A: Questions and Answers

Q:What is the main difference between the new Reg A and the old one?
A: $5 million versus $50 million.
Q: Limitations on investors?
A: None, under either new or old Reg A. State laws may apply.
Q: Filing requirements?
A: Form 1-A to the SEC for review is necessary for old Reg A. With new Reg A, you file the
same offering documents you are distributing to investors.
Q: States?
A: Blue Sky laws apply to both, ameliorated somewhat by the streamlined registration by
coordination processalthough if securities are sold on a national securities exchange (or are
offered or sold to a qualified purchaser) state law does not apply.
Q: How about re-sales?
A: No restrictions either way.
Q: What does test the waters mean?
A: It means you can use sales literature before filing your Form 1-A. With the new Reg A, it
means you can use sales literature before filing the offering statement.
Q: Financial statement requirements?
A: Under old Reg A, you need a current balance sheet and income statements for the last two
years and for any interim period. Financial statements must be prepared in accordance with
GAAP but do not have to conform to Regulation S-X and do not have to be audited. Under the
new approach, audited financial statements must be included in the offering documents, unless
the SEC approves differently.
Q: Disqualifications?
A: Felons and bad actors as defined by Securities Act Rule 262 are disqualified under old Reg A.
Felons and bad actors as defined by Section 926 of the Dodd-Frank Act are disqualified under
new Reg A.
Q: Reporting requirements?

A: Under old Reg A, there are no reporting requirements other than to disclose use of proceeds.
Under new Reg A, audited financial statements must be filed and given to investors annually
(and the SEC is permitted to ask for periodic disclosures).
Q: Other differences?
A: The new Reg A, Section 12(a)(2) of the Securities Act has heightened civil liabilities for
misrepresentation in offering documents such as PPMs. Further, the issuer must file audited
financial statements with the SEC each year.
Q: What is wrong with Reg A offerings?
A: Reg A offerings are expensive, especially with state compliance uncertainties, and they are
seldom cost effective for an offering under $5 million. Ideally, this is for a $50 million real estate
fund, say, looking for a relatively inexpensive form of IPO.
Q: Nomenclature confusion?
A: New Reg A is actually Reg A under 3(b)(2) of the Act. It is also referred to as Reg A+
while the old Reg A remains simply as Reg A. The new Reg A is also known as Title IV of the
JOBS Act.
Q: Pros and cons?
A: New Reg A is expensive and time consuming. It the most similar to full registration for an
issuer. It also has the most potential for the right issuer. Initiating a Reg+, while also pursuing a
Reg D 506 offering using Rule 506(b or the new Rule 506(c), is proving to be the way to go for
some issuers.
Q: Can I do a Reg S offering at the same time as a Reg A offering?
A: Yes.
Q: Can I register and offer securities on foreign stock exchanges, such as the BSE?
A: Yes. Regulation S provides a safe harbor for offers and sales of securities outside the United
States and includes a resale safe harbor. Securities must be sold in offshore transactions and there
can be no selling efforts directed toward the U.S. The SEC has said it will not integrate Reg S
offerings with domestic unregistered offerings that are in compliance with Rule 506, Rule 144A
and other applicable rules. Rule 144A permits general solicitation for re-sales as long as sales are
to qualified institutional buyers.
Q: How do I go about doing any of this?
A: Private Placement Advisors LLC has lawyers, paralegals, and securities licensees available to
help you design a program for raising funds.