Insights

Washington – January 10, 2022: Crowell & Moring represented the founders of Aerial Armor in the sale of the company to Dedrone Holdings Inc., a leader in smart airport security.

Los Angeles, CA –March 28, 2022: The closing of Crowell & Moring client Firefly Aerospace’s $75 million Series B preferred equity issuance and the secondary sale of Noosphere Venture Partners’ equity in Firefly to AE Industrial Partners LLP (AEI) was announced. The transaction values Firefly above its May 2021 Series A valuation of more than $1 billion. These two transactions constitute a change of control of the company, as well as providing Firefly with the resources to deliver new innovations in space launch vehicles.

The Securities and Exchange Commission announced on August 23, 2023 that they have adopted new rules under the Investment Advisers Act of 1940 which call for greater transparency for investors who invest in private funds. While some of these rules will make investing with registered investment advisers clearer, others will make the world of venture capital a bit more challenging.

In its long-awaited decision in Slack Technologies, LLC v. Pirani, 598 U.S. ___, No. 20-200 (June 1, 2023), the Supreme Court ruled that the tracing requirement of Section 11 of the Securities Act of 1933 applies to suits brought by investors in direct listings. Although the ruling definitively resolves an ambiguity in the statutory text, it leaves the door open to adverse consequences for both companies and investors in direct listings.

The Securities and Exchange Commission announced on May 16, 2023 that ten microcap companies violated Regulation A+ and have been ordered to pay civil penalties ranging from $5,000 to $90,000. In a press release, Daniel R. Gregus, Director of the SEC’s Chicago Regional Office, stated, “Companies that choose to benefit from Regulation A as a cost-effective way to raise capital must meet its requirements. These actions stand as a reminder that companies which choose to circumvent Regulation A’s requirements by engaging in prohibited conduct or making fundamental changes to their offerings without qualification will face action by the SEC.”