Regulation A+ – Sale And Resale Of Equity Securities

June 11th, 2015 by Laura Anthony, Esq.

Regulation A+ – Sale And Resale Of Equity Securities

On March 25, 2015, the SEC released final rules amending Regulation A. The new rules are commonly referred to as Regulation A+. Tier I of Regulation A+, which does not preempt state law, allows for a raise of up to $20 million in any 12-month period and Tier II, which does preempt state law, allows a raise of up to $50 million in any 12-month period. Issuers may elect to proceed under either Tier I or Tier II for offerings up to $20 million. Tier II offerings require additional disclosures and ongoing reporting requirements.

I have previously discussed eligibility requirements and the availability of marketing and advertising for both Tier 1 and Tier II offerings. Today I am touching on the types of securities that are eligible for a Regulation A+ offering.

Regulation A+ is available for the sale or resale of equity securities, including:

  • Common and preferred stock;
  • Stock options
  • Warrants
  • Convertible debt
  • Any other rights convertible into equity securities;
  • Dividends on preferred or other equity securities payable in an equity security
  • Pledged or guaranteed equity securities

If convertible securities or warrants are offered that may be converted or exchanged within one year of the offering statement qualification, or at any time at the sole option of the issuer, the underlying securities must also be qualified in the offering and included in the aggregate offering value. Accordingly, the underlying securities will be included in determining the offering limits of $20 million and $50 million respectively.

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