Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 254 -- Solicitation of Interest Document for Use Prior to an Offering Statement

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1. An issuer may publish or deliver to prospective purchasers a written document or make scripted radio or television broadcasts to determine whether there is any interest in a contemplated securities offering. Following submission of the written document or script of the broadcast to the Commission, as required by paragraph (b) of this section, oral communications with prospective investors and other broadcasts are permitted. The written documents, broadcasts and oral communications are each subject to the antifraud provisions of the federal securities laws. No solicitation or acceptance of money or other consideration, nor of any commitment, binding or otherwise, from any prospective investor is permitted. No sale may be made until qualification of the offering statement.
   
   
2. While not a condition to any exemption pursuant to this section:
   
   
   1. On or before the date of its first use, the issuer shall submit a copy of any written document or the script of any broadcast with the Commission's main office in Washington, D.C. (Attention: Office of Small Business Policy). The document or broadcast script shall either contain or be accompanied by the name and telephone number of a person able to answer questions about the document or the broadcast.
      
      Note: Only solicitation of interest material that contains substantive changes from or additions to previously submitted material needs to be submitted.
      
      
   2. The written document or script of the broadcast shall:
      
      
      1. state that no money or other consideration is being solicited, and if sent in response, will not be accepted;
         
         
      2. state that no sales of the securities will be made or commitment to purchase accepted until delivery of an offering circular that includes complete information about the issuer and the offering;
         
         
      3. state that an indication of interest made by a prospective investor involves no obligation or commitment of any kind; and
         
         
      4. identify the chief executive officer of the issuer and briefly and in general its business and products.
         
         
   3. Solicitations of interest pursuant to this provision may not be made after the filing of an offering statement.
      
      
   4. Sales may not be made until 20 calendar days after the last publication or delivery of the document or radio or television broadcast.
      
      
3. Any written document under this section may include a coupon, returnable to the issuer indicating interest in a potential offering, revealing the name, address and telephone number of the prospective investor.
   
   
4. Where an issuer has a bona fide change of intention and decides to register an offering after using the process permitted by this section without having filed the offering statement prescribed by Rule 252, the Regulation A exemption for offers made in reliance upon this section will not be subject to integration with the registered offering, if at least 30 calendar days have elapsed between the last solicitation of interest and the filing of the registration statement with the Commission, and all solicitation of interest documents have been submitted to the Commission. With respect to integration with other offerings, see Rule 251(c).
   
   
5. Written solicitation of interest materials submitted to the Commission and otherwise in compliance with this section shall not be deemed to be a prospectus as defined in section 2(a)(10) of the Securities Act.

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