Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

SEC is Offering Guidance Regarding Regulation A+

Author: Dan Brecher

Date: July 13, 2015

Key Contacts

Back

The Securities and Exchange Commission, also known as the SEC is offering guidance regarding Regulation A+, which took effect on June 29, 2015.

The speed with which the agency’s Division of Corporation Finance published responses to several frequently asked questions suggests that the new securities exemption may be living up to the buzz.

Regulation A+
Photo by Paweł Czerwiński on Unsplash

Regulation A+ is intended to provide small businesses with greater access to capital by expanding a little used exemption to SEC registration. Under the new regulations, businesses will be able to offer and sell up to $50 million of securities in a 12-month period, so long as they meet certain eligibility, disclosure and reporting requirements.

Tier 1 would consist of securities offerings of up to $20 million in a 12-month period, with no more than $6 million in offers by selling security-holders that are affiliates of the issuer. Meanwhile, Tier 2 would include 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.

The Compliance and Disclosure Interpretations (C&DI’s) touch on a range of issues that have arisen regarding the expansion of Regulation A, including the submission of confidential documents, the use of social media to “test the waters,” and eligibility for the exemption.

Regulation A+ FAQ’s

Below is a brief sampling of the questions and answers provided by the SEC:

Can an issuer solicit interest and “test the waters” in a Regulation A offering on a platform that limits the number of characters or amount of text that can be included, thereby preventing the inclusion in such communication of the information required by Rule 255?

Yes. The staff will not object if the communication contains an active hyperlink to the required statements that otherwise satisfy Rule 255 and, where possible, prominently conveys, through introductory language or otherwise, that important or required information is provided through the hyperlink.

May a recently created entity choose to provide a balance sheet as of its inception date?

Yes, as long as the inception date is within nine months before the date of filing or qualification and the date of filing or qualification is no more than three months after the entity reached its first annual balance sheet date. The date of the most recent balance sheet determines which fiscal years, or period since existence for recently created entities, the statements of comprehensive income, cash flows and changes in stockholders’ equity must cover. When the balance sheet is dated as of inception, the statements of comprehensive income, cash flows and changes in stockholders’ equity will not be applicable.

Would a company with headquarters located within the United States or Canada, but whose business primarily involves managing operations that are located outside those countries, be considered to have its “principal place of business” within those countries for purposes of determining issuer eligibility under Regulation A?

Yes, such an issuer would be considered to have its “principal place of business” in the U.S. or Canada for purposes of determining issuer eligibility.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Does Your Homeowners Insurance Provide Adequate Coverage? post image

Does Your Homeowners Insurance Provide Adequate Coverage?

Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]

Author: Jesse M. Dimitro

Link to post with title - "Does Your Homeowners Insurance Provide Adequate Coverage?"
Understanding the Importance of a Non-Contingent Offer post image

Understanding the Importance of a Non-Contingent Offer

Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]

Author: Jesse M. Dimitro

Link to post with title - "Understanding the Importance of a Non-Contingent Offer"
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC post image

Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC

Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC"
Novation Agreement Process: Step-by-Step Guide for Businesses post image

Novation Agreement Process: Step-by-Step Guide for Businesses

Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]

Author: Dan Brecher

Link to post with title - "Novation Agreement Process: Step-by-Step Guide for Businesses"
What Is a Trade Secret? Key Elements and Legal Protections Explained post image

What Is a Trade Secret? Key Elements and Legal Protections Explained

What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]

Author: Ronald S. Bienstock

Link to post with title - "What Is a Trade Secret? Key Elements and Legal Protections Explained"
What Is Title Insurance? Safeguarding Against Title Defects post image

What Is Title Insurance? Safeguarding Against Title Defects

If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]

Author: Patrick T. Conlon

Link to post with title - "What Is Title Insurance? Safeguarding Against Title Defects"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

SEC is Offering Guidance Regarding Regulation A+

Author: Dan Brecher

The Securities and Exchange Commission, also known as the SEC is offering guidance regarding Regulation A+, which took effect on June 29, 2015.

The speed with which the agency’s Division of Corporation Finance published responses to several frequently asked questions suggests that the new securities exemption may be living up to the buzz.

Regulation A+
Photo by Paweł Czerwiński on Unsplash

Regulation A+ is intended to provide small businesses with greater access to capital by expanding a little used exemption to SEC registration. Under the new regulations, businesses will be able to offer and sell up to $50 million of securities in a 12-month period, so long as they meet certain eligibility, disclosure and reporting requirements.

Tier 1 would consist of securities offerings of up to $20 million in a 12-month period, with no more than $6 million in offers by selling security-holders that are affiliates of the issuer. Meanwhile, Tier 2 would include 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.

The Compliance and Disclosure Interpretations (C&DI’s) touch on a range of issues that have arisen regarding the expansion of Regulation A, including the submission of confidential documents, the use of social media to “test the waters,” and eligibility for the exemption.

Regulation A+ FAQ’s

Below is a brief sampling of the questions and answers provided by the SEC:

Can an issuer solicit interest and “test the waters” in a Regulation A offering on a platform that limits the number of characters or amount of text that can be included, thereby preventing the inclusion in such communication of the information required by Rule 255?

Yes. The staff will not object if the communication contains an active hyperlink to the required statements that otherwise satisfy Rule 255 and, where possible, prominently conveys, through introductory language or otherwise, that important or required information is provided through the hyperlink.

May a recently created entity choose to provide a balance sheet as of its inception date?

Yes, as long as the inception date is within nine months before the date of filing or qualification and the date of filing or qualification is no more than three months after the entity reached its first annual balance sheet date. The date of the most recent balance sheet determines which fiscal years, or period since existence for recently created entities, the statements of comprehensive income, cash flows and changes in stockholders’ equity must cover. When the balance sheet is dated as of inception, the statements of comprehensive income, cash flows and changes in stockholders’ equity will not be applicable.

Would a company with headquarters located within the United States or Canada, but whose business primarily involves managing operations that are located outside those countries, be considered to have its “principal place of business” within those countries for purposes of determining issuer eligibility under Regulation A?

Yes, such an issuer would be considered to have its “principal place of business” in the U.S. or Canada for purposes of determining issuer eligibility.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: