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SEC Suspends Studio’s Reg A+ Exemption Over CPA Snafu

One of the first companies to sell securities using Regulation A+ recently had its exemption temporarily suspended by the Securities and Exchange...

Written by Amit Singh · 1 min read >

One of the first companies to sell securities using Regulation A+ recently had its exemption temporarily suspended by the Securities and Exchange Commission, based on what the company described as an administrative error involving the qualifications of the CPA who audited its financial statements.

The SEC, in a Jan. 9 order, said Punch TV Studios falsely represented that its financial statements were audited. The Commission said it had agreed to accept a settlement offer from the television production company and ordered its exemption under Regulation A+ be suspended for nine months.

Inglewood, Calif.-based Punch TV was among the first companies to utilize Regulation A+, rules mandated by the 2012 JOBS Act that updated and expanded the existing Regulation A exemption from registration requirements of the Securities Act.

Regulation A+ allows companies to conduct a mini-public offering and raise up to $50 million, subject to certain requirements. Among other things, companies seeking to raise more than $20 million must submit to the SEC audited financial statements.

With its offering statement, Punch TV included the requisite financial statements and the Division of Corporate Finance issued a Notice of Qualification for the offering. However, according to the SEC, it was unaware at the time the financial statements in Punch TV’s offering statement were not audited.

The Commission said in April 2016 Punch TV’s CEO received a cease and desist letter from the accountant stating he was not a CPA and requesting Punch TV stop using his name in SEC filings. Shortly after, Punch TV filed a report with the SEC stating its board made “an administrative error concerning the qualifications of” the accountant and planned to correct its financials.

In early 2017, more than a year after being qualified, Punch TV submitted to the SEC revised audited financial statements which, according to the SEC, reflected that the value of Punch TV’s assets was reduced from $1.3 million in the original offering statement to just over $661,800.
The SEC claimed Punch TV of falsely represented that its financial statements were audited and failed to file timely a special financial report, an annual report and a semiannual report.

In a statement earlier last week, Punch TV said it fully cooperated with the SEC’s inquiry and did not expect the suspension to impact the studio’s operations or the potential value of its stock. Punch TV said it had no intentions of reopening the offering once the suspension was lifted.
 

One Reply to “SEC Suspends Studio’s Reg A+ Exemption Over CPA Snafu”

  1. ask Joseph Collins -josephcollins@punchtvstudios.com, Rachel Ramos -rachel@punchtvnetwork.com and Robert Lu – robertl@punchtvstudios.com. why representatives of Punch TV Studios forged my name, falsely stated I was a CPA, and used my name without permission in the SEC Filing for Punch TV. I also made a complaint in 2016 to Securities Transfer Corporation (469)633-0101, who was responsible in issuing stock certificates for Punch TV and stated the SEC filing was made on false pretenses. I was rebuffed by George Johnson – johnson@stctransfer.com and Kevin Halter, Jr. at STC. Current STC officers Chris Dobbins – dobbins@stctransfer.com and Matthew Smith – smith@stctransfer.com have currently been made aware of the situation. Koreconx, the current transfer agent responsible for Punch TV stock certificates, who is located in Toronto, Canada, has also been made aware as well. There is a large court judgement against Urban Television Network Corporation ( URBT) from Wester Satellite Servcs in Dallas County, Texas.
    Then, a current filing by Joseph Collins of Punch TV on the SEC website shows since 8/31/2017, Punch TV has lost over $4 million dollars and cash at 8/31/2017 was $1.2 million to only $176,889 on 2/28/2018. What has happened to the Punch TV investors money? I made a complaint to the SEC to stop this filing in 2016 and a complaint was also made to the United States Department of Justice in 2016. The SEC order on January 9, 2018, was a result of my original complaint. Investors need to ask Punch TV and Joseph Collins questions. Please share with other investors.
    https://www.sec.gov/Archives/edgar/data/1651699/000165169918000022/ptvsamenedsa1.htm

    You can contact me at DRL1970@aol.com or 251-455-1168.

    Daniel R. Leonard

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