Regulation A, Regulation S and Intrastate Offerings

The whole unit on one sheet: tier caps, residency tests, offshore clocks.

Which One-Liners Win Points?

• Regulation A still needs qualification. The Securities and Exchange Commission must qualify the offering statement, filed on Form 1-A, before any sale. Oral offers, a preliminary offering circular and testing-the-waters solicitations are allowed while it is on file.
• Tier 1 keeps state registration; Tier 2 preempts it. A Tier 2 security is a covered security: no state registration or merit review, though a notice filing still applies.
• Tier 2 reports; Tier 1 does not. Annual on Form 1-K, semiannual on Form 1-SA, current events on Form 1-U, plus a special financial report. Tier 1 files only an exit report on Form 1-Z within 30 calendar days.
• Eligibility: organized and headquartered in the United States or Canada, and not a blank-check shell, registered fund, mineral-rights issuer, delinquent filer or bad actor.
• Intrastate residency is two tests. An entity issuer must be organized in and headquartered in the state, and meet one of four doing-business tests: 80% of revenue, assets, or net proceeds used in-state, or a majority of employees.
• An entity buyer is resident on its principal place of business alone; a purpose-formed buyer only if every beneficial owner is in-state.
• Regulation S needs three things at once. An offshore transaction, no directed selling efforts in the United States, and any conditions the category adds. Aiming activity at the U.S. market is enough; it need not work.

Which Numbers Matter Most?

Which Gotchas Trip Students Up?

• The 12-month figure limits size; the two-year and three-year figures limit how long a continuous offering stays open, and only annual and semiannual filings keep it selling.
• The 30% cap covers only the first Regulation A offering and one qualified within a year of it.
• The 10% cap applies only to a Tier 2 offering not exchange-listed, and the issuer may rely on the purchaser's representation unless it knows at the sale it is false.
• The intrastate six-month clock runs per security, and a second offering in a different state waits six months from the prior offering's last sale.
• A purchaser's signed residency statement alone does not support reasonable belief.
• Offshore equity of a domestic issuer bought from the issuer, a distributor or an affiliate is restricted on acquisition, and the compliance period starts at the later of the first non-distributor offer and the closing.

One-Breath Recap

Three exemptions, three constraints. Regulation A is a qualified public offering: Tier 1 raises $20 million per rolling 12 months and keeps state registration, Tier 2 raises $75 million, preempts it but not the notice filing, caps a non-accredited purchaser at 10% of the greater of income or net worth, and files ongoing reports where Tier 1 files only an exit report. The intrastate exemption demands issuer residency, one of four 80% doing-business tests, in-state offers and sales, and a six-month resale limit. Regulation S needs an offshore transaction, no directed selling efforts, and its category conditions, with compliance periods from none to a year.

Need more than the recap? Read the full Regulation A, Regulation S and Intrastate Offerings unit.