Regulation A would be a logical choice for smaller, non-exchange traded public companies, particularly for broadly disseminated public offerings of their shares to “uplist” to Nasdaq and for subscription rights offerings to their shareholders.
Special situations such as spin-offs and rights offerings offer alternative and potentially “cleaner” paths for micro- and small-cap issuers to become independent publicly traded companies.
Rights offerings have evolved into a transformative corporate transaction providing an opportunity to raise capital from existing shareholders first, then from the general public, via a streamlined registration on Form S-1 or shelf takedown with a built-in best efforts standby underwriting for outside investors.
Over the past few months, we have been increasingly asked by our corporate clients with pending IPO registration statements and by publicly traded companies with short-term funding needs to advise them on the spectrum of alternative sources of financing due to the current substantial volatility in stock trading and the resulting virtual standstill in their ability to access active public capital markets.