Mina Mar Group

Simply put general solicitation is an act of marketing capital raise publicly, but things are mot that simple. General solicitation is not precisely defined in statues and rules so Securities and Exchange Commission (SEC) takes case by case approach in case of violation "no general solicitation' requirement of Rule 506(b). It all started with JOBS Act in 2012, with purpose to make securities regulations friendlier form small businesses. General solicitation was banned since 1933 and Securities Act of 1933 in order to protect investors from scams and frauds. The Jobs Act required from SEC to amend existing and create new exemptions that will permit issuers of securities to raise capital without SEC registration. On July 19, 2013 SEC adopted amendments to Rule 506 of Regulation D. Another Rule of the same regulation, 506(b) provided issuer with conditions to rely on in order to met requirements of Section 4(a)(2) of Securities Act that exempts from registration "tr...

Restricted stock or restricted securities is unregistered stock that is not fully transferable until certain conditions are met and they must be traded in compliance with SEC regulations. After the conditions are met stock is no longer restricted and it becomes transferable.  Restricted stocks are often given to employees as a compensation that typically become transferable after certain conditions are met like continued employment for a period of time before vesting or achievement in particular product-development milestones, earning per share goals or other financial targets. Restricted stock is also given to corporate insiders like directors and executives, often after merger and acquisition, underwriting and affiliate ownership  to prevent early selling of stock that could negatively affect the company. Corporate affiliates can also lose the right on stock if they leave the company, fail to meet certain performance goals or break SEC trading restriction rules. Con...

Private placement memorandum also known as offering memorandum is the most important document for any private company that is raising capital. Such sale of stock, bonds or other securities directly to selected private investors is called private placement. Unlike company that is raising capital via traditional IPO and becomes publicly traded, company that utilizes private placement remains private. Private placement memorandum can be compared to prospectus in public offerings and its purpose is to provide prospective buyers with needed information. Offering memorandum gives in depth look at business and its operations explaining nature of business, terms of investments, potential risks and management among other things. Sometime it can be compared to thorough business plan but there is a difference. Business plan often has marketing purpose created to promote the company and attract investors. On the other side private placement memorandum is more factual and descriptive in t...

Direct public offering also known as direct listing or direct placement is a type of offering where company offers securities directly to public in order to raise capital. It is considered alternative to initial public offering but unlike in IPO company that uses direct listing eliminates intermediaries like investment banks that underwrite stock, making stock price dependent on the market. In direct listing employees and early investors convert their ownership into stock that is then offered to the public meaning that no new shares are issued which stops stock dilution. Because in DPO middle man in form of investment banks, broker-dealers and underwriters is eliminated it enables issuer to sell shares quickly, without the lockout period. It also makes the offering cheaper because there is no underwriting fees to pay and faster because there is fewer thing to manage than in traditional IPO. Underwriters  not only set the IPO price but they also organize roadshows, fil...

Special purpose vehicle/entity (SPV/SPE) is separate legal entity created by an  organization for specific, often narrow and temporary purpose, typically to isolate company from financial risk, including bankruptcy.It can be understood as subsidiary of larger company but it has its own assets and liabilities. There are several uses of special purpose vehicles. Because every project carries certain amount of risk parent company will use SPV to shield itself from risk in a legal way. This way companies can execute large financial projects without putting the whole firm at risk. Securitization of loan is another common usage of SPVs. It is used when banks that issue mortgage-backed securities whose payment comes from pool of loans. In order to ensure that investors in mortgage-back securities are payed first bank will establish SPV, separating it from other obligations and giving it a priority in payment. Management of assets with exceptionally complex financial ...

On July 10, 2013 the Securities and Exchange Commission adopted bad actor disqualification provision for Rule 506 of Regulation D under Securities Act of 1933, to implement Section 926 of Dodd-Frank Wall Street Reform and Consumer Protection Act. The disqualification and related disclosure provision appear as paragraphs (d) and (e) of Rule 506, of Regulation D. The Bad Actor rule prohibits company (the issuer) to use registration exemption if the issuer or any other associated person has been convicted of or subjected to judicial or regulatory sanctions for certain violation of U.S law. Exemption from registration under Regulation D helps thousand of businesses to raise capital worth billions of dollars. T he “Bad Actor” rule is codified as new paragraphs (d) and (e) to Rule 506.  Rule 506(d) provides that the exemptions in Rule 506(b) and Rule 506(c) are not available if the issuer or any associated person is statutorily disqualified. This includes all of the following: ...

