Over the time, SEC has adopted various exemptions intended to reduce the complexities of registering the securities that may impede raising the capital for issuers. We have laid out a few exemptions from registrations that are widely considered.

What are SEC Reg A+, SEC Reg D, and Reg S?
Reg A was updated in 2015 as part of the Jumpstart Our Business Startups (JOBS) Act, now known as SEC Reg A+. Reg A+ allows companies to generate income under two separate tiers, Tier 1 and Tier 2, representing two different types of investments. Regulation A+ can be assumed as a substitute for a small registered IPO. It is an exemption from the registration requirements that allow companies to offer and sell their securities without registering their offering with the SEC.

Regulation A + is bifurcated into two offering tiers: Tier 1, for offerings of up to $20Mn in 12 months; and Tier 2, for offerings of up to $75Mn in 12 months. For offerings of up to $20 million, companies can choose to proceed either with Tier 1 or Tier 2.

Ongoing compliance and reporting:

Both the offerings from Tier 1 and Tier 2 financial statements are required for at least the last two fiscal years or since the company’s inception if it is less than two years old.
The offerings listed under Tier 2 require the statements to be professionally and independently audited according to generally accepted auditing standards (GAAS) or as per the Public Company Accounting Oversight Board (PCAOB) standards.
Tier 1 offerings are spared with the ongoing reporting regime; only the exit report (Form 1-Z) is obligatory to be filed within 30 days after the offer’s closing.
Filing of annual (Form 1-K) and semi-annual (form 1-SA) reports on an ongoing basis is mandatory for the issuers conducting Tier 2 offerings. In addition, they are also supposed to file the current event reports (Form 1-U) whenever certain changes to the business occur.