How many investors are allowed in Regulation A+?
Reg A+ provides an exemption for securities issued in a Tier 2 offering from the registration requirements of Section 12(g) of the Exchange Act as long as the issuer (the company selling shares) uses a registered transfer agent for the offering, remains subject to and current in its Tier 2 SEC reporting obligations, and had a public float of less than $75 million as of its most recently completed semiannual period (or for an issuer without a public float, annual revenues of less than $50 million as of its most recently completed fiscal year).
Without this exemption, Section 12(g) would otherwise require the issuer to comply with public company reporting obligations once a class of equity securities is held of record by more than 500 holders who are not accredited investors or who did not receive the securities under a compensation plan. An issuer that exceeds both the exemption’s public float or revenue threshold and Section 12(g)’s 500 holders threshold would be granted a two-year transition period before being required to register its securities under Section 12(g). This would be an S1 public registration.