Regulation A+ Financings
Regulation A, often referred to as Regulation A+, is a U.S. securities-law exemption that allows eligible U.S. and Canadian companies to conduct public offerings without using a fully registered offering. Regulation A has two tiers: Tier 1 permits offerings of up to $20 million in a 12-month period, while Tier 2 permits offerings of up to $75 million in a 12-month period.
Regulation A Offering Tiers
Tier 1
Tier 1 permits offerings of up to $20 million in a 12-month period. The offering must be qualified by the SEC and generally must also be registered or qualified, or rely on an exemption, in each state where securities are offered or sold. Tier 1 financial statements generally do not need to be audited unless the issuer has already prepared audited financial statements for another purpose.
Tier 2
Tier 2 permits offerings of up to $75 million in a 12-month period. Tier 2 offerings must be qualified by the SEC and are generally exempt from state securities-law registration and qualification requirements, although state notice filings, fees and antifraud authority may still apply. Tier 2 requires audited financial statements and ongoing SEC reporting. Non-accredited investors are subject to SEC investment limits unless an applicable exception applies.
Both tiers may be offered to accredited and non-accredited investors, subject to the applicable eligibility, disclosure and investment-limit requirements. Regulation A is available only to eligible companies organized in, and with their principal place of business in, the United States or Canada. Securities issued in a Tier 2 offering may qualify for a conditional exemption from Exchange Act Section 12(g) registration if the issuer satisfies the applicable SEC requirements.
For current regulatory requirements, see the SEC Regulation A guidance.
Regulation A permits eligible issuers to “test the waters” and solicit indications of interest from potential investors before or after filing the offering statement, subject to applicable SEC legends and filing requirements. Expressions of interest are non-binding and can help management assess potential investor demand before committing fully to an offering process.
Regulation A may be considered by eligible U.S. and Canadian issuers seeking a public exempt offering. Whether Tier 1 or Tier 2 is appropriate depends on factors such as the amount being raised, target investor base, state-law requirements, audit and reporting readiness, and the company’s distribution strategy.
ITB Solutions can assist management with Regulation A strategy, transaction planning, readiness and coordination of the professional team. Depending on the transaction, that team may include U.S. securities counsel, auditors, a transfer agent, a registered broker-dealer or other appropriate distribution platform. ITB acts as a management consultant and transaction coordinator and does not provide legal, audit or broker-dealer services.
Our services focus on the following:
- Developing a detailed Regulation A strategy and execution plan
- Preparing management and offering-summary materials for testing-the-waters and adviser discussions
- Planning investor communications and market-awareness strategy
- Identifying and coordinating with appropriate registered broker-dealers, platforms and other service providers
- Coordinating with appropriate U.S. securities counsel and auditors
- Planning post-offering public-market and exchange-listing strategy, where appropriate
Reach Us
We are located in the financial district of Toronto, ON. We work with many domestic companies but specialize in US and international companies.
Contact us:
1-647-500-0492