| The Small Corporate Registration was designed | | | | works best when offered directly to targeted |
| specifically for small businesses. It allows | | | | group.These groups are referred to as |
| small companies to raise equity or debt | | | | affinity groups or groups that have some type |
| capital publicly without having to register | | | | of connection with the company, its product |
| with Securities and Exchange Commission. It | | | | or it services. A company that can easy |
| is designed to streamline the state review | | | | contact its customer has an advantage over |
| process by using standardized forms and | | | | one that may have many customers but no |
| reviews. Each states separately reviews the | | | | information on them at all. For example a |
| company's filings and issues a permit | | | | company in the medical field may target |
| allowing general solicitation to the public | | | | doctors, but since it is impossible to know |
| in that state.Permits are generally issue | | | | all the doctors in the area it may need to |
| within 30 days ( in Nevada) or it may take up | | | | purchase a list of doctors from a direct mail |
| six months (as is the case in California) | | | | company.Regulation D 504 does not require |
| depending on each state's regulatory | | | | audited financial but you can only sell to 35 |
| standard.This form of registration is | | | | non-accredited investors the rest must be |
| available to small securities issuers | | | | accredited. |
| pursuant to Regulation D, Rule 504, of the | | | | |
| Securities and exchange Act of 1933, as | | | | Soliciting and advertising for investors is |
| amended.It allows small companies to be able | | | | not allowed.An accredited investor: |
| to raise up to one million dollars in equity | | | | |
| financing with certain limitations and | | | | · A natural person who has individual net |
| guidelines. This program is known as | | | | worth, or joint net worth with the person's |
| Registration By Exemption because it is | | | | spouse, that exceeds $1 million at the time |
| basically a hybrid between a public offering | | | | of the purchase. |
| and a private placement.This type of offering | | | | |
| is often referred to as DPO, or Direct Public | | | | · Accredited investors are natural |
| Offering because the stock can be sold to the | | | | persons with income exceeding $200,000 in |
| public without the use of an underwriter or | | | | each of the two most recent years or joint |
| agent (Broker). These securities can also be | | | | income with a spouse exceeding $300,000 for |
| sold to the public and be resold into | | | | those years and a reasonable expectation of |
| established secondary market.Under an SCOR | | | | the same income level in the current year. |
| offering a company can advertise for | | | | |
| investors, and sell securities to anybody who | | | | · A broker/dealer registered with the |
| expresses an interest, this provides a great | | | | Commission under the Exchange Act purchasing |
| advantage over a 504 offering where the | | | | for its own account as an investment is |
| offering is restricted to only 35 | | | | included. [Rule 501(a)(1)]. |
| non-accredited investors.Being able to list | | | | |
| the securities on the Nasdaq Bulletin Board | | | | · A trust with assets in excess of $5 |
| or the Pink Sheets is another positive for | | | | million, not formed to acquire the securities |
| DPO's because it makes the investment more | | | | offered, whose purchases a sophisticated |
| liquid and appealing to investors.You can | | | | person makes. |
| anticipate receiving comments from examiners | | | | |
| in many of the states in which registration | | | | · A charitable organization, corporation, |
| is sought, depending on the regulatory | | | | or partnership with assets exceeding $5 |
| approach taken by the state, those comments | | | | million. |
| may be limited to request for disclosure of | | | | |
| additional information or may require certain | | | | · A director, executive officer, or |
| terms of the offering to be modified with the | | | | general partner of the company selling the |
| states fairness laws.Failure to resolve | | | | securities. |
| outstanding comments can lead to denial of | | | | |
| application for registration by the state. | | | | Regulation D 504 Is easy, fast and |
| The states may make applicable substantive | | | | inexpensive to prepare. No underwriter, |
| fairness standard as an appendix to the | | | | broker or agent is required, stock may sold |
| filing instructions or make use other means | | | | company employees.None of these type |
| to make the available.SCOR offering may be | | | | offerings are one-sized fits all each must be |
| done in selected states and it requires | | | | evaluated on its own merit and the needs of |
| audited financial statements. An experience | | | | the company. Nor are these the only |
| securities lawyer is required, one that is | | | | options.Upon completion of the offering the |
| familiar with the process and is familiar | | | | company must request for a Market Maker to |
| with states requirements.The issuer must be | | | | file a 15c211 to have the shares of the |
| incorporated since it will selling stock in | | | | company publicly quoted.For additional |
| the corporation, It must have a Business Plan | | | | information please visit: Quinones, |
| because much of the information required in | | | | President of Genesis Corporate Advisors has |
| the offering circular can be taken from the | | | | spent over 25 years in the securities |
| business plan.A company should gauged | | | | industry. In 1992 he founded JDQ Financial |
| investors interest in the offering before | | | | Group, Inc. and proceeded to build it up from |
| launching a DPO. Some of the advantages of a | | | | a one Man operation to the point where it |
| DPO are that it be advertise to the public, | | | | employed many traders, advised numerous |
| the company can solicit investors, and it | | | | client, and generated millions in revenues. |