Regulation A+ expands existing Regulation A to allow companies to raise up to $50 million from both accredited and non-accredited investors through public offerings. It establishes two tiers: Tier 1 allows raises of up to $20 million and requires less disclosure, while Tier 2 allows up to $50 million but requires audited financial statements and ongoing SEC reporting. Regulation A+ preempts state securities laws for Tier 2 offerings. It provides several benefits over registered IPOs including no restriction on resales and the ability to voluntarily become an SEC reporting company. Companies must meet certain requirements regarding audits, disclosures, and bad actor restrictions to utilize Regulation A+.

1. Regulation A+ Q&A

2. Regulation A+
Regulation A+ expands existing Regulation A. Existing Regulation A
provides an existing exemption from registration for smaller issuers of
securities. Regulation A+ offerings can be used in combination with direct
public offerings and initial public offerings as part of a Going Public
Transaction.
Regulation A+ simplifies the process of obtaining the seed
stockholders required by the Financial Industry Regulatory Authority
while allowing the issuer to raise initial capital.
When Is Regulation A+ Effective?
Regulation A+ is effective on June 19, 2015.

3. Can All Companies Use Regulation A+?
No. Regulation A+ offerings can only be conducted by companies that are
domiciled in and have their principal place of business in the United States
or Canada. As such, foreign issuers may not conduct Regulation
A+ offerings and must locate an alternative exemption for their
unregistered offering.
What Securities Can Be Registered On
Form 1-A Under Regulation A+?
Regulation A+ is limited to warrants and convertible equity securities.

4. How MuchCan I RaiseWith RegulationA+?
Tier 1, is available for offerings of securities 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. Tier 2 is available, for offerings of
securities 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.
Can The Company’s Existing Shareholders
Register Shares In A Regulation A+ Offering?
Yes. For a Tier 1 offering, secondary sales are limited to $6 million in a 12-
month period. For Tier 2 offerings, secondary sales are limited to $15 million
in a 12-month period. Additionally, secondary sales at the time of an issuer's
first Regulation A offering and within 12 months thereafter cannot exceed 30
percent of the aggregate offering price of that particular offering and for
affiliates only, the $6 million and $15 million annual limitations on secondary
sales continue indefinitely.

5. Who Can Invest In A Regulation A+
Offering?
Both accredited and non-accredited investors can participate in Regulation
A+ offerings. In a Tier 2 Offering, if the issuer does not become listed on a
national exchange, non-accredited investors may invest the greater of 10%
of their income or net worth (exclusive of principal residence), whichever is
greater.
If a company lists on a national exchange immediately upon
commencement of its offering, there are no limitations on how much may
be invested by non-accredited investors in the offering.
There is no cap on the amounts an accredited investor may invest in either
Tier 1 or Tier 2.

6. Are Regulation A+ Shares Restricted
Securities?
Shares sold in a Regulation A+ offering are not “restricted securities”. As
such, resales by non-affiliates are not subject to transfer restrictions.
Resales by affiliates (other than registered resales or secondary sales
under Regulation A+) are subject to the limitations of Rule 144, other
than the holding period requirement.

7. Do I Have To File Reports With The SEC
After My Regulation A+ Offering Is
Approved?
• Yes. You must file reports specifically designed for Regulation A+.
Issuers conducting Regulation A, Tier 1 offerings must file a Form 1-Z
within 30 days after the offering is completed or terminated. Form 1-A
requires information about the amount of securities qualified and sold,
as well as the price, fees, and net proceeds.
• Issuers conducting Regulation A, Tier 2 offering must report the same
information on Form 1-Z or, depending on when the offering is
terminated, in their annual report on Form 1-K. Issuers in Regulation A,
Tier 2 offerings become subject to ongoing SEC reporting obligations.

8. What Disclosures Are Required In A
Form 1-A Offering Statement?
The Regulation A+ Form 1-A offering statement has three parts: Part I,
which requires basic issuer information such as the details about the
security being offered, the jurisdictions where the securities will be
offered, and recent sales of unregistered securities. Part II, requires the
business, management, financial statement, and other substantive
disclosures. Part III, contains exhibits and related documents.
Are Regulation A+ Filings Submitted On
EDGAR?
Yes. All Regulation A+ filings must be made through the SEC’s electronic
filings system, known as EDGAR.

9. What SEC Periodic Reporting Obligations
Imposed Apply To Tier 2 Issuers?
Tier 2 issuers becomes subject to Regulation A reporting obligations if
certain conditions are met.
These include: (i) that the securities of each class covered by the Form 1-
A offering statement be held of record by less than 300 persons (1,200
persons for banks and bank holding companies), (ii) offers and sales under
the Form 1-A offering statement are not ongoing, and (iii) the issuer has
complied with its ongoing reporting obligations.