In February 2019 Securities and Exchange Commission voted to propose a new Securities Act Rule 163B that would permit any issuer to engage in oral or written communication with potential investors that are, or are reasonably believed to be, qualified institutional buyers and institutional accredited investors either prior or following the filing of registration statement. This means the expansion of the JOBS act, which created Section 5(d) of Securities Act that permits only emerging growth companies to engage in communication with investors prior or following the filing the registration statement of the offering. Companies that have more than $1 billion in annual revenues cannot qualify as emerging growth companies and use the benefit of "test-the-waters" provision. The new rule will extend it beyond EGC to all issuers, including investment company issuers. The proposal from the SEC follows action taken by The Division of Corporate Finance in July 2017 to allow all ...

Jumpstart Our Business Startups Act or JOBS Act is a law that former president Barack Obama signed on April 5, 2012. The purpose of the act is to increase ability of small businesses to raise capital and generate jobs but also improve financial opportunities for all American citizens and not just wealthy investors. Of all seven titles of the bill Title III that refers to crowdfunding drew most attention. Provisions of the bill made easier for companies go public but also to raise capital and stay private longer. Act defined the term emerging growth company as a company that has less than $1 billion total annual gross revenue in recent fiscal year. The JOBS act provided such businesses with temporary relief from certain SEC requirements which made taking your company public a lot easier. The most significant relief are the exemption from audit of internal controls required under Section 404(b) of the Sarbanes-Oxley Act of 2002. It allowed new exemptions from registratio...

C anadian Stock Exchange or CSE, operated by CNSX Markets Inc. is an alternative stock exchange In Canada, recognized as such in 2004. The CSE represents itself as an exchange for entrepreneurs that offers alternative and easier access to capital market. This is done through simple and precise rule book that makes listing quick and relatively inexpensive. The exchange is fully automated which means that floor trading method is not preferred.  Taking your company public by listing it on CSE gives you an opportunity to explore Canadian strong capital market and raise capital that will help your business grow. As publicly traded company on Canadian capital market will raise your corporate profile and draw attention of investors willing to invest in your company. In order to become publicly traded company in Canada company must become reporting issuer with one or more  of the Provincial Securities Commissions which means it is subject to ongoing public disclosure and...

In addition to federal securities laws, every state has its own securities laws, commonly known as Blue sky laws that are designed to protect investors from fraudulent and overly speculative investments. While these laws vary from state to state but they are modeled after Uniform Securities Act of 1956 which provides guidance for the states in making their own securities legislation. Most state laws require from companies that offers securities to register the offering before they can be sold unless there is exemption. Each state has the regulatory agency that administers its blue sky law and most of them ensure private cause of action for private investors harmed by securities fraud. Issuers of securities must reveal terms of the offering where they fully and fairly disclose all material facts related to the offering. Because they differ among states it means that each jurisdiction can have different filing requirements.State law also cover merit review that regu...

OTC Market Group is American financial market with headquarters in New York City that provides price and liquidity information for almost 10,000 over-the-counter securities. Stating that they recognize that companies come in different shapes, sizes and stages of development so one standard is not suitable for all OTC Market Group has three different market tiers: OTCQX, OTCQB and Pink. Each tier have different standards, reporting requirements and level of disclosure. Pink market tier is considered the lowest because it doesn't have financial standards or reporting requirement. Stock in Pink tier are not required to be registered with the SEC. Companies have the opportunity to upgrade their status to OTCQB market if they met certain requirements, giving investors most current information possible while reducing the trading limits and restrictions companies may face on the Pink Market. OTCQB Venture Market, middle tier in OTC Market Group, is for early-stage developing ...

NASDAQ or the National Association of Securities Dealers Automated Quotations is an American stock exchange, second largest stock exchange in the world after New York Stock Exchange (NYSE) in terms of market capitalization. It was founded in 1971 as the world's first electronic stock market. In 2006 Nasdaq changed its status from a stock market to a licensed security exchange. With approximately 3,900 listings Nasdaq has market capitalization of around $10 trillion from various industry sectors like technology,  telecommunication, healthcare and financials. Nasdaq's normal trading sessions are between 9:30 a.m. and 4:00 p.m. Eastern Standard Time and offers quotes at three levels. The Nasdaq stock market has three distinctive tiers: The Nasdaq Global Select which consist of U.S. based and international stocks that represent the Global Select Market Composite. It has the most stringent financial and liquidity requirements. The Nasdaq Global market includes stock that...

The term penny stock refers to securities that usually trade at over the counter market at less than $5 per share. Such stocks are mostly issued by smaller companies whose shares trade on OTC Markets or less frequently on OTC Bulletin Boar. Penny stock are also considered highly speculative, with small market capitalization, lacking liquidity and disclosures urging Congress to prohibit broker-dealers from effecting transactions in penny stocks unless they comply with the requirements of Section 15(h) of the Securities Exchange Act of 1934 also known as Penny Stock Rule. To comply with the requirements of Section 15(h) of Securities and Exchange Act broker-dealer must: approve the customer for the specific penny stock transaction and receive a written agreement to the transaction furnish the customer a disclosure document describing the risks of investing in penny stocks disclose to the customer the current market quotation, if any, for the penny stock disclose to the ...

