S.E.C.& A

Dr. Henri Duvalier

Regulation A

Regulation A provides an exemption from certain registration requirements under the U.S. Securities and Exchange Commission (SEC) for companies looking to raise capital by offering and selling securities to the public. While Regulation A offers a more streamlined and cost-effective way for smaller companies to access capital markets compared to a full SEC registration, not all companies are eligible to file for a Regulation A offering. Here are some key eligibility criteria:

1. **Type of Issuer**: Regulation A is typically available to companies organized in the United States or Canada, including corporations, LLCs, and certain other business entities. Foreign private issuers and investment companies are generally not eligible.

2. **Size of Offering**: There are two tiers under Regulation A, and the eligibility requirements differ for each:

- **Tier 1**: Companies can raise up to $20 million in a 12-month period through Tier 1 offerings.

- **Tier 2**: Companies can raise up to $75 million in a 12-month period through Tier 2 offerings.

3. **Financial Reporting**: Companies conducting Tier 1 offerings must provide two years of audited financial statements, while Tier 2 offerings require three years of audited financial statements. These financial statements must be prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).

4. **SEC Filing**: Issuers must file an offering statement with the SEC, which includes detailed information about the company, its management, and the securities being offered. This filing is subject to SEC review and approval.

5. **Blue Sky Laws**: Companies conducting Regulation A offerings must also comply with state securities regulations, known as Blue Sky Laws. Some states may have additional requirements or limitations.

6. **Testing the Waters**: Issuers can "test the waters" by soliciting interest from potential investors before filing the offering statement. This can help gauge market interest in the offering.

7. **Resale Restrictions**: There may be limitations on the resale of securities purchased in a Regulation A offering.

8. **Ongoing Reporting**: Tier 2 issuers are subject to ongoing SEC reporting, including annual, semi-annual, and current event reports.

It's important to note that while Regulation A offers certain regulatory relief compared to a full SEC registration, it still involves regulatory requirements and compliance obligations. Companies considering a Regulation A offering should consult legal and financial advisors to determine their eligibility and navigate the process successfully. Additionally, the specific rules and requirements may change over time, so it's essential to consult the latest guidance from the SEC and seek legal counsel to ensure compliance.