10. What Are The Ongoing Reporting
Obligations For Tier 2 Issuers?
Regulation A+ ongoing requirements for Tier 2 issuers include: (i) annual
reports on new Form 1-K, which will include the same information
required in a Form 1-A, and Regulation A offering circular other than the
offering-specific information; (ii) semiannual reports on new Form 1-SA
which includes financial statements and an MD&A; (iii) current information
reports on the new Form 1-U which reports “fundamental changes,” and
other specific events including bankruptcy or receivership, non-reliance on
previously issued financial statements, audit report or interim review,
changes in control, departure of certain executive officers and unregistered
sales of 10% or more of outstanding equity securities; and (iv) depending
on the financial statements included in the Form 1-A and the timing until
the next annual or semiannual report, financial reports on new Forms 1-K
and 1-SA are required for periods where there are gaps in the financial
information.

11. Do My Financial Statements Have To Be
Audited?
For Tier 1 Regulation A+ offerings, no audit is required. For Tier 2
offerings, Audited Annual Financial Statements must be provided by the
Company’s independent auditor. Note the auditor does not have to
registered with the Public Company Accounting Oversight Board.
What Periods Are Required To Be
Audited?
Financial statements must be dated not more than nine months before the
date of Regulation A+ filing or qualification, with the most recent annual
or interim balance sheet not older than nine months. If interim financial
statements are required, they must cover a period of at least six months.

12. Can A Tier 2 Issuer Become A Reporting
CompanyUnder The ExchangeAct By Filing A
Registration Statement On Form8-A InsteadOf
Form10?
Yes, a Tier 2 issuer can use Form 8-A to register a class of securities under
the Exchange Act concurrently with the qualification of a Tier 2 offering?
Can A Company Suspend Its Regulation A+
Reporting Requirements?
Yes. A company can suspend its ongoing reporting obligations after the fiscal
year in which its Form 1-A offering statement is qualified if it has filed an
annual report for that fiscal year using Form 1-Z.

13. Are Issuers In Tier 2 Offerings Exempt
From Section 12(g) Reporting?
Securities issued in a Tier 2 offering are exempt from the Exchange Act
registration requirements of Section 12(g) if and for so long as the issuer
remains subject to, and is current in (as of its fiscal year end) its Regulation
A periodic reporting obligations, provided the following additional
conditions are also met:
• the issuer has engaged a transfer agent that is appropriately registered
with the SEC; and
• the issuer has a public float of less than $75 million (or, in the absence of
a public float, annual revenues of less than $50 million) (similar to the
"smaller reporting company" qualifications).

14. Do I Have To Register My Regulation A+
Offering With State Regulators?
Regulation A+ also provides for the preemption of state securities law
registration statement requirements and qualification requirements for
securities offered or sold to “qualified purchasers” in Tier 2 offerings. Tier 1
offerings will be subject to federal and state registration and qualification
requirements, and issuers may take advantage of the coordinated review
program of the North American Securities Administrators Association
(NASAA). Companies should remember that states retain authority to:
• require the filing of any documents filed with the SEC “for notice purposes
and payment of fees”;
• enforce filing and fee requirements by suspending offerings within a given
state; and
• investigate and bring enforcement actions with respect to fraudulent
securities offerings.

15. Does The Integration Rule Apply To
Regulation A+ Offerings?
Regulation A+ offerings will not be integrated with prior offers or sales of
securities. Subsequent offers or sale will not be integrated with securities
offerings that are:
• registered pursuant to Securities Act, unless the abandoned Regulation A
offering provisions are applicable
• conducted pursuant to Rule 701;
• conducted pursuant to employee benefit plans;
• conducted pursuant to Regulation S;
• conducted pursuant to Regulation Crowdfunding; or
• conducted more than six months after the completion of the Regulation
A offering.

16. Are Bad Actors Banned From Regulation
A+ Offerings?
Yes. Regulation A+ includes bad actor disqualification provisions as
adopted under Rule 506(d) of Regulation D. Regulation A+ added two
additional disqualification triggers.
These are Securities & Exchange Commission cease-and-desist orders for
violations of scienter-based anti-fraud provisions of the federal securities
laws or the registration provisions of Section 5 of the Securities Act and
the final orders and bars of certain state and other federal regulators.

17. What Are The Advantages Of
Regulation A+?
Regulation A+ Offers Numerous Benefits. Among Them Are:
• Because securities sold in
Regulation A+ offerings are
unrestricted, investors and
shareholders have an exist
strategy.
• Issuers can voluntarily become
a full SEC reporting company by
using Form 8-A and list on a
national securities exchange
upon closing of the offering.
• Regulation A+ allows both
accredited and non-accredited
investors to participate creating
a large investor pool.
• State Blue Sky Laws are pre-
empted in Tier 2 offerings.
• Regulation A+ offers two tiers of
offerings providing flexibility to
investors.
• Tier 1 offerings do not require
audited financial statements.
• Disclosure requirements are
scaled down from those
required in an SEC registration
statement.

18. For further information about this securities law Q & A, please
contact Brenda Hamilton, Securities Attorney at 101 Plaza Real South,
Suite 202 North, Boca Raton Florida, (561) 416-8956, or
info@securitieslawyer101.com. This securities law blog post is provided
as a general informational service to clients and friends of Hamilton &
Associates Law Group, P.A. and should not be construed as, and does not
constitute legal advice on any specific matter, nor does this message
create an attorney-client relationship. Please note that the prior results
discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Going Public Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com