The new Regulation A rules, Title IV of the JOBS Act, were adopted by the Securities and Exchange Commission (SEC) in March 2015 and affect Regulation A small public offerings, referred to as “Reg A+.” The rules allow companies to offer shares to the general public and raise the amount of capital a private company can raise in a Regulation A offering: Tier 1 can raise up to $20 million in a 12-month period and Tier 2 can raise up to $50 million in a 12-month period. Previously, offerings were capped at an upper funding limit of $5 million and companies could only crowdfund from accredited investors.
According to former SEC Chair Mary Jo White, “These new rules provide an effective, workable path to raising capital that also provides strong investor protections. It is important for the commission to continue to look for ways that our rules can facilitate capital-raising by smaller companies.”Emerging companies now have additional tools available to them for raising much needed capital. MaloneBailey can provide entrepreneurial clients with the audit expertise needed when interested in taking advantage of Regulation A+. Our service offering to Reg A+ Tier 2 companies is an audit that combines PCAOB audit standard with US GAAS, which offers companies significant savings in terms of time and cost given many plan to do registration statements down the road.
- Steven Vertucci, Audit Partner