SEC Clarifications for Reg A Filers

Anyone involved in Regulation A, and more specifically Tier II of Regulation A, known as Reg A+ has been asking questions about certain aspects of the regulation, and it’s process that weren’t clearly and explicitly outlined in the final rules.   To the SEC’s credit, they have come out very quickly and started answering questions through their Compliance and Disclosure Interpretations (“C&DIs”).  In the question an answer format, they answer 11 questions as it relates to Regulation A. Here are a few highlights.Companies previously reporting under the Exchange Act (public companies) who properly suspended their reporting obligations under the Exchange Act would be eligible to raise money under Regulation A.For newly formed entities filing 1-A report with audited financials whose inception date is  within 9 months of the filing and no more than 3 months have passed from their year end are only required to file an inception balance sheet.  The financial statements will still require notes to the financial statements under GAAP, but the income statement, cash flow and statement of stockholders equity can be omitted as such would be blank. The last clarification we will highlight, relates to the SEC’s stance to allow short form solicitation in a platform that restricts the number of characters (i.e. Twitter), so long as there is a hyperlink within the solicitation that links to required disclosures under Rule 255

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