Mina Mar Group

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...

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...

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...

Under Securities Act of 1933 any offer to sell securities must be registered with Securities and Exchange Commission (SEC) or meet certain requirements to be exempt from registration. Regulation A+ under Title IV, Section 401 of Jumpstart Our Business Startups Act (JOBS Act) contains rules providing exemptions from the registration requirements. Reg A exemption existed prior to JOBS Act, it principally focused on small companies and had offering limit of $5 million which led to it not being used as much. Additionally issuer registered the offerings in any state in which they planned to sell it. JOBS Act expanded offering limit on $20 million for Tier 1 and $50 million for Tier II offering. With Regulation A companies can raise capital from the public and avoid legal requirements and high costs of traditional IPO. This means it included startup and emerging companies that could bear costs of initial public offering. Tier 2 Offering also called Mini IPO removes individual state ...

   The Jumpstart Our Business Startups Act (JOBS Act) was signed into law by president Barack Obama on April 5t, 2012. Legislation diminishes regulatory restrictions for startups like capital raising making it easier for them to get established. As stated in the bill, the purpose is "to increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies''. Title IV of JOBS Act  or Regulation A+ allows startup and later stage companies to raise up to $50 million from accredited and non - accredited investors. Reg A had been extended in May 2018 by federal legislation  and now allows public reporting companies to use it to raise capital. There are two tiers of Regulation A: Tier I offering:  raise up to $20 million all investors are eligible no individual investment limits can be matrketed anywhere reviewed financials SEC and state qualifications required no ongoing disclosure ...

Under the Securities Act of 1933 all offerings must be registered with the SEC or be exempt from such registration. Regulation A contains rules that provide exemption from the registration requirements. It's main purpose is to allow small and medium sized companies to access more capital because cost for registration with SEC are to high and only accredited investors are allowed to participate on the offering. On March 25, 2015 Securities and Exchange Commission adopted final rules to implement Section 401 of Jumpstart Our Business Startaps (JOBS) Act. As a results Reg A was split into two different tiers. Tier 1 for securities offering of up to $20 million in one year period and Tier 2 for securities offering of up to $50 million in a one year period. The final rules for offerings under Tier 1 and Tier 2 are built up on already existing Reg A, with some modifications. Both Tiers must meet certain basic requirements like company eligibility requirements, bad actor disqua...

In this memo, the benefits OTC shell companies stand to gain in Tier1 under the Reg A+ will be the main subject.  All transactions involving the trade of securities in Tier 1 conducted within the provision of the Reg A+ is mandated to be in accordance with the regulations enforced by the Blue Sky laws. The trading operations in Tier 2 are not bound by these regulations and the highest demand from the state is limited to requesting that the company files a Form D, it is also not mandatory for the Tier 2 offerings to be presented to the state for review. We see a better future for the corporate world with the new structure being implemented for the Reg A+. This will make it easier to generate the needed funding capital and revive the Shell companies classified