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...

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...

Just like smaller reporting companies that we mentioned in the previous article emerging growth companies are entitled to reduce regulatory and reporting requirements under the Securities Act and the Exchange Act  But which companies qualify to be in this category. Emerging growth companies are companies that have total annual gross revenues less than $1.07 billion (initially $1 billion, but the it was adjusted in April, 2017 for inflation) during most recent completed fiscal year and companies retains that status under certain conditions. That is, annual revenues must not exceed $1,070,000,000 and it must not issue more than $1 billion in non-convertible debt over the past three years and must not become large accelerated filer.  Firm  remains being emerging company during the first five fiscal years  after completion of an IPO. A company could not be an emerging growth company if it completed its IPO on or before December 8, 2011 because this cat...