Reg A+ IPO

(Reg A+)

Regulation A+ (Reg A+ IPO) is an alternative to a traditional IPO, which makes it easier for existing public reporting companies and smaller, early stage companies to access growth capital.

Looking to encourage small-business growth, in 2012 Congress passed the Jumpstart Our Business (JOBS) Act, a law intended to support small- business growth and employment by lowering regulatory hurdles for companies trying to go public and allowing firms to have more private shareholders.

In 2015, Title IV of the JOBS Act went into effect, allowing companies to raise money and offer shares to the general public and not just accredited investors.

On May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection ACT. Section 508, “ImprovingAccess to Capital” which now allows reporting public companies to raise up to $50MM from the general public under Regulation A+.

Through Reg A+, a U.S. or Canadian company is afforded the opportunity to:

  • Raise up to $50 million in a 12-month period using a “public solicitation” of its shares and have the offering be exempt from SEC and state securities law registration.
  • Confidentially submit its offering memorandum to the SEC and enjoy the opportunity to “test the waters” before pursuing a Reg A+ Offering.
  • Enjoy a streamlined, expedited review process where the company is required to make its offering memorandum public just 21 days before SEC qualification and the beginning of its roadshow.
  • Combine public funding (through Reg A+) with private funds from venture capitalists to create a larger round of fundraising.

How to Prepare for a Reg A+ Filing

A company looking to pursue a Reg A+ filing will need to:

  1. Assemble a team of professionals for IPO preparation. At a minimum, that team will include: company counsel, independent auditors and consulting accountants, underwriters, underwriters’ counsel, transfer agent, Edgar filer and other advisors and service providers for certain aspects of the Reg A+ process.
  2. Submit an offering registration to the SEC for approval for distribution to offering participants. Non-accredited investors may participate in a Reg A+ offering.
  3. Raise a sufficient amount and take other actions that allow the company to meet all listing requirements or up list from the OTC Market to Nasdaq or NYSE American.
  4. Comply with the rules applicable to listed companies, including filing annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC if listing on Nasdaq, NYSE or OTC QX and bi-annual reporting if listing on OTC QB .

Reg A+ is the ``New IPO``

The Differences Between a Reg A+ IPO and a Traditional IPO

Reg A+

Reg A+

Institutional Investors @ Broker Dealer

Retail Investors @ Broker Dealer

Non Accredited Investors

General Public Advertising

No Quiet Period

Shares Sold Through Selling Group

Low Cost

Expedited Registration Process

Raise Up to $50 Million Every 12 Months

List on NYSE or Nasdaq

1-A Registration

Fully Reporting

Traditional IPO

Traditional IPO

Institutional Investors @ Broker Dealer

Retail Investors @ Broker Dealer

No Non Accredited Investors

No General Public Advertising

Quiet Period

Shares Sold Through Selling Group

High Cost

Slower Registration Process

New Registration Required

List on NYSE or NASDAQ

S-1 Registration

Fully Reporting

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