Regulation A+: What Do We Know So Far?
Anzhela Knyazeva1
November 2016


Summary
In recent years small companies have engaged in relatively few registered initial public offerings (IPOs) and have relied more often on offerings exempt from registration. However, Regulation A, one such exemption from securities registration, has seen limited use in recent years. As part of implementing the JOBS Act, the Commission amended Regulation A. These amendments (Regulation A+) became effective on June 19, 2015. In the approximately 16 months since the amendments became effective, Regulation A+ securities offerings have outpaced the past rate of Regulation A activity. As of October 31, 2016, prospective issuers have publicly filed offering statements for 147 Regulation A+ offerings, seeking up to approximately $2.6 billion in financing. Of those, approximately 81 offerings seeking up to approximately $1.5 billion have been qualified by the Commission.

(Offerings must be qualified by the Commission before issuers may sell securities).
Approximately $190 million has been reported raised during that period, although this likely understates the true amount raised due to reporting timeframes.

Issuers are availing themselves of both Tier 1 and Tier 2, but Tier 2 offerings were on the margin more common among qualified offerings, accounting for 60% of qualified offerings.
The offer amount varied with issuer size, with the average issuer was seeking up to approximately $18 million.

Companies mainly offered equity, which accounted for over 85% of all offerings.
The majority of offerings were conducted on a best-efforts, self-underwritten basis, consistent with the small offering size and the small size of a typical issuer.
Most of the issuers have previously engaged in private offerings, consistent with the use of amended Regulation A as a capital raising on-ramp.