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Chapter 1 — Introduction to Initial Public Offerings

1.8 Offerings Made in Accordance With Regulation A

1.8 Offerings Made in Accordance With Regulation A

Regulation A, as amended in 2015 (also referred to Reg A or Reg A+), provides an exemption from the ordinary requirements of the Securities Act. This exemption allows U.S. and Canadian companies to raise up to $75 million in a 12-month period by issuing certain types of securities, including equity securities. Regulation A requires that certain disclosure documents be submitted via EDGAR and allows for the confidential review of offering documents. Two tiers of offerings are provided under Regulation A:
  • Tier 1, which consists of securities offerings of up to $20 million in any 12-month period, including no more than $6 million on behalf of the selling securities holders that are affiliates.
  • Tier 2, which consists of securities offerings of up to $75 million in any 12-month period, including no more than $22.5 million on behalf of the selling securities holders that are affiliates.

Footnotes

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While a Regulation A Tier 1 issuer must provide financial statements in its offering document, such financial statements do not need be audited unless the issuer’s financial statements were already audited for other purposes. Regulation A Tier 1 issuers are not subject to ongoing reporting requirements.