Hey, everybody. My name is John Fischer. Welcome to salesleads.TV. Let’s talk about regulation A. You know, we’re going to do two things. We’re going to take artificial intelligence, take a look at what they got to say.
We’re going to take a look at my intelligence doing this for 32 years and see how much we agree with and how much we disagree with. So I’m going to decipher what this computer is saying. I got to tell you.
And I’m an old dog that can be taught new tricks. I love shifting. I love changing. And I just know that it’s cool to keep an open mind and learn. So without even reading this article, A, regulation A to me has always been an investment in that particular state.
So if you only picked a Florida residents, you could do what’s called a Reg A. And then there was certain rules and regulations depending on the state where you could advertise. So it was like making it easier for, let’s say, a guy like me who wants to take my company to the next level, sorry about that and raise some money without going through the whole craziness of the stock market or whatever.
Let’s see what they got to say and let the critiquing begin. Regulation A provision securities act of 1933 allows companies to raise up to 50 million through public securities offerings without having to register with the Security Exchange Commission.
Wow. Regulation A is also known as a mini IPO or Reg A, and is designed to make it easier for small, medium sized businesses to access capital market. I agree. Regulation provides two tiers of offerings.
Offerings of up to 20 million in a twelve month period. These offerings are subject to state security laws and are reviewed by the SEC. Tier two offerings of up to 50 million in a twelve month period.
These offerings. Are exempt from state security laws, but are subject to more stringent reporting requirements, including audited, financial statements, annual whenever we talk about big money, my notes get sentie annual and semiannual reports.
Ongoing Reporting Obligations to qualify for a Regulation A offering, a company must meet certain eligibility. Requirements must be organized in the United States. The company cannot have been subject to any SEC reporting requirements in the past two years.
The company must have a business plan and be able to demonstrate that it has the ability to raise capital and execute its business plan. That’s interesting that the company has the ability to raise capital.
The company must file a form one A offering statement with the SEC, which includes detailed information about the company’s business management team, financial statements, and other relevant information.
One of the main advantages of Regulation A is that it allow companies to raise capital from a wide range of investors, including both accredited and non accredited. Wow. Now that I didn’t know. This makes a popular choice for small and medium sized businesses that may not have access to traditional sources of financing, such as venture capital and bank loans.
Regulation A offerings also provide investors with a certain level of protection, as the offerings are subject to review by the SEC and must comply with certain disclosure and reporting requirements.
However, it’s important to note that Regulation offer is still subject to the market risk, and investors should conduct thorough due diligence before investing in any offering. I disagree with this one.
Provide investors with a certain level of protection. If the guy’s business goes belly up, where’s the protection? Number one number 290 percent of these types of raises go south. I mean, listen, they’re dangerous.
When a guy starts raising money for his own company and it’s never done it before, that’s pretty risky. Just remember that. Another advantage of Regulation A is offering is that they can be used to test the waters before launching a full public offering.
This means that companies can gauge investor interest in their offering before investing significant resources in a full public offering. That’s great. So what happens if you were one of the ones that invested and it didn’t work out?
There’s still risk. Risk involved. Regulation A offerings certain limitations and drawbacks. For example, the offering process can be time consuming and expensive. Companies may still face challenge in reaching a wide range of potential investors.
In addition, maximum amount that can be raised through a Regulation A is relatively small compared to traditional IPO, which is not sufficient for larger companies. In conclusion, Reggae Provision Securities Act allows companies to raise 50 million.
We already went through that. Medium sized businesses we went through that, however, have certain limitations. It doesn’t say anything about that. It’s only good for the actual state itself that you can only raise the money in that particular state.
But yeah, I get it. And yeah, it’s pretty much what I thought it to be. So we’re pretty much in sync when somebody calls me up and says we’re doing a Reg D and most of my stuff is Reg D and they’re doing 506 C, as in Charlie.
So let me take you back. Two, three years ago, they used to have the Regd 504 B, as in Boy. 504 was a million or less 505. One to 5,000,506 was 5 million plus. And you had to have a preexisting relationship and you have to have a 30 day corona period before you brought people in.
So even though there wasn’t a lot of enforcement on those rules, eventually the SEC came out with the Franked out, I believe it was and they went ahead and introduced the Reg D 506 C. You could solicit.
There was no more limitations. But the reg d 504. Had an exemption where you could bring in 50 non accredited the Reg D 506 C says, hey, everyone has to be accredited. And by the way, you know, we’re going to definitely enforce the accredited side.
There’s going to be some kind of a verification verification process. Now, I don’t know what’s ever happened with that. I mean, there’s like, accounting firms, they want your accountant to send you to send their financial statements.
You know, I think it’s gone, you know, simple enough to where they make the guy swear in his mother that he’s an accredited investor after reading the definition. But they’ve definitely tightened up on that, on the actual making sure that the guy isn’t a credit investor.
So if you were to do a Reg A, you would call me up and just say, hey, John, I’m doing a Reg A. I’m in the state of North Carolina, and I’d like to have some accredited investors in this area. What do you got?
And that would be something that we could work out. I got to tell you, those reggaes are rare. I hardly ever get calls from people doing reggae’s. But I just want you to know that they’re out there. I want to know want you to know what they are.
If you have any questions, feel free to call me. 561-239-0364 John Fisher salesmeak TV. Have a beautiful day and God bless.
