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