Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
September 28, 2014
Office of Chief Counsel
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F S...
It is my belief the Commission cannot prohibit me, my co-founders nor my company from soliciting
the general public seekin...
Upcoming SlideShare
Loading in …5
×

SEC No Action Letter Request

518 views

Published on

My September 28, 2014 No Action Letter Request sent to the Securities and Exchange Commission.

Published in: Investor Relations
  • Be the first to comment

SEC No Action Letter Request

  1. 1. September 28, 2014 Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Via Web: https://www.sec.gov/forms/corp_fin_noaction REQUEST FOR “NO ACTION” LETTER Re: 1933 Securities Act, Section 2(a)(3) Definition of offer or sale of a security To Whom It May Concern: I am an individual. It is my understanding “An individual or entity who is not certain whether a particular product, service, or action would constitute a violation of the federal securities law may request a 'no-action' letter from the SEC staff.” Quoting from http://www.sec.gov/answers/noaction.htm I am writing to you today to request a No Action Letter confirming that my co-founders, my company and I possess the legal right to engage in pre-offering “testing the waters” communications, including the solicitation of “Expressions of Interest” (EOI) from members of the general public, in advance of the effective date of the Commission's final Rules pursuant to Title III and Title IV of the JOBS Act. My No Action Letter request does not reference Securities Act Section 5, as no “offer” of securities to the general public is being proposed prior to the date on which final JOBS Act Rules become effective. Your final Rulemaking pursuant to Title III of the JOBS Act will authorize me, my co-founders and my company to offer and sell unregistered securities to members of the general public on the condition that all “offers” and “sales” thereof occur by way of a registered “funding portal” and comply with the Commission's new Crowdfunding exemption, which will preempt state registration requirements. See: http://www.sec.gov/comments/s7-09-13/s70913.shtml http://www.gpo.gov/fdsys/pkg/FR-2013-11-05/pdf/2013-25355.pdf http://www.sec.gov/rules/proposed/2013/33-9470.pdf Your final Rulemaking pursuant to Title IV of the JOBS Act will authorize me, my co-founders and my company to offer and sell unregistered securities to members of the general public on the condition that such persons are “qualified purchasers” as defined by your final Rule. As the Commission is aware, you have proposed to define “qualified purchasers” to mean “all offerees of securities in a Regulation A offering and all purchasers in a Tier 2 offering” however the final Rule may define qualified purchaser more narrowly, so as to not permit sales to certain unsophisticated members of the general public. See: http://www.sec.gov/comments/s7-11-13/s71113.shtml http://www.gpo.gov/fdsys/pkg/FR-2014-01-23/pdf/2013-30508.pdf http://www.sec.gov/rules/proposed/2013/33-9497.pdf Under the current Code of Federal Regulations section 230.254, “solicitation of interest” documents or materials are permitted in advance of a planned Regulation A Offering, on condition that the so-called “testing the waters” solicitation materials are provided to the Commission not later than the time of first use, and they must contain a required legend or disclaimer as detailed in Section 230.254(b)(2). See: http://www.gpo.gov/fdsys/pkg/CFR-2001-title17-vol2/xml/CFR-2001-title17-vol2-sec230-254.xml P.O. Box 636, Kurtistown, HI 96760 Mobile +1.808.769.1147 http://www.foodbiome.com
  2. 2. It is my belief the Commission cannot prohibit me, my co-founders nor my company from soliciting the general public seeking “Expressions of Interest” (EOI) in advance of the effective date of the final JOBS Act Title III and Title IV Rules because, by definition, under Section 2(a)(3) of the Securities Act such EOI solicitations are not “offers” of any security. Although resembling “testing the waters” under Regulation A, the fact is that alternatives to Regulation A will be available soon under the JOBS Act. It does not appear to me, therefore, that the existing Section 230.254 CFR is applicable to JOBS Act EOI. I have reviewed the previously-issued No Action Letters under Section 2(a)(3) and it seems clear to me from this and my other analysis that the Commission should concur that there is in fact no “offer” of securities being made in the circumstance I am describing. My proposed actions should not prompt the Commission to recommend enforcement action against me, my co-founders or my company when we solicit “JOBS Act” EOI from members of the general public. Responses to pre-offer communications will merely enable us to follow-up with interested parties in the future, after the final JOBS Act Rules become effective, when “offers” of unregistered securities to non-Accredited investors are allowed. My proposed EOI communications are not Rule 135 notices of proposed registered offerings, because I do not intend to file a registration statement for my future Offerings. Rather, I plan only to receive EOI responses from members of the general public who wish to inform me that they might be interested in a future offer of my unregistered securities when my offers are permitted under the final JOBS Act Rules. My proposed EOI communications are also not, strictly-speaking, “testing the waters” communications as defined by current Code of Federal Regulations under Section 230.254, because those Regulation A “solicitation of interest” documents or materials apply only to a proposed Regulation A Offering. My company does not intend to conduct a Regulation A Offering, so “testing the waters” with “solicitation of interest” documents or materials pursuant to Section 230.254 would be inappropriate. Although it is possible that we will decide to conduct a Regulation A+ Offering under Title IV of the JOBS Act, my proposed EOI communications are not meant to commence the selling process for such an Offering. As the Commission is aware, under your present Regulation D Rule 506(c) there is no requirement of any kind for disclaimers or legends as would be required of “testing the waters” Regulation A activities. I am already authorized to publicize literally anything I wish, without even referencing Rule 506(c) and provided that I do not sell unregistered securities to non-Accredited investors my public “offers” under Rule 506(c) are explicitly allowed, subject to the normal anti-fraud provisions of federal and state law. I can already generally solicit and generally advertise my unregistered securities to receive contacts from people who are not Accredited investors, without violating Section 5 of the Securities Act and without being required to comply with Section 230.254. Absent a No Action Letter from your office, however, I must presume that non-Accredited contact information received in reply to my Rule 506(c) advertising efforts must be destroyed and thus I will need to start over anew with “testing the waters” communications or Title III-compliant “funding portal” advertising efforts later, after final JOBS Act Rules are in effect. It makes no sense for SEC to require me to ignore EOI from non-Accredited people. I do not wish to purge such contacts from my records if my Rule 506(c) general solicitation or general advertising attracts non-Accredited people. More specifically, I respectfully request a No Action Letter affirming my communications are not “offers” as defined by Section 2(a)(3) provided I use the words “JOBS Act” together with “Expressions of Interest” and provided I do not accept money if any is sent. Thank you for your prompt attention to my request. Emily Coombs Co-Founder of FoodBiome.com P.O. Box 636, Kurtistown, HI 96760 Mobile +1.808.769.1147 http://www.foodbiome.com

×