Investing strategy can be understood as set of rules that guide investor in his decisions regarding investment portfolio. Investors use strategies to balance risks and rewards in accordance with his risk tolerance investing goal and investment horizon. Taking time to understand which strategy suits you the best can also help you avoid unwanted expenses. You can look at it as existence of two extremes where on one side are investment strategies that seek rapid growth which includes greater amount or risk and on the other side is low risk strategy with regular dividends payment that is more concentrated on wealth protection. In other words there is always some kind of  trade off between risk and return on investment and most investors are not in the one of those two extremes but somewhere in between. You should honestly assess your current financial situation, your expenses and debt and how much you are able to invest. Investors using value inves...

An exchange traded fund is an investment fund that comprises different securities and is traded on exchange much like a stock. This type of fund track stock or bond index like Standard&Poor's. Similarly like mutual funds ETFs have mixed portfolio consisting of various types of securities like stocks, bonds and commodities. Funds hold different underlying assets that are divided in shares with attached price which makes them marketable security that trades on exchange so its price can change during the trading day. Exchange  traded funds differ depending on their focus on different aspects of the market. Some funds have stock from hundreds and even thousands different industries while some other may focus on one particular industry  sector. In the same manner some are interested in exclusively on U.S. securities while others have more global approach. Some examples of ETFs are bond ETFs that include different types of bonds (government, corporate and...

When trying to learn any skill and reach excellence, mistakes are the natural part of process. There is no way around it, but beginner investor are usually more prone to making these mistakes. Even famous and successful investor have made some of these mistakes at least once. We will look over some of the most common mistakes in hope to raise awareness among future and current investors and help them avoid repeating them. First of all, investing in business and industry that you don't know that well is not a good idea. There is always some "hot" and "up and coming" industry sector but if you don't have much knowledge about that particular industry and don't understand its business model avoid it. For example crypotocurrencies were massive hit, year and a half ago when bitcoin reached its all-time high of $19,500 and then fell to $3,000 a year later. Inexperienced investor could suffer a massive loss if he doesn't fully understand complexity ...

Debt often has a negative connotation but is not really the complete truth. It is often a good way to raise money in order to enable your business to grow and expand. When it comes to loans there is more options available so you can choose the right option for you. There are different kind of loans but the main ones are bank loans, credit cards, lines of credit and factoring. Bank loan has a simple concept with fixed amount and fixed time. It is paid monthly with interest rate. The problem is that it is not that easy to get a loan especially if you just have started your business and even if you do bank may require significant collateral. You are probably already familiar how credit cards work. They are mainly used for short-term funding. You should be careful when using credit card not to build up balance too high. Line of credit is a very flexible type of loan. You don't have to take the lump some but smaller amounts that are better suited to your needs. It is only impo...

If you are starting a business, having a business plan is a must but it is also important if you already have established business. The biggest mistake is to see business plan as something static, with time it will change just like your business. In the growth phase good  plan will help you with forecasting sales and raising capital. Later, it can help you to see what goals you have accomplished and what new ones you need to add. Your business plan must be well thought so it represent your company in the best possible way. Good written business plan let others know that you are serious and that you can handle all that running a business requires from you. There are couple of necessary elements that your business plan needs to have: executive summary,  business/industry description, market analysis, competitive analysis, sales and marketing strategies, organization management, operating and financial plan including funding requirements. The executive summary is the ...

The financial statement is a written record of financial activities that gives an overview of financials results and conditions. Financial statement has three basic components: balance sheet which is an overview of assets, liabilities and equity on a particular date, income statement shows net income of the company during a set period of time and cash flow statement which shows inflow and outflow of cash caused by company's activities during stated period of time. Financial statements are often audited to ensure accuracy for tax, financing and investing purposes. Balance sheet reports your net worth at a particular point in time; you can understand it as snapshot in time, usually at the end of the fiscal year. It summarizes all financial data in three categories, assets, liabilities and equity. Assets are tangible objects of financial value owned by the company. Liability is debt owed to a creditor and Equity is a net difference when total liabilities ...

A hedge fund is an investment fund that collects pools capital from accredited and institutional investors and invest in securities or other type of investments with a goal to generate high returns. What makes them different from mutual funds besides type of investors and diversity of investments is that they are less regulated and have more freedom when utilizing  investing strategies that carry greater risk and potential for loss. Reason why it is available to wealthy investors is their knowledge and understanding of risks involved and ability to afford higher fees and potential loses. This means they can use short selling and other speculative activities unlike mutual funds. To be considered accredited investor individual must have a net worth of $1,000,000 at least or annual income of at least $200,000. Term accredited investor is defined in Rule 501 of Regulation D of Securities and Exchange Commission. Even though hedge funds are not subject to some regulation that...