Tier 1 and Tier 2. A public offer or sale of eligible securities, as defined in
Rule 261 (§ 230.261), pursuant to Regulation A shall be exempt under section 3(b) from the registration requirements of the Securities Act of 1933 (the “Securities Act”)
(15 U.S.C. 77a et seq.).
Tier 1. Offerings pursuant to Regulation A in which the sum of all cash and
other consideration to be received for the securities being offered (“aggregate offering price”) plus the gross proceeds for all securities sold pursuant to other offering statements within the 12 months before the start of and during the current offering of securities (“aggregate sales”) does not exceed $20,000,000, including not more than $6,000,000 offered by all selling securityholders that are affiliates of the issuer (“Tier 1 offerings”).
Tier 2. Offerings pursuant to Regulation A in which the sum of the aggregate offering price and aggregate sales does not exceed $50,000,000, including not more than
$15,000,000 offered by all selling securityholders that are affiliates of the issuer (“Tier 2 offerings”).
Additional limitation on secondary sales in first year. The portion of the aggregate offering price attributable to the securities of selling securityholders shall not exceed 30% of the aggregate offering price of a particular offering in:
The issuer’s first offering pursuant to Regulation A; or
Any subsequent Regulation A offering that is qualified within one year of the qualification date of the issuer’s first offering.
NOTE TO PARAGRAPH (a). Where a mixture of cash and non-cash consideration is to be received, the aggregate offering price must be based on the price at which the securities are offered for cash. Any portion of the aggregate offering price or aggregate sales attributable to cash received in a foreign currency must be translated into United States currency at a currency exchange rate in effect on, or at a reasonable time before, the date of the sale of the securities. If securities are not offered for cash, the aggregate offering price or aggregate sales must be based on the value of the consideration as established by bona fide sales of that consideration made within a
reasonable time, or, in the absence of sales, on the fair value as determined by an accepted standard. Valuations of non-cash consideration must be reasonable at the time made. If convertible securities or warrants are being offered and such securities are convertible, exercisable, or exchangeable within one year of the offering statement’s qualification or at the discretion of the issuer, the underlying securities must also be qualified and the aggregate offering price must include the actual or maximum estimated conversion, exercise, or exchange price of such securities.
Issuer. The issuer of the securities:
Is an entity organized under the laws of the United States or Canada, or any State, Province, Territory or possession thereof, or the District of Columbia, with its principal place of business in the United States or Canada;
Is not subject to section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78a et seq.) immediately before the offering;
Is not a development stage company that either has no specific business plan or purpose, or has indicated that its business plan is to merge with or acquire an unidentified company or companies;
Is not an investment company registered or required to be registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or a business development company as defined in section 2(a)(48) of the Investment Company Act of 1940
(15 U.S.C. 80a-2(a)(48));
Is not issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;
Is not, and has not been, subject to any order of the Commission entered
pursuant to Section 12(j) of the Exchange Act (15 U.S.C. 78l(j)) within five years before the filing of the offering statement;
Has filed with the Commission all reports required to be filed, if any, pursuant to Rule 257 (§ 230.257) during the two years before the filing of the offering statement (or for such shorter period that the issuer was required to file such reports); and
Is not disqualified under Rule 262 (§ 230.262).
Integration with other offerings. Offers or sales made in reliance on this Regulation A will not be integrated with:
Prior offers or sales of securities; or
Subsequent offers or sales of securities that are:
Registered under the Securities Act, except as provided in Rule 255(e) (§ 230.255(e));
Exempt from registration under Rule 701 (§ 230.701);
Made pursuant to an employee benefit plan;
Exempt from registration under Regulation S (§§ 230.901 through 203.905);
Made more than six months after the completion of the Regulation A offering; or
Exempt from registration under Section 4(a)(6) of the Securities Act (15
U.S.C. 77d(a)(6)).
NOTE TO PARAGRAPH (c). If these safe harbors do not apply, whether subsequent offers and sales of securities will be integrated with the Regulation A offering will depend on the particular facts and circumstances.
Offering conditions—(1) Offers. (i) Except as allowed by Rule 255 (§ 230.255), no offer of securities may be made unless an offering statement has been filed with the Commission.
After the offering statement has been filed, but before it is qualified:
Oral offers may be made;
Written offers pursuant to Rule 254 (§ 230.254) may be made; and
Solicitations of interest and other communications pursuant to Rule 255 (§ 230.255) may be made.
Offers may be made after the offering statement has been qualified, but any written offers must be accompanied with or preceded by the most recent offering circular filed with the Commission for such offering.
Sales. (i) No sale of securities may be made: