02 Nov Reg A+ Deals Getting Done

Today I’m attending the Practising Law Institute’s Securities Regulation Institute, the annual educational gathering of mostly big law firm securities lawyers. Keith Higgins, the SEC’s very capable head of Corporation Finance, disclosed some interesting stats on how Regulation A+ is going.

So far, since the new rules were approved in June 2015, there have been 65 Tier I and 71 Tier II filings by companies seeking to complete a Reg A+ IPO. Of those, 76 have been approved and “qualified” to raise $1.4 billion. To date 14 issuers have actually closed on Reg A+ financings raising $172 million. Of that, $140 million were in Tier II deals and $32 million in Tier I. That’s an average of $12.3 million raised per IPO. As we know, Tier I offerings can raise up to $20 million and Tier II offerings can raise any amount (even below $20 million) up to $50 million.

So it’s working. In barely a year hundreds of millions raised in this new regime. There are a number of pending deals planning to list on a national exchange, while others are happy to pursue an OTC listing. Once the first few larger deals to exchanges are completed, my prediction is a number of leading underwriting firms will jump into the space. Stay tuned!