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Merit Review

Analyze State Merit Review Issues in Minutes, Not Hours

12 minutes with CaseMark

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12 minutes with CaseMark

What you'll need

  • Offering Document
  • Cap Table
  • Charter Documents

SOC 2 Type II · HIPAA compliant · $5 free credit

Workflow

Overview

CaseMark's Merit Review Analysis skill automates the complex process of evaluating non-covered securities offerings against NASAA Statements of Policy used by state Blue Sky examiners. It produces comprehensive pre-filing risk assessments and examiner-ready comment response packages covering cheap stock, promoter equity investment, voting rights, and promoter compensation issues.

State merit review for non-covered securities offerings requires painstaking analysis of cap tables, charter documents, and compensation structures against multiple NASAA Statements of Policy. Securities attorneys spend hours manually calculating promoter equity ratios, identifying cheap stock issuances, reviewing voting rights structures, and drafting detailed responses to examiner comment letters — often under tight filing deadlines.

CaseMark automates the entire merit review analysis workflow, from initial risk assessment through examiner comment response drafting. The AI applies NASAA SOP standards to your offering documents and cap table, identifies compliance issues across all major review categories, and generates professionally formatted response packages with negotiation strategies — transforming days of manual work into a streamlined, repeatable process.

How it works

  1. 1. Upload your offering documents, cap table, charter documents, and any examiner correspondence

  2. 2. AI analyzes your offering against NASAA Statements of Policy for cheap stock, promoter equity, voting rights, and compensation issues

  3. 3. Review the generated risk assessment, compliance findings, and examiner-ready comment responses

  4. 4. Export your complete merit review analysis and response package in DOCX or PDF

What you get

  • Pre-Filing Risk Assessment Summary

  • Cheap Stock Analysis with Dilution Calculations

  • Promoter Equity Investment Test Results

  • Voting Rights and Control Structure Review

  • Promoter Compensation Breakdown

  • Examiner Comment Response Package

  • Negotiation Strategy with Fallback Positions

  • State-by-State Filing Pathway Analysis

What it handles

  • Cheap stock identification and dilution analysis under NASAA SOPs

  • Promoter equity investment testing against state benchmarks

  • Voting rights and control structure compliance review

  • Promoter compensation analysis across cash, equity, and related-party transactions

  • Examiner-ready comment response drafting with citation support

  • Negotiation strategy with fallback positions for each issue area

Required documents

  • Offering Document

    Form 1-A, prospectus, private placement memorandum, or offering circular for the securities offering

    .pdf, .docx

  • Cap Table

    Complete capitalization table showing all issuances with dates, prices, consideration type, vesting terms, and holder identity

    .pdf, .docx, .xlsx, .csv

  • Charter Documents

    Articles or certificate of incorporation, bylaws, and any amendments defining equity structure and voting rights

    .pdf, .docx

Supporting documents

  • Examiner Correspondence

    State examiner deficiency or comment letters requiring response

    .pdf, .docx

  • Promoter Compensation Schedule

    Details of all promoter compensation including cash, equity, consulting agreements, related-party contracts, and loans

    .pdf, .docx, .xlsx

  • Historical Financial Statements

    Balance sheets and financial records used for promoter equity investment calculations

    .pdf, .docx, .xlsx

  • Selling Compensation Agreements

    Underwriter or placement agent agreements, including warrant terms and commission structures

    .pdf, .docx

Why teams use it

Reduce hours of manual NASAA SOP research and cap table analysis to minutes with AI-powered compliance review

Generate professional comment response packages ready for state examiner submission with proper citations and supporting analysis

Identify merit review risks before filing to structure offerings that minimize conditioning and delays

Develop negotiation strategies with documented fallback positions for each issue area flagged by examiners

Questions

What types of offerings does this merit review analysis cover?

CaseMark's merit review analysis covers non-covered securities offerings subject to state-level review, including Reg A Tier 1 and Tier 2, Rule 504, intrastate offerings, and direct public offerings. It applies NASAA Statements of Policy standards used by state examiners across merit review jurisdictions.

Can this tool help me respond to state examiner comments?

Yes. CaseMark generates examiner-ready comment response packages with proper citations to NASAA SOPs and state-specific standards. It also provides negotiation strategies and fallback positions for each issue area, so you can efficiently address deficiency letters and conditioning requests.

How does the cheap stock analysis work?

CaseMark analyzes your cap table to identify shares issued for nominal cash, services, or below-market consideration within the relevant lookback period. It calculates dilution impact, flags promoter vs. non-promoter issuances, and benchmarks findings against NASAA cheap stock standards to anticipate examiner concerns.

What is the promoter equity investment test?

The promoter equity investment test evaluates whether promoters have contributed sufficient cash or tangible assets relative to their equity ownership. CaseMark applies the standard NASAA benchmark (typically 10% of offering proceeds) and identifies any shortfalls that could trigger examiner conditioning or comments.

Do I need to know which states are merit review states?

While familiarity with your target states is helpful, CaseMark applies NASAA SOP standards that form the baseline for merit review across jurisdictions. You simply provide your target state list, and the analysis identifies potential issues and filing pathway considerations for each state.

How accurate is the AI analysis compared to manual review?

CaseMark applies the same NASAA Statements of Policy frameworks that state examiners use, ensuring comprehensive coverage of cheap stock, promoter equity, voting rights, and compensation issues. The output is designed as a professional starting point that attorneys should review and customize before submission.

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