Regulation A (Reg A) and Regulation A+ (Reg A+) of the SEC

Exempt Offering under Regulation A

The Goldwin.associates team can assist you in the preparation of your Reg A or Reg A+ prospectus or offering memorandum for a private placement. We offer comprehensive Reg A document preparation services, which can be used to obtain equity or debt financing.

Regulation A is an SEC program designed to create exemptions for companies providing up to $5 million in funding. The actual dollar amount is limited to $5 million, but under Reg A, a company can choose to raise capital through equity, debt, or a combination of the two. The Regulation A Exempt Offering is based on existing state and federal exemptions for the sale of private equity or debt securities to raise equity capital. Exempt sales may be used when institutions such as banks and or other firms that allocate capital are unavailable, or because they require an increase in the equity percentage.

The US Securities and Exchange Commission updated Regulation A in 2015 to allow for larger capital raises via Regulation A+.

The following qualifications are included in state and federal statutes for the use of exemptions:

◆  Funding ranges from $1 to $5 million.
Intrastate transaction (preferred, but not required):
➢  Have a structured business plan
➢  Been in business for at least three years (not mining, oil and gas)
➢  Have good credit
➢  Have positive EBITDA
➢  GAAP compliant financials
➢  Able to be qualified as an issuing broker
➢  Have experienced management team

Companies that will use a Regulation A in accordance with the conditional small issues exemption from registration under the Securities Act of 1933 [17 CFR 230.251 – 230.263] must meet the following requirements:

◆  Must conduct specific business operations; cannot be a "blank check," development stage with no specific plan or purpose other than a merger, investment company under the Investment Company Act of 1940, or conducting mining, oil or gas exploration and production operations.
No minimum security/share price:
➢  Financial statements do not need to be audited but must be GAAP compliant 
➢  The issuing company must secure a written legal opinion of the offering by counsel 
➢  Form 1-A filed with the SEC
➢  “Test the waters” before filing
➢  Twenty (20) days must pass between solicitation statement and first sale of the security
➢  Issuer qualified as an issuing broker in each state in which the security is offered 
➢  Registration in each state in which the security is offered 
➢  Once approved, seven original copies to be filed with the SEC
➢  Filing fees are required in each state in which the security is offered
➢  The issuing company cannot offer a dividend or transact a stock split for at least two years 
➢  The time frame from start to finish is approximately four to eight months

The Goldwin.associates team can assist you in structuring your Regulation. A private placement offering and can write the prospectus, offering memorandum, or private placement memorandum in a clear and concise manner in accordance with Regulation A.