Updating continuous offerings under Regulation A

We’ve had this question come up a couple of times in recent deals, so it’s worth flagging. Under Regulation A, you can have offering statements in effect (and thus offerings open) for more than a year (they can even last three years under certain circumstances). However, if your continuous offering is going to last more than a year, at least once a year you have to file a post-qualification amendment (PQA) to “refresh” the offering statement. This is required by Rule 252(f)(2)(i), which says:
Post-qualification amendments must be filed in the following circumstances for ongoing offerings:
(i) At least every 12 months after the qualification date to include the financial statements that would be required by Form 1-A as of such date. . .
Note that word “must” there.
More than once recently, we’ve had issuers or their counsel try to make the case that they don’t need to file a PQA because they are up to date on Regulation A’s ongoing reporting requirements (annual 1-K and semi-annual 1-SA) and therefore all that information is available to investors on EDGAR, should they choose to look for it. This isn’t actually the case:
One of the reasons to have a PQA is so that the SEC Staff has a chance to review an open offering that is extending beyond a year. Sure, they have the ability to review 1-Ks and 1-SAs, but filing the PQA alerts the Staff that there is an ongoing offering.
If you have a qualified Reg A offering, you have offering circular delivery requirements. Just delivering the old OC is not sufficient under these circumstances; you need to include all the filings, which can get complicated when communicating on social media.
“Must” means “must.”
You cannot continue to make sales under an offering statement for which a PQA should have been filed but was not.
As a side note, there are rules as to whether you can continue offers and sales during the PQA review period. Take a look at Securities Act C&DI 139.28, which we understand applies equally to Reg A.