Regulation A

We are one of the companies with the most extensive track record in Regulation A offerings.

Regulation A is widely used in the sale of fractional ownership of all kinds of “things,” including artwork, automobiles, racehorses, real estate, watches, and collectibles. It is also popular for registering digital securities such as tokens and NFTs.

Regulation A can be used for initial public offerings (IPOs) on domestic exchanges and direct listings on over-the-counter markets. This applies not only to existing listed companies but also to additional offerings from unlisted companies.

Tier 1 Regulation A Offering

• Companies can raise up to $20 million in funding over 12 months.
• In reality, few companies have raised more than millions of dollars in funding.
• It does not take precedence over state laws.
• Usually valid for offerings limited to one or more states, or limited to a few states.
• No need for audited financial statements or ongoing reporting to the SEC.
• However, many states conduct merit reviews and may require audited financial statements.

Tier 2 Regulation A Offering

• By submitting a prospectus to the SEC, it can raise up to $75 million in 12 months.
• Priority over the state’s Blue Sky Act.
• Cost-effective.
• Can be disclosed in Form 1-A or traditional Form S-1 format.
• Form S-1 is a prerequisite for filing Form 8-A for registration with the Securities and Exchange Act.

Preliminary Screening

Rule A allows for a pre-qualification screening (“pre-screening”) to demonstrate interest in recruitment. Companies may use solicitation materials for pre-screening before and after submitting Form 1-A registration statements.

• If you want to issue documents after submitting Form 1-A, a link to Form 1-A is required.

Pre-certification materials must clearly state the following:

• No monetary or compensation solicitations are conducted.
• Applications to purchase securities will not be accepted before qualification certification.
• Applications can be withdrawn.
• Expressions of interest do not lead to a commitment to purchase.

Pre-screening increases investor interest and expectations, speeding up the sales process. Additionally, you can expect secondary effects such as increased product sales, customer acquisition, and brand awareness.

Eligibility Requirements

Regulation A applies to companies established and operating in the United States and Canada.

Even if officers, partners, or managers operate outside the United States or Canada, if they primarily direct and manage company activities from the U.S. or Canada, they are considered to have a “principal place of business.”

Issuers for Which Regulation A Cannot Be Applied

1. Investment companies under the Investment Companies Act of 1940 (including BDCs)
2. Blank Check Company
3. Asset-backed securities and mineral equity offering companies
4. Issuers subject to SEC refusal, suspension, or cancellation orders
5. Issuers that have not submitted continuation reports
6. Rule 262 Bad Actor Disqualified Issuer

Eligible Securities

• Common stock
• Preferred stock
• Options
• Warrant
• Convertible securities
• Bond

The value of the relevant securities must be included in the total offering amount.

More Information

Details of the Regulation A offering:

• SEC Final Rule Changes for Exempt Offerings – Part 4
• Regulation A Continues to Grow

Contact Us

Fundraising and attracting investors are essential for business success and improved profitability. However, deciding which method to choose is not easy.

For consultations, please call 877-541-3263 or make a reservation through the inquiry form.