The SEC has decided to increase max raise amounts by 50% the maximum offering amount under Tier 2 of Reg A+ from $50 million to $75 million per year.
Note that companies that already have Qualified their Reg A+ will be allowed to file a Post Qualification Amendment with the SEC to increase the amount of capital sought in their Reg A+ after the change is effective.
The SEC announcement has caused some confusion by referring to “secondary offerings” being increased from $15 mill to $22.5 mill, because the term “Secondary Offerings” is often associated with Public Companies that are listed making their Secondary Offerings to raise up to $50 mill per Secondary. And of course, they are now allowed to raise up to $75 mill per Secondary, per year.
What the SEC was referring to in their “secondary” language was that the expansion of Reg A+ also has the effect of increasing allowed insider and affiliate selling to $22.5 mill from $15 mill in a fully funded $75 mill Reg A+ in the year of a companies’ first Reg A+.
We expect the $75 mill Reg A+ will further accelerate the use of Reg A+ for Secondary Offerings for strong companies, and also reinvigorate Reg A+ IPO’s to the NASDAQ. This fits with a trend of attractive companies enquiring with Russell Creative Group about having us help them with their IPOs.
These changes are part of a detailed amendment package from the SEC that was designed to harmonize registration exemptions, eliminate complexity, and facilitate access to capital and investment while preserving important investor protections.
