Regulation A+ Audits
dbbmckennon provides independent audit services for companies raising capital through Regulation A offerings. We have significant experience working with emerging-growth companies using Regulation A as part of their capital-raising strategy, including issuers using Regulation A for a listing transaction on the OTC or a National Exchange such as NASDAQ or NYSE.
Our role is to serve as the independent auditor, focusing on the financial statement audit and related reporting requirements.
Audit Experience With Regulation A Offerings
Regulation A can provide companies with access to a broader investor base while creating financial reporting and audit requirements that differ from traditional private-company financing. Most small-cap IPO transactions raise amounts that are within the limits of Regulation A and can be a substitute or alternative path for a traditional IPO. This is particularly helpful with companies that have strong communities attached.
dbbmckennon has experience working with issuers at different stages of the Regulation A process, including companies preparing an offering statement, completing an offering, and transitioning into ongoing reporting or other public-market transactions.
Financial Statement Audits for Regulation A
The financial statements included in a Regulation A offering may need to be audited depending on the tier, filing requirements, and circumstances of the issuer.
Our team performs independent financial statement audits and related procedures required in connection with Regulation A offerings and works with management and securities counsel to coordinate timing and reporting requirements.
Emerging-Growth Company Experience
Many Regulation A issuers are emerging-growth companies with evolving operations, financing structures, and accounting issues.
Areas that can become significant during the audit include:
Revenue recognition
Equity and stock-based compensation
Convertible instruments and preferred equity
Debt and financing arrangements
Related-party transactions
Going concern considerations
Financial statement presentation and disclosures
Our team works with companies facing these issues while maintaining clear communication and partner involvement throughout the engagement.
From Regulation A to the Public Markets
Some companies use Regulation A as one step in a broader capital-markets strategy.
dbbmckennon has experience working with issuers that later pursue an IPO, uplisting, or other public-market transaction. That experience can be particularly valuable when a company’s reporting requirements become more complex over time.
For companies preparing to enter the public markets, see our IPO & Going-Public Company Audits page.
Why Regulation A Issuers Choose dbbmckennon
Significant Regulation A Experience
Regulation A is a specialized area of our audit practice, and we have worked with issuers using Regulation A as part of their capital-raising strategy. We are one of the few CPA firms that have a specialized practice for these offerings.
Emerging-Growth Company Focus
We understand the pace, financing structures, and reporting challenges that often accompany growing companies raising capital.
Partner Involvement
Our partners remain actively involved throughout the engagement and are available when significant audit or financial reporting matters arise.
Responsive Communication
Capital-raising transactions often operate on compressed timelines. We emphasize communication and coordination so audit issues can be identified and addressed early.
Frequently Asked Questions
Does a Regulation A offering require audited financial statements?
The answer depends on the specific Regulation A tier, filing requirements, and circumstances of the issuer. Companies should evaluate the applicable financial statement requirements early in the offering process. However, most companies pursue a Tier II offering, which does require audits for SEC filings.
Can dbbmckennon audit a company preparing a Regulation A offering?
Yes. We provide independent financial statement audit services for companies preparing and completing Regulation A offerings.
Does dbbmckennon work with Regulation A issuers that later pursue an IPO?
Yes. Our experience includes Regulation A issuers that later transition to an IPO or other public-market transaction. In fact, we have helped a number of clients who previously used non-PCAOB registered CPA firms for their original Regulation A offering. Upon transitioning to a IPO or other go-public transaction, these companies have to undertake a re-audit under PCAOB standards. That is why companies should contemplate a five year time horizon when selecting an audit firm.
Can dbbmckennon help prepare the Regulation A offering?
We serve as the independent auditor. We can coordinate with management and securities counsel regarding audit and financial reporting requirements, but we do not act as management, securities counsel, or placement agent.
Can dbbmckennon DRAFT MY FINANCIAL STATEMents for a Regulation a offering?
We serve as the independent auditor. Regulation A uses SEC level independence standards and accordingly, we cannot assist companies in drafting of financial statements similar to that of a private company that has no SEC reporting obligations. Companies must internally prepare, or retain an expert to prepare their financials and footnotes.
When should a company engage its auditor for a Regulation A offering?
Ideally, the auditor should be engaged early enough to evaluate the financial statements, audit timing, and reporting requirements before the offering timeline becomes compressed.
Talk With an Audit Partner
If your company is preparing a Regulation A offering or evaluating the audit requirements for a capital raise, we would be glad to discuss your situation.