MaloneBailey, LLP is expanding its service offering to include audit services to Regulation A+, Tier 2 companies as clients. MaloneBailey is a global, mid-market, public accounting firm based in Houston, Texas.
The new Regulation A rules, Title IV of the JOBS Act, were adopted by the Securities and Exchange Commission (SEC) in March of 2015 and affect Regulation A small public offerings, referred to as “Reg A+.” The rules allow companies to offer shares to the general public and raise the amount of capital a private company can raise in a Regulation A offering: Tier 1 can raise up to $20 million in a 12-month period and Tier 2 can raise up to $50 million in a 12-month period. Previously, offerings were capped at an upper funding limit of $5 million and companies could only crowdfund from accredited investors.
Since Reg A+ rules were adopted one year ago, over 100 companies have filed for approval. This number is expected to continue growing as crowdfunding becomes more and more popular.
“We’re excited that emerging companies have additional tools available to them for raising much needed capital,” stated Audit Partner Steven Vertucci. “We look forward to working with entrepreneurial led companies that are interested in taking advantage of Regulation A+. While the rules allow for companies under Tier 2 to have a US GAAS audit, MaloneBailey believes companies under Tier 2 will benefit more from a PCAOB audit considering many have plans to eventually do a registration statement and possibly uplist. Having the PCAOB audit for the tier 2 offering will save companies significant time and costs later when they do their registration statements.”
According to SEC Chair Mary Jo White, “These new rules provide an effective, workable path to raising capital that also provides strong investor protections. It is important for the commission to continue to look for ways that our rules can facilitate capital-raising by smaller companies.”