Regulation A+
Regulation A+ expands existingRegulation A. Existing
Regulation A providesan existing exemption from registration
for smaller issuers of securities. Regulation A+ offerings can
be used in combination withdirect public offeringsand
initial public offeringsas part of a Going Public Transaction.
Regulation A+ simplifies the process of obtaining the
seed stockholdersrequired
by
the
Financial
Industry
Regulatory
Authority
while
allowing
the
issuer
to
raise initial capital.
What SEC
Periodic Reporting Obligations
Imposed Apply To Tier 2 Issuers?
Tier 2 issuers becomes subject to Regulation A reporting obligations if
certain conditions are met.
These include: (i) that the securities of each class covered by the Form
1-Aoffering statement be held of record by less than 300 persons
(1,200 persons for banks and bank holding companies), (ii) offers and
sales under the Form 1-Aofferingstatement are not ongoing, and (iii)
the issuer has complied with its ongoing reporting obligations.
Do My Financial Statements
Have To Be Audited?
For Tier 1 Regulation A+ offerings, no audit is required. For
Tier 2 offerings, Audited Annual Financial Statements must be
provided by the Companys independent auditor. Note the
auditor does not have to registered with the Public Company
Accounting Oversight Board.
Do I Have To Register My
Regulation A+ Offering With
State Regulators?
Regulation A+also provides for the preemption of state securities
law registration statement requirements and qualification
requirements for securities offered or sold to qualified
purchasers in Tier 2 offerings.Tier 1 offerings will be subject to
federal and state registration and qualification requirements, and
issuers may take advantage of the coordinated review program of
the North American Securities Administrators Association
(NASAA). Companies should remember that states retain authority
to:
require the filing of any documents filed with the SEC for notice
purposes and payment of fees;
enforce filing and fee requirements by suspending offerings
within a given state; and
investigate and bring enforcement actions with respect to
fraudulent securities offerings.