Going Public by Way of Regulation D (504) Offering

Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) provides three exemptions from the registration requirements, allowing some smaller companies to offer and sell their securities without having to register the securities with the SEC.

Rule 504 or Regulation D provides an exemption from the registration of the federal securities laws for some companies when they offer and sell up to $1,000,000.00 of their securities in any 12 month period.

A company can use this exemption so long as it is not a Blank Check company and does not have to file reports under the Securities Exchange Act of 1934. Also, the exemption generally does not allow companies to solicit or advertise their securities to the public, and purchasers receive restricted securities, meaning that they may not sell the securities without registration or an applicable exemption.

Rule 504 does allow companies to make a public offering of freely tradable securities but only if one of the following circumstances is met:

(1) The company registers the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors;

(2) A company registers and sells the offering in a state that requires registration and disclosure delivery and also sells in a state without those requirements, so long as the company delivers the disclosure documents required by the state where the company registered the offering to all purchasers (including those in the state that has no such requirements); or

(3) The company sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as the company sells only to "accredited investors.

An accredited investor is defined by federal securities law as:

. a bank, insurance company, registered investment company, business development company, or small business investment company;

. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;

. a charitable organization, corporation, or partnership with assets exceeding $5 million;

. a director, executive officer, or general partner of the company selling the securities;

. a business in which all the equity owners are accredited investors;

. a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase;

. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

. Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.

. even if a company makes a private sale where there are no specific disclosure delivery requirements, a company should take care to provide sufficient information to investors to avoid violating the anti fraud provisions of the securities laws. This means that any information a company provides to investors must be free from false or misleading statements. Similarly, a company should not exclude any information if the omission makes what is provided to investors false or misleading.

Any information provided to an investor whether written or oral must be accurate in order not to violate the anti fraud provision,All securities offerings are subject to this provision.

This process provide a far less expensive way to take your company public than the traditional IPO, and it also provide a much faster track to having your company's shares listed and trading.

The Regulation D (504) offering is one method of going public we recommend to our clients, we normally conduct a review of the company to see if going public is a viable option for them.

Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues.

For other option please visit our website: www.genesiscorporateadvisors.com

Email: josephquinones@genesiscorporateadvisors.com

In The News:


pen paper and inkwell


cat break through


Cash Flow: Why Chaos Equals Poor Cash Flow

Recently one of my customers told me the chaos swirling... Read More

Secrets to Washing Fleets of Trucks from a Nationwide Fleet Washing Service

Washing the exterior of a truck. Sounds easy right? Well,... Read More

Small Business Stress Buster: Completion not Perfection

Completion not Perfection Five Keys To Doubling Your Productivity and... Read More

Hard Money Lenders -- No Money Down The Easy Way

Would it help you as a real estate investor to... Read More

Do You Microbifer in Your Cleaning Business?

Microfiber cleaning towels have been around for about ten years... Read More

What is Rule 15c211 and Reverse Merger

Rule 15C211Under SEC Rule 15C211, a U.S. securities broker or... Read More

Small Businesses with BIG NAMES: Protect Your Trademarks and Reap the Rewards

You're a small business owner with a hot new product... Read More

Mission Statements: More Important Than You Thought

If an organization lacks a mission statement, it is worthwhile... Read More

Marketing Your Small Business - The Top 10 Brilliant Ideas

A Brilliant Marketing Idea... sounds great but what is it?... Read More

Seven Common Mistakes Made By Small Business Owners

Most new small businesses won't be in business this time... Read More

Six Essential Skills to Business Success!

The following are six essential skills to business success. You... Read More

Yeah, It IS Lonely At the Top

Sometimes when you run a business you feel as lonely... Read More

Specialty Advertising in C-Stores

It appears the mini-blimp indoor theme and concept is making... Read More

Do You Want Your Own Fully Programmable ERP? - Part 3

Continuing from the second article:6. About the aground mathematical model,... Read More

Small Business Ideas - Your Image Can Lose You Business

What image do you and your people portray to your... Read More

Are You Running Your Business or Is Your Business Running You?

Being a small or home-based business owner can be loads... Read More

Franchise Buyers from Hell

I ran a franchise company for many years, a car... Read More

Big Successes Never Happen Overnight

Treat your business as a serious, full-time business and be... Read More

How to Achieve Real Success in Business: Five Breezy Tips

Achieving real success should be the goal of any good... Read More

Site Selection - Slice of Life, A Car Wash and Detail Center DownTown

There is a continual trend we are seeing which I... Read More

How to Write a Credit Policy for Your Business

The book, "Become the Squeaky Wheel," by New Hampshire author... Read More

Discover How You Can Start Making Your Small Business Dream Come True

As a teenager I worked for my father's small business.... Read More

20 Great Ways to Market Your Business Locally

Whether your target audience is in your neighborhood or across... Read More

11 Things Small Business Owners Can Learn From Rudolph The Red-Nosed Reindeer

1. Everyone Makes A Difference ? Despite not letting him... Read More

Women and Small Business

In the book Women and Small Business author gives all... Read More

Small Business Computer Security, the Basics

Anyone in business today realizes both the natural dependency on... Read More

Are You Satisfied With Your Business Just As It Is?

Did you know that satisfaction is the number one emotion... Read More

Low Cost or Highly Funded Start Up

Many new ventures are preoccupied with all the money they... Read More

How to Find Success in the Import Export Business

Take advantage of world politics today and start your own... Read More

Retail Customer Opportunities for Pressure Washing Companies

Pressure washing companies must look for customers in the retail... Read More

Lawyers Everywhere Telling Regulators What Laws to Make

The Federal Trade Commission decided to sit down and revamp... Read More

How to Promote Your Business by Entering Contests

You are probably hard at work promoting your business (and... Read More

Survival Tips For Your Small Business

No matter type of business you operate you've got to... Read More