What a Reg A+ company owes the SEC after the raise

A Reg A+ raise does not end when the money arrives. A Tier 2 company files an annual report on Form 1-K within one hundred twenty days of its fiscal year end, a semiannual report on Form 1-SA within ninety days of the end of its first six months, and a current report on Form 1-U within four business days of certain major events. A Tier 1 company owes far less: one exit report, Form 1-Z. Miss the Tier 2 reports and the cost shows up later, when you try to raise again and find the exemption closed to you.

This post is the calendar after the close, written for the people who will have to talk to investors about what the filings say. The filings themselves are drafted by your accountants and securities counsel.

At a glance

All of them are filed on EDGAR, the same place the Form 1-A and offering circular live. None of them is reviewed and approved the way the offering statement was during qualification. Filing is the obligation, and accuracy is the standard.

Form 1-K: the annual report

Form 1-K is the Tier 2 annual report. It is due within one hundred twenty days of the end of each fiscal year, starting with the fiscal year in which the offering statement was qualified. It carries audited financial statements and a discussion of the business, its results, and its management, much like an updated version of the offering circular.

The audit is the long pole. A company with a December year end has until the end of April, and the auditors need weeks of that. Book them before the year closes, not after.

What it means for the campaign: the 1-K is the most complete thing you will publish about the company all year, and every investor, every future investor, and every journalist who checks will read it next to whatever you say in marketing. If your updates have been cheerful and the 1-K is grim, the gap is the story. Write the year's investor updates as if the 1-K will be read beside them, because it will.

Form 1-SA: the semiannual report

Form 1-SA is due within ninety days after the end of the first six months of the fiscal year. It carries interim financial statements, which do not have to be audited, and a shorter discussion of results.

What it means for the campaign: it is a scheduled checkpoint halfway between annual reports. Use it. A short investor note that walks through the 1-SA in plain language does more for trust than the filing alone, which most investors will never open.

Form 1-U: the current report

Form 1-U is due within four business days of certain events. The list is specific and narrower than people expect. It includes a fundamental change in the business, a bankruptcy or receivership, a material modification to the rights of security holders, a change in the company's auditor, a change in control, departures of principal executive or financial officers, a non-reliance on previously issued financial statements, and unregistered sales of equity securities that add up to ten percent or more of the outstanding shares of the class sold. Counsel decides whether a given event triggers the form. Do not make that call in a marketing meeting.

What it means for the campaign: four business days is fast. A Form 1-U event is usually also the biggest news the company will have that year, and investors should not learn it from EDGAR first or from a comment thread. Have a plan for who drafts the investor message, who approves it, and how it lines up in time with the filing. If you are mid-raise when it happens, the event is also an offering problem, which is its own post: campaign-updates-material-changes.

Tier 1: one exit report

A Tier 1 company has no annual or semiannual reporting. It files Form 1-Z within thirty days after the offering terminates or is completed, reporting what was sold and for how much. That is the whole ongoing obligation at the federal level.

The lighter load is real, but it is one line in a longer comparison. Tier 1 is not preempted from state review, and it caps at twenty million dollars. For the full trade, read reg-a-plus-vs-reg-a and blue-sky-preemption-in-reg-a.

How a Tier 2 company stops reporting

Tier 2 reporting does not run forever, but it does not end on its own either. A company suspends it by filing Form 1-Z, and Rule 257(d) allows that only when the conditions line up. In general:

• the class of securities is held of record by fewer than three hundred persons;
• the company has filed every report it owed for the shorter of the period since it became subject to the rules, or its most recent three fiscal years and the current year;
• a Tier 2 offering statement was not qualified during the current fiscal year, and the company has filed the annual report for the year in which one was; and
• no Tier 2 offering of that class is ongoing.

The record-holder count is where crowd raises get stuck. A successful Tier 2 raise often leaves thousands of holders of record, and that number does not fall below three hundred by itself. How you hold the cap table affects this, which is covered in cap-table-thousands-of-investors.

