Regulation A & Regulation A+ Offerings

REG A & REG A+ Offerings

Borer Financial has Extensive Experience with Regulation A and Regulation A+ Offerings

Regulation A is an exemption from registration requirements that apply to public offerings of securities that do not exceed $5 million in any one-year period. Reg A offerings make access to capital possible for small and medium-sized companies that could not otherwise bear the costs of a normal SEC registration and to allow non-accredited investors to participate in the offering.

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Regulation A+ is for companies that are looking to raise a significant amount of money but do not want to go the venture capital route and are not ready to go the IPO route. Title IV of the JOBS Act allows companies to raise money and offer shares to the general public and not just accredited investors.

If the company believes that they can successfully raise money, they will then need to file their offering document and audited financial statements with the SEC for review and qualification. Once the company has qualified and received approval from the SEC, it can then go out and sell the shares that have been qualified by the SEC to the individuals that expressed interest, as well as others. The individuals that receive the shares receive freely tradable shares.

The fees associated with a Reg A+ offering are much lower than a traditional IPO and the ongoing disclosure requirements are much less burdensome.

Borer Financial will Assist You with the Filing of all Documents

Regarding Regulation A and Regulation A+ Offerings

Regulation A has Two Tiers

Tier 1

A company is permitted to offer a maximum of $20 million in any one-year period. The issuing company must provide an offering circular, which must be filed with the SEC and is subject to a vetting process by the commission and securities regulators in the individual states relevant to the offering

Companies issuing offerings under Tier 1 are not required to produce reports continually; they are only required to issue a report on the final status of the offering

Tier 2

A company is permitted to offer a maximum of $50 million in any one-year period. While an offering circular is required and is subject to review and vetting by the SEC, it does not need to be qualified by any state securities regulators

Companies offering securities under Tier 2 must include audited financial statements

For offerings of up to $20 million, companies can elect to proceed under the requirements for either Tier 1 or Tier 2.

The advantages offered by Reg A offerings are more streamlined financial statements without audit obligations, three possible format choices to use to arrange the offering circular and no requirement to provide reports until the company has more than 500 shareholders and $10 million in assets.

The Following are Documents that are Required to be Filed with the SEC

  • A Regulation A Offering Statement is required to be filed with the SEC utilizing a Form 1-A
  • A post-qualification amendment to a Form 1-A Offering Statement is required to be filed with the SEC utilizing a Form 1A-POS
  • An annual report pursuant to Regulation A is required to be filed utilizing a Form 1-K
  • A semiannual report pursuant to Regulation A is required to be filed utilizing a Form 1-SA
  • A current report pursuant to Regulation A is required to be filed utilizing a Form 1-U
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