Company Name: Coral Gold Corp.
Public Availability Date: 02-19-1991
INQUIRY LETTERSPENSLEY HORN JUBAS & LUBITZ
1880 CENTURY PART EAST, FIFTH FLOOR
LOS ANGELES, CALIFORNIA 90067
TELEPHONE(213) 553-5050 November 12, 1990 1933 Act/Regulation S
1934 Act/Rule 240.13a-16(b) Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549 Attn: William E. Morley, Esq.
Chief Counsel - Associate Director (Legal) Re: Regulation S; 1934 Act, Rule 240.13a-16(b) Gentlemen: This firm is presently advising a Canadian law firm regarding an anticipated
public offering of capital stock in Canada by Coral Gold Corporation, a Canadian
corporation ("Issuer") which seeks the category 1 safe harbor afforded by
Section 903 of Regulation S. The capital stock of Issuer is listed on the
Toronto and Vancouver Stock Exchanges and trades in the United States on the
NASDAQ system. The Issuer is a reporting company as a foreign private issuer
under the Securities Exchange Act of 1934 ("1934 Act"). STATEMENT OF FACTS In preparation for a Canadian public offering, Issuer is required by Canadian
law to prepare a Statement of Material Facts ("Circular") which would resemble
in contents and form a prospectus used in a registered public offering in the
United States. The Circular must be filed with the securities commission of each
Canadian province where the offering will be made. The various securities
commissioners give their comments and the Circular is revised and refiled with
the authorities at which time the securities commissions will allow the offering
to proceed. As a reporting company under the 1934 Act, Issuer, as a foreign private issuer,
is required by Rule 13a-16(b) to file under cover of a Form 6-K a copy of the
Circular with the Commission which becomes part of the public record. According
to Regulation S, there can be no "directed selling efforts" in the United States
as one of the conditions for the Issuer to come within the safe harbor afforded
by Section 903 of Regulation S. Section 902(b)(2) of Regulation S excludes as
"directed selling efforts" the placement of an advertisement in a publication
with general circulation in the United States which is required to be published
under either U.S. law or foreign law. Rule 13a-16(b) requires that any reports
or documents, such as the Circular, be filed promptly with the Commission upon
being filed with the Canadian authorities. QUESTION PRESENTED We are asking the Staff to concur in our opinion that based on the facts and
discussion presented, the filing of the Circular with the Commission pursuant to
Rule 13a-16(b) of the 1934 Act will not constitute "directed selling efforts" as
that term is defined in Section 902(b) of Regulation S and the term
"advertisement" would include the "Circular" provided (i) it contains no more
information than legally required, (ii) the Circular would contain the legend
required by Section 902(b)(2), and the only publication in the United States
will be the act of filing with the Commission and making the Circular part of
the public record. DISCUSSION It appears that the Commission in adopting Section 904(b) of Regulation S
contemplated filings that may be required by either U.S. law or foreign law. In
this regard, the rule specifically states that "advertisements" so required to
be published by law be not deemed a "directed selling effort" under Section
902(b) provided the advertisement contains no more information than is legally
required and includes a statement to the effect that the securities have not
been registered under the 1933 Act and may not be sold in the United States. It would follow that if a foreign issuer is required to file its offering
circular with governmental authorities in its home country and being a reporting
company under the 1934 Act is required by U.S. law to file copies with the
Commission, the Circular, provided it contains no more information that is
legally required by its foreign country law and a statement printed on the cover
page containing the information set forth below, would not constitute "directed
selling efforts" as defined in Section 902(b) of Regulation S. The Circular to be filed with the Securities Commission by Issuer in Canada is
not an advertisement to be published but a prospectus describing the offering.
According to the Commission's Rule 13a-16(b) under the 1934 Act, this Circular
must be filed with the Commission. The filing of the Circular makes the document
public and may be deemed a directed selling effort. The key words in Rule
902(b)(2) that excludes advertisements from being "directed selling efforts"
when published in the U.S. is the "legal requirement" of U.S. law or foreign
law. In the case of the Circular, it is legally required by Canadian law to be
filed with Canadian authorities and as a reporting company it is required to be
filed with the Commission and thus become public. In order to comply with Rule
13a-16(b) of the 1934 Act and to come within the provisions of Rule 902(b)(2),
we propose to place the following legend on the cover page of the Circular when
filed with the Commission. "These securities have not been registered under the Securities Act of 1933, as
amended ("Act") and may not be offered or sold in the United States or to U.S.
persons (other than distributors) unless the securities are registered under the
Act, or any exemption from the registration requirements of the Act is
available." For the reasons expressed, we would appreciate the concurrence of the Staff with
our opinion set forth under "Question Presented" above. Very truly yours, Morton R. Field STAFF REPLY LETTERFebruary 19, 1991 RESPONSE OF THE OFFICE OF INTERNATIONAL CORPORATE FINANCE
DIVISION OF CORPORATION FINANCE Re: Coral Gold Corporation
Incoming letter dated November 12, 1990 This is in response to your letter dated November 12, 1990 in which you sought
the concurrence of the staff of the Division of Corporation Finance with your
conclusion that the filing with the Commission of an offering circular under
cover of Form 6-K pursuant to Rule 13a-16(b) of the Securities Exchange Act of
1934, which contains no more information than is legally required by the laws of
the foreign issuer's jurisdiction, would not constitute "directed selling
efforts" for purposes of Rule 902(b) of Regulation S. The filing of the offering circular with the Commission under the circumstances
and in the manner set forth in your letter would not constitute "directed
selling efforts" for purposes of Rule 902(b) of Regulation S. Because this
letter is based upon the representations made in your letter, it should be noted
that any different facts or conditions might require a different conclusion. Sincerely, Sandra E. Folsom
Attorney Fellow, Office
of International
Corporate Finance
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