Written by wordpress627 on March 16, 2018

The US House of Representatives has passed legislation that will increase the Reg A+ cap to $75 million from the current $50 million amount for Tier 2 companies. Reg A+ is the 2015 update of the 2012 JOBS Act Reg A – HR 4263, or the Regulation A+ Improvement Act of 2017.

Interestingly, as of year-close 2017, the average amount of capital raised by both Tier 1 and Tier 2 RegA+ offerings was well below Tier 1’s $20M cap. This increase to $75M cap is positioned to have a positive impact for some EGCs because it may attract some of the more traditional (larger) underwriters to the process. Attracting more sophisticated parties to the transaction could help facilitate raising capital, many of which were unable to take positions in low-capped offerings.

Reg A+ is frequently referred to as a mini-IPO as it is less cumbersome then a full blown public offering. Companies who complete a Tier 1 offering are not required to file ongoing reports with the SEC, other than an exit report (Form 1-Z) at the completion of an offering. Companies who complete Tier 2 offerings are subject to an ongoing reporting regime and are required to file annual, semi-annual and current event reports with the SEC.

Tier 2 companies are required to file:

  • Annual reports on Form 1-K
  • Semi-annual reports on Form 1-SA
  • Current reports on Form 1-U
  • Special financial reports on Form 1-K and Form 1-SA
  • Exit reports on Form 1-Z

Edgar Agents have helped dozens of companies register their Reg A+ offering, SEC Form 1-A. One-third of the Reg A+ issuers on NYSE and NASDAQ are our clients.

The bill will now move over to the Senate.