Regulation A+
SEC rules under Title IV of the JOBS Act creating two tiers of "mini-IPO" offerings. Both tiers require SEC qualification of a Form 1-A offering statement. Tier 1: up to $20 million in a 12-month period, with state registration also required. Tier 2: up to $75 million in a 12-month period, with audited financial statements, ongoing reporting, and preemption of state registration. Securities sold under Regulation A are not "restricted securities" under Rule 144, though state secondary-trading rules can still limit resales. Form 1-A offering circular required. Useful intermediate path between Reg D private placements and full Form S-1 IPO.
Regulation A+ (also called Reg A) is an SEC framework under Title IV of the Jumpstart Our Business Startups (JOBS) Act of 2012 creating "mini-IPO" offerings for non-accredited investors. The framework provides two tiers: Both tiers require SEC qualification. Tier 1 (up to $20 million) also requires state registration; Tier 2 (up to $75 million) preempts state registration. Reg A+ is an intermediate path between Reg D private placements (limited to specific investor types) and full Form S-1 IPO (substantial cost and ongoing reporting). Securities issued under Reg A+ are not restricted securities under Rule 144, which can support secondary trading, subject to state resale rules.
Tier 1 vs. Tier 2, key differences
The two Reg A+ tiers: (1) Tier 1: up to $20 million annually; state-level registration required (substantial multi-state burden); no ongoing SEC reporting other than an exit report on Form 1-Z; no audited financial statement requirement; (2) Tier 2: up to $75 million annually; SEC-only qualification (state-law preemption); ongoing semiannual and annual SEC reporting; audited financial statement requirement; per-investor investment limits for non-accredited (10% of greater of annual income or net worth). Tier 2's preemption of state registration avoids the state-by-state review that Tier 1 requires.
Form 1-A offering circular
Reg A+ offerings require Form 1-A offering circular qualified by the SEC. Form 1-A is a comprehensive disclosure document parallel to Form S-1 but with reduced requirements: (1) business description; (2) risk factors; (3) management discussion and analysis; (4) directors, officers, and significant employees; (5) compensation of directors and executive officers; (6) security ownership; (7) related-party transactions; (8) financial statements, Tier 2 requires audited; (9) use of proceeds; (10) plan of distribution.
Per-investor limits (Tier 2)
Unless the securities will be listed on a national securities exchange on qualification, Tier 2 limits a non-accredited investor's purchase to 10% of the greater of annual income or net worth (for a natural person) or of revenue or net assets (for an entity), measured per offering. Accredited investors face no per-investor limits. The limit applies on per-offering basis, not aggregate across all offerings. The per-investor limits are intended to protect retail investors from concentration risk while still permitting meaningful retail participation. The issuer may rely on the purchaser's representation of compliance with the limit unless it knows the representation is untrue.
Testing the waters
Reg A+ permits "testing the waters", issuers can solicit investor interest before filing Form 1-A: (1) before filing, solicitation permitted with required legends; (2) after filing but before qualification, solicitation permitted with offering circular delivery requirement. Testing the waters allows: (a) gauging investor interest before incurring offering costs; (b) building investor list; (c) refining offering terms based on feedback. Subject to anti-fraud rules, false or misleading communications create exposure regardless of formal status.
Ongoing reporting (Tier 2)
Tier 2 issuers face ongoing SEC reporting: (1) Form 1-K (annual report), comprehensive annual disclosure with audited financial statements; (2) Form 1-SA (semiannual report), interim financial statements and updated information; (3) Form 1-U (current report), for material events; (4) Form 1-Z (suspension/termination of reporting). The reporting burden is substantial, comparable to but somewhat lighter than full Exchange Act reporting.
Securities tradability
Reg A+ securities are not "restricted securities" under Rule 144, so non-affiliates face no Rule 144 holding period. State secondary-trading rules still apply to resales, because Tier 2 preemption covers only offers and sales in the offering itself. This distinguishes Reg A+ from Reg D (where Rule 144 typically requires 6-month or 1-year holding). Some Reg A+ issuers list securities on OTC markets or specialized platforms for secondary trading. The free tradability supports retail investor participation but creates ongoing market dynamics for issuer.
Comparison to alternatives
Reg A+ comparison: (1) vs. Reg D, Rule 506 has no offering size limit but limits or bars sales to non-accredited investors, while Rule 504 is capped at $10M; Reg A+ permits non-accredited but caps offering size; (2) vs. Reg CF, Reg CF caps at $5M; Reg A+ Tier 2 caps at $75M; (3) vs. Form S-1 IPO, Form S-1 has no offering limit but generally costs substantially more; Reg A+ generally costs less; (4) vs. Reverse Merger, different mechanism for going public; Reg A+ is direct primary offering. Reg A+ fills the gap between Reg CF and full IPO for offerings $5M-$75M targeting retail investors.
Texas issuers that look at Reg A+ are often consumer-facing companies with customers who want to invest, companies seeking public-style distribution before a registered IPO, or companies raising more than Reg CF allows without limiting the offering to accredited investors. The main decisions are the tier (Tier 2 preempts state registration; Tier 1 requires it), how the securities will be sold (by the issuer directly or through a registered broker-dealer, since funding portals may be used only for Reg CF offerings), the cost of audited financial statements and Tier 2 reporting, and whether to seek a trading venue for resales. Non-accredited investors in a Tier 2 offering of unlisted securities are subject to the 10% purchase limit, and the offering circular in Form 1-A is the primary disclosure document. Because the SEC reviews and qualifies every offering statement, Reg A+ generally takes longer and costs more than a Reg D offering.