure to subscribe here and to learn

more, go to www. TheSecuritiesAttorneys.com

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“How to Go Public”

Disclaimer

This is not legal or investment advice of any kind

Seek competent advice from qualified attorneys and investment bankers

Your situation may vary

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regulation a - insignificant deviations

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offering limitations

requirement of regulation

requirements of regulation

issuers loss

certain situations

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issuer eligibility criteria