Regulation A Ongoing Reporting Requirements

Regulation A Ongoing Reporting Requirements


I’m attorney Laura Anthony founding partner
of Legal & Compliance, a full service corporate, securities, and business transactions law
firm. Today is the continuation in a LawCast series
talking about Regulation A. Both Tier I and Tier 2 issuers must file summary information
after the termination or completion of their Regulation A offering. A Tier I company will need to file certain
information about the Regulation A offering, including information on sales and the termination
of sales, on a Form 1-Z exit report, no later than 30 calendar days after termination or
completion of the offering. Tier I issuers otherwise do not have any ongoing
reporting requirements. Tier 2 companies are also required to file
certain offering termination information and would have the choice of using Form 1-Z or
including the information in their first annual report on Form 1-K. In addition to the offering summary information,
Tier 2 issuers are required to submit ongoing reports including: an annual report on Form
1-K, a semiannual report on Form 1-SA, current event reports on Form 1-U and notice of suspension
of ongoing reporting obligations on Form 1-Z. The ongoing reporting for Tier 2 companies
is less demanding than the reporting requirements under the Securities Exchange Act. In particular, there are fewer 1-K items and
only the semiannual 1-SA, rather than the quarterly 10-Q, and fewer events triggering
Form 1-U compared to Form 8-K. However, as I’ve mentioned in other LawCasts
in this series, in order to maintain current information for purposes of Rule 144, some
issuers elect to file quarterly information by filing a quarterly report using the form
1-U during those periods in which they are not otherwise required to file an annual or
semi-annual report. The annual Form 1-K must be filed within 120
calendar days of the end of the fiscal year. The semiannual Form 1-SA must be filed within
90 calendar days after the end of the semiannual period. The current report on Form 1-U must be filed
within four business days of the triggering event. Successor issuers, such as following a merger,
must continue to file the ongoing reports. The rules also provide for a suspension of
reporting obligations for a Reg A reporting company. Termination is accomplished by filing a Form
1-Z and requires that a company be current in its reporting up to that time, have fewer
than 300 shareholders of record, and have no ongoing offers or sales in reliance on
a Regulation A offering statement. Also as discussed in prior LawCasts in this
series, a Tier 2 company that has used an S-1 format for its Form 1-A can file a Form
8-A concurrently with the qualification of its offering circular and become subject to
the full Exchange Act reporting requirement and in that case they do not report under
Regulation A but rather report under the Exchange Act. Also, Regulation A reporting company may file
a Form 10 which would then make the company subject to the full SEC reporting requirements
and terminate the lighter Regulation A reporting. Regulation A reports qualify as the type of
information a market maker would need to support the filing of a 15c2-11 application. Accordingly, an issuer that completes a Tier
2 offering could proceed to engage a market maker to file a 15c2-11 application and trade
on the OTC Markets. I am securities attorney Laura Anthony, founding
partner of Legal & Compliance, and producer of LawCast. Should you have any questions about today’s
topic, please visit SecuritiesLawBlog.com and LawCast.com, or contact me directly. Inquiries of a technical nature are always
encouraged.

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