The JOBS Act of 2012 increased the amount that may be raised under a Regulation A offering to $50 million. This exemption from full registration allows smaller companies access to the capital markets without having to go through the expense of filing a full registration statement with the SEC. The issuer will instead file an abbreviated notice of sale or offering circular known as a 1-A with the SEC and purchasers of the issue will be given a copy of the offering circular rather than a final prospectus.
Under a regulation A offering, purchasers of the issue must have the preliminary or final offering circular mailed to them 48 hours before mailing the confirmation. The same 20-day cooling-off period also applies to Regulation A offerings The JOBS Act further refined Regulation A into two tiers, with Regulation A now sometimes being referred to as Regulation A plus. Tier 1 allows issuers to raise up to $20 million. Of this $20 million no more than $6 million may be offered by selling shareholders. Tier 2 allows issuers to raise up to $50 million of which no more than $15 million may be offered by selling shareholders. Be sure you have a good understanding of the rules of Regulation for you exam. Pass your exam or your money back with our greenlight pass guarantee.