A company that registers a class of securities under the Exchange Act and becomes a fully reporting company also stops filing Regulation A reports under Rule 257(b)(6), because the Exchange Act reports replace them. That is a different and much heavier regime, and a decision for the board and counsel, not a reporting shortcut.

What missing a report costs

Three things, in rising order of pain.

Credibility with your own investors. A late annual report is visible. Investors who checked EDGAR on day one hundred twenty one notice, and some of them say so in public.

The next Regulation A raise. A company that has not filed the Regulation A reports it was required to file during the two years before a new offering statement is not eligible to use Regulation A. So a Tier 2 company that lets its reporting lapse can find, when it is ready to raise again, that the exemption it built its investor base on is not available. This is the cost founders tend to discover too late. See raising-again-from-your-investors for why the second raise matters as much as it does.

The Reg CF fallback, too. Regulation Crowdfunding has a parallel rule. A company that has not filed the Reg CF annual reports it owed during the two years before a new Form C is not eligible to use Reg CF. A company that ran both kinds of offering can close both doors with the same habit.

Whether a specific late filing has these consequences, and whether anything can be done about it, is a question for securities counsel. The safe assumption is that a missed deadline is expensive and a cured one is still on the record.

Reg CF in one section: Form C-AR

A Reg CF company has one ongoing form, the annual report on Form C-AR. It is due within one hundred twenty days of fiscal year end, filed on EDGAR and posted on the company's website, every year until the obligation ends. The obligation ends on a Form C-TR when one of the conditions in Rule 202 is met, for example fewer than three hundred holders of record after at least one annual report, or three annual reports filed and total assets of ten million dollars or less. There is no semiannual report and no current report. The full calendar, including what C-AR has to contain, is in reg-cf-forms-explained.

Treat every report as an investor communication

The filings are legal documents. They are also the most credible thing the company publishes, and the only one that arrives on a schedule nobody can postpone. A company that uses them well does four things.

It puts the dates on the calendar the day the raise closes. Fiscal year end, the 1-K deadline, the half year, the 1-SA deadline. Work backward from each for the audit, the draft, and the investor note.

It sends the plain-language version alongside. Most investors will not read a 1-K. A short update that says what changed, what the numbers were, and what comes next reaches them. It must match the filing, and counsel should review it.

It keeps the story consistent. Updates, social posts, and the reports should describe the same company. The quickest way to lose an investor base is a mismatch between the good news in the newsletter and the risk factors in the filing.

It plans the next raise around the reporting record. Investors who received clear, timely reports are the warmest audience a company will ever have. Investors who had to chase them are not.

The part your lawyers and accountants decide

Which events trigger a Form 1-U, what the financial statements must contain, whether the company qualifies to suspend reporting, and what to do after a missed deadline are not marketing questions. Settle them with securities counsel and the auditors, and build the communications plan around their answers.

This is general information, not legal advice. What your company must file, and when, is a question for your own securities counsel.

FAQ

What reports does a Reg A+ Tier 2 company file after the offering?

An annual report on Form 1-K within one hundred twenty days of fiscal year end, a semiannual report on Form 1-SA within ninety days after the first six months of the fiscal year, and current reports on Form 1-U within four business days of certain major events.

Does a Tier 1 Reg A company have ongoing reporting?

Not at the federal level. A Tier 1 company files an exit report on Form 1-Z within thirty days after the offering terminates or is completed. State requirements can still apply, because Tier 1 offerings are not preempted from state review.

When can a Tier 2 company stop filing reports?

When the class is held of record by fewer than three hundred persons, it is current on the reports it owed, it has filed the annual report for the year its Tier 2 offering was qualified, and no Tier 2 offering of that class is ongoing. It then files Form 1-Z. Counsel should confirm eligibility first.

What happens if a Reg A+ company misses its reports?

Beyond the damage to investor trust, a company that has not filed its required Regulation A reports during the two years before a new offering statement cannot use Regulation A for that offering. Reg CF has a parallel rule for missed annual reports.

Do the reports have to be sent to investors?

They are filed publicly on EDGAR, which is what the rules require. Sending investors a plain-language summary alongside each report is not required, but it is the cheapest trust a company can buy, as long as it matches the filing.