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:
Contact M2 to ask us about your SEC Regulation A+ filing on Form 1-A
|Reg A — Tier 1||Reg A — Tier 2|
|Investor Types||All, including non-accredited investors||All, including non-accredited investors|
|Individual Investment Limits||None||Unaccredited investors: The greater of 10% of their income or 1096 of their net worth; Entitles: 1096 of revenue or net assets; Accredited Investors: Unlimited|
|Offering Documents||SEC Review and State Review||SEC Review|
|State Pre-emption||No; Coordinated State Review||Yes|
|Financial Disclosures||Reviewed Financials (certain states might require audits)||Audited Financials|
|Ongoing Disclosures||No Ongoing Public Financial Reporting||Annual and Semi-Annual Public Reporting including Audits|
|Ability to Terminate Ongoing Reporting Requirements||N/A||Less than 300 holders of Reg A+ stock|