REGULATION A - Tier 2:

Regulation A+ is an exemption program provided by the Securities and Exchange Commission (“SEC”) providing for the sale of securities to investors (accredited and non-accredited) while also allowing the same public promotion of the offering and investment opportunity as would be provided for in a fully public registered offering. Regulation A+ provides a more streamlined and cost effective method to execute a public offering to raise capital, sell to any investor whether they be accredited or non-accredited, and still maintain status as a private company that is not subject to the same reporting requirements of a fully public company post offering. Further, Regulation A+ issued securities are freely trading from the outset – unlike securities sold under Regulation D which are subject to the Rule 144 transfer restrictions.

Regulation A+  Tier 2 ($50 million max):

  • Tier 2 allows for the sale of up to $50 million in a 12-month period.

  • State Interaction:

    • Tier 2 preempts state blue sky law.

  • Offering Circular:

    • A company may elect to either provide the disclosure using Form 1-A or the disclosure in a Form S-1.

    • Note – for issuers that want to file a Form 8-A and register under the Exchange Act – the Form S-1 format is a precondition to that filing.

  • Financials:

    • Tier 2 offerings require audited financials.

    • For new special purpose entities (such as a newly formed LLC for a real estate fund) – only the issuers balance sheet would need to be audited.

  • Reporting:

    • Tier 2 issuers are required to submit certain annual (Form 1-K) and semi-annual (Form 1-SA) reports.

    • If the issuer has fewer than 300 shareholders of record, they may file to withdraw from these reporting requirements after the first annual report.

    • If the company meets certain asset and number-of-shareholders tests (assets exceeding $10,000,000 and a class of equity securities held of record by either 2,000 persons or 500 persons who are not accredited), and has a public float of more than $75M (held by non-affiliates) or annual revenue greater than $50M annually, the company will enter a two-year transition period to begin complying with the reporting requirements of fully public companies.

Issuer Requirements:

Both Tier I and Tier 2 Regulation A+ offerings contain certain minimum basic requirements, including issuer eligibility provisions and disclosure requirements.

Regulation A+ is available to companies organized and operating in the United States and Canada. A company will be considered to have its “principal place of business” in the U.S. or Canada for purposes of determination of Regulation A+ eligibility if its officers, partners, or managers primarily direct, control and coordinate the company’s activities from the U.S. or Canada, even if the actual operations are located outside those countries.

 

The following issuers are NOT eligible for a Regulation A+ offering:

  • Companies who currently subject to the reporting requirements of the Exchange Act;

  • Investment companies registered or required to be registered under the Investment Company Act of 1940, including BDC’s. However, a company that operates investments that are exempt from the registration requirements under the 1940 Act would qualify, such as REIT’s and companies that transact in certain loans such as small business loans, student loans, auto loans, and personal loans.

  • Blank check companies, which are companies that have no specific business plan or purpose or whose business plan and purpose is to engage in a merger or acquisition with an unidentified target; however, shell companies are not prohibited, unless such shell company is also a blank check company. A shell company is a company that has no or nominal operations; and either no or nominal assets, assets consisting of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets. Accordingly, a start-up business or minimally operating business may utilize Regulation A+;

  • Issuers seeking to offer and sell asset-backed securities or fractional undivided interests directly in oil, gas or other mineral rights (note Issuers in those industries can use Regulation A+ if they are selling an interest in an LLC or LP that engages in such activities);

  • Issuers that have been subject to any order of the SEC under Exchange Act Section 12(j) denying, suspending or revoking registration, entered within the past five years. Accordingly, a company that is deregistered for delinquent reporting would not be eligible for Regulation A+;

  • Issuers that became subject to Regulation A+ reporting requirements, such as through a Tier 2 offering, and did not file the required ongoing reports during the preceding two years; and

  • Issuers that are disqualified under the Rule 262 “bad actor” provisions.

To Retain and Engage Private Placement Markets for a Regulation A+ / Tier 2 Offering:

Since 2017, we have prepared many Regulation A+ / Tier II Offerings, and have done so for nearly all types of company structures, and all types of securities (from simple offerings of stock, to unit offerings, to structured finance offerings) and in every industry type. 

 

Service(s) to be Provided:

  • Registration of the company with the United States Securities & Exchange Commission.

    • Obtain SEC CIK Number

    • Obtain EDGAR Online Access

  • Drafting & Preparation of a State & Federal Securities Laws Compliant Regulation A+ / Tier I Offering.

    • Our Custom Regulation A+ / Tier II Offering Preparation includes (but is not limited to):

      • Offering Structuring and Development of a Presentation Grade Regulation A+ / Tier II Offering,

      • all SEC Filing(s) as required via the EDGAR,

      • State & Federal Securities Laws Compliance Review,  and

      • Access to our Broker-Dealer Network & Institutional Investment Banking Network (See www.PPMEquity.com & www.PPMDebt.com)

  • One year of 1-K & 1-SA Reports.

To engage us for a Custom Regulation A+ / Tier II Offering Preparation:

  1. Private Placement Markets is very selective about the Reg A+ Tier II Clients it engages with. Please call our Capital Markets Team or email us as the contact listed to the left, and we will schedule a time to speak regarding your Reg A+ Tier II needs.

  2. If there is a mutual interest to engage for the Drafting and Filing of your Reg A+ Tier II, we will forward you an engagement letter to be signed, at which time you will be required to submit a retainer equal to 50% of our service charge for the drafting of the Regulation A+ Offering Memorandum. Our total estimated cost for a Regulation A+ / Tier 1 is a Flat $7,500 USD (50% = $3,750 USD). NOTE: The balance of $3,750 will be due and payable 30 days net from retaining services or upon delivery of a final Regulation A+ / Tier II Offering Document whichever comes first.

  3. Once complete, we will send you an email with information detailing the necessary information we need to get started working on your offering.

  4. General Time from Start-to-Finish, given the vast number of Offerings we have done over the past four plus years, approximately one week. 

Mr. Steve Muehler

Founder & Managing Member

Private Placement Markets

101 California Street

San Francisco, CA 94111

Email: Steve@PPMSecurities.com

Phone: (877) 259-8066

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Private Placement Markets, LLC (a Delaware Limited Liability Company) provides no depository services and is not insured by the FDIC. Private Placement Markets is an Investment Banking Industry Document Preparation Company and Capital Markets Advisor. Private Placement Markets does not offer, and does not offer to provide any broker dealer or market maker services. Private Placement Markets operates this website (referred to as the “Website”). By accessing this Website and any pages thereof, you agree to be bound by its Terms of Use and Privacy Policy. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Private Placement Markets does not provide financial planning services. Private Placement Markets does not provide tax advice and does not represent in any manner that the outcomes described herein will result in any particular tax consequence.

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