WRHambrecht Reviews Reg A+ Market & Challenges at ACSEC (Deck)

Robert L. Malin, Managing Director and Head of Equity Capital Markets at WR Hambrecht + Co, delivered a presentation today at a meeting of the SEC’s Advisory Committee on Small and Emerging Companies (ACSEC) on the emerging Reg A+ market.  Hambrecht is a broker dealer that has been fairly active in the Reg A+ space listing issuers. Hambrecht also makes a market in Elio Motors (OTCQX: ELIO) shares.

Malin shared their real-world experience in attempting to raise capital using Reg A+ and the affiliated challenges in dealing with a relatively new exemption.

Early on, Hambrecht attempted to raise capital for Aperion Biologics and subsequently list shares on NASDAQ.  Hambrecht “encountered institutional resistance due to lack of familiarity with Reg A+.” The fact Aperion attempted to raise capital only from smaller investors undermined their success.

Reviewing several additional case studies, Malin shared their experience in Allegiancy, BeautyKind, NewsBeatSocial, ShiftPixy. Each of these issuers unfortunately struggled or failed to meet their funding goals.

Hambrecht has learned that marketing spend is not a “panacea”, the crowd is fickle, and Broker Dealers are hesitant to participate.

Asked if FINRA is hostile to these deals, Malin said that many Broker-Dealers are fearful about FINRA scrutiny that may push them away.

WR Hambrecht’s early experience should benefit the entire sector as they learn how to better raise capital under Reg A+ and perhaps list shares on a public marketplace.



The presentation is embedded below.

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