Under U.S. securities laws, an offering or sale of a security must be registered with the Securities and Exchange Commission (SEC) or meet an exemption. Regulation A is an exemption from registration requirements—instituted by the Securities Act of 1933—that applies to public offerings of securities. Companies utilizing the exemption are given distinct advantages over companies that must fully register. However, there are different tiers, depending on the size of the company, and companies must still file an offering statement with the SEC. The offering must also give buyers documentation with the issue, similar to the prospectus of a registered offering. Regulation A was updated in 2015 to allow companies to generate income under two separate tiers representing two different types of investments. Under Tier 1 (maximum of $20 million), companies don’t have ongoing reporting requirements but must issue a report on the offering’s final status. Under Tier 2 (up to $75 million), companies are required to produce audited financial statements and file continual reports, including its final status. Typically, the advantages offered by Regulation A offerings make up for the stringent documentation requirement. Among the advantages provided by the exemption can be streamlined financial statements without audit obligations, three possible format choices to use to arrange the offering circular, and no requirement to provide Exchange Act reports until the company has more than 500 shareholders and $10 million in assets.