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: [email protected]

In The News:

Top 10 Business Books for Kids  Small Business Trends

Do You Love Food? - Then Maybe Opening a Restaurant is Not Such a Crazy Idea

The restaurant industry in the United States employs an estimated... Read More

13 Steps to Protect Yourself from Your Bank

The success of your business is critically dependent on how... Read More

Window Cleaning Business Start Up

Should you buy a business opportunity or Franchise if you... Read More

Book Yourself Solid Key #5: Go Forward With Gusto & Articulate What You Do

Want your small business to flip instead of flop?! Statistically... Read More

11 MONSTROUS Small Business Marketing Mistakes and How To Avoid Them

Increase your profit potential by identifying ? and avoiding ?... Read More

Professional Car Care Businesses You Can Start

If you are in the professional car care business you... Read More

Postcard Marketing ? Low Cost Visibility

You need to be visible to attract customers, right? But... Read More

10 Best Practices to Consider as Your SBIR Negotations Approach Contract Signature

10 Best Practices to consider as your SBIR negotiations approach... Read More

How To Start a Small Business

Not sure how to start a small business? This guide... Read More

Small Business Newsletter Dilemma: Which Day Do I Send?

If you're just ramping up your small business email newsletter,... Read More

Small Business Marketing - How Important Are Your First Words?

"What do you do?" It just might be one of... Read More

Build Credibility, Value, and Trust on a Shoestring

Setting priorities in your business? Your first job is to... Read More

Equipment Maintenance Manual for Mobile Cleaning Business Outline

Service Cleaning Businesses must maintain their equipment in order to... Read More

Mobile Carwash; Senior Citizens and Mobile Homes

Senior citizens are generally not a large marketing segment for... Read More

Top 7 Small Business Resources for 2005

If you want to start a business in 2005, and... Read More

Starting a Pressure Washing Business

Are you thinking of starting a small pressure washer business... Read More

Professional House Cleaning - The Dirty Little Secret

Are you tired yet of all the books out there... Read More

Franchising and Royalty Payments

If you are thinking of turning your current into a... Read More

Private Investigator Tactics

A Private Investigator is a professional trained in the art... Read More

Top 7 Small Business Tax Tips

Here are seven ways for owners of small businesses to... Read More

Tell Me The Reasons Why I Should Believe You?

Have you ever heard the phrase, 'PREPONDERANCE OF PROOF'?I recently... Read More

Data Loss - Can Your Company Survive? (Most Do Not)

Data. Most people think it is a term relegated to... Read More

There Are No Dumb Business Questions, Not!

Q: I'm curious. What is the dumbest business question you've... Read More

Five Simple Software Tips for Small Business Owners

The start of a new year is a time for... Read More

The Benefits of Using Freelance Consultants / Trainers for Your Project

What are the benefits of using a Freelance Consultant /... Read More