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Regulation A and Going Public

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Regulation A and Going Public

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  1. The Regulation A+ Offering Exemption Regulation A+ & Going Public Regulation A+ Tier 1 & Tier 2 Offerings provide unique exemptions designed to fit the needs of your small business.

  2. Regulation A+Tiers Regulation A+ implements Title IV of the JOBS Act and provide for two tiers of offerings: • Tier 1 consists of securities offerings of up to $20 million in a 12-month period, with no more than $6 million in offers by selling security-holders that are affiliates of the issuer. • Tier 2 consists of securities offerings of up to $50 million in a 12-month period, with no more than $15 million in offers by selling security-holders that are affiliates of the issuer. Find More Information About Regulation A+ Tiers Here

  3. Who is eligible to use Regulation A+? Regulation A+ is limited to companies organized in and with their principal place of business in the United States or Canada.  The exemption is not be available to companies that: • Are already SEC reporting companies and certain investment companies; • Have no specific business plan or purpose or have indicated that their business plan is to engage in a merger or acquisition (including a reverse merger) with an unidentified company; • Are seeking to offer and sell asset-backed securities or fractional undivided interests in oil, gas or other mineral rights; • Have been subject to any order of the Securities & Exchange Commission under Exchange Act Section 12(j) entered within the past five years; • Have not filed ongoing reports required by the rules during the preceding two years; and • Are disqualified under the “bad actor” disqualification rules.

  4. SEC Reporting & Regulation A+ • Companies that conduct a Regulation A offering must file a Form 2-A with the SEC every 6 months to report sales in the offering, and submit a final filing to the SEC within 30 days after the offering is complete.   • Issuers in Regulation A, Tier 1 offerings must file a Form 1-Z within 30 days after heoffering is completed or terminated. Issuers conducting Regulation A, Tier 2 offering must report the same information on Form 1-Z or, depending on when the offering is terminated, in their annual report on Form 1-K. • All Regulation A+ filings must be made through the SEC’s EDGAR database.

  5. Regulation A+ Tier 2 Reporting • In addition to the basic reporting requirements applicable to both Tier 1 and Tier 2 Regulation A+ offerings, companies conducting Tier 2 offerings are subject to other SEC reporting requirements, including: • A requirement to provide audited financial statements. • A requirement to file annual, semiannual, and current event reports. Issuers in Regulation A, Tier 2 offerings become subject to ongoing SEC reporting obligations which include: (i) annual reports on new Form 1-K; (ii) semiannual reports on new Form 1-SA; (iii) current information reports on the new Form 1-U; and (iv) depending on the financial statements included in the Form 1-A and the timing, special financial reports on new Forms 1-K and 1-SA are required for certain gaps in financial reporting periods.

  6. Blue Sky Laws & Regulation A+ • Regulation A+ preempts state registration and qualification requirements for offerings to “qualified purchasers,” in Tier 2 offerings. • Regulation A+ Tier 1 offeringsare subject to state registration and qualification requirements. • NASAA’s coordinated review program will apply only to Tier 1 offerings. NASAA’s coordinated review process for Regulation A offerings streamlines multi-state review protocols for Regulation A offerings. NASAA’s review process, eases costs and other regulatory burdens on small companies seeking to raise capital while implementing protections for investors. Presently, 48 states and territories have agreed to participate in NASAA’s coordinated review process.

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