Under federal securities law, any offer or sale of a security must be registered with the SEC, unless it falls under one of the exemptions, such as Regulation D of the Securities Act. Regulation D affords some companies the ability to offer and sell their securities without having to register the offering with the SEC (i.e. "exempt offerings").
Recently, after notice of proposed rulemaking and comment, the SEC changed Regulation D rules as it relates to the information that the issuer must furnish to non-accredited investors under Rule 506(b). Prior to the rule change, issuers were required to furnish the information required by Rule 502(b), including audited financial statements. As of March 15, 2021 the Regulation D offering conforms with the financial statement information requirements of Regulation A, and offerings of up to $20 million need not be accompanied by an audited financial statement, unless the issuer has already obtained an audit for another purpose. The new requirements also loosen the restrictions on the age of the financial statements that must be provided to non-accredited investors.
Ultimately, the SEC desired aligned disclosure requirements to rid the disclosure requirements of the unnecessary burden of audited financial statements and to expand investment opportunities for issuers to include non-accredited investors in their offerings. Compliance cost savings in the offering process and expanded access to external financing are expected to enhance shareholder value and thus benefit the issuer's existing shareholders, per the SEC.