Regulation A+ is an SEC mandated exemption to registration requirements for issuing securities.
The regulation exempts US and Canadian companies from filing reports under the Exchange Act to raise up to $50 million in a 12-month period. The updated Regulation A+ rules creates two tiers for securities offerings.
Tier 1 consists of securities offerings of up to $20 million in a 12-month period, with not 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.
For offerings up to $20 million, issuers can elect to proceed under Tier 1 or Tier 2. Both tiers are subject to basic requirements such as issuer eligibility, disclosure, and other matters. Both tiers would also allow companies to submit draft offering statements for non-public review by Commission staff before filing, permit the continued use of solicitation materials after filing the offering statement and require the electronic filing of offering materials to the SEC EDGAR system.
Tier 1 offerings will be subject to federal and state registration and qualification requirements. For more information on state specific requirements, please click here.
Tier 2 has additional requirements that do not apply to Tier 1 offerings. Companies under the Tier 2 exemption are subject to the following requirements:
- Provide audited financial statements
- File annual, semiannual and current event reports.
- Limitation on the amount of securities non-accredited investors can purchase in a Tier 2 offering of no more than 10 percent of the greater of the investor’s annual income or net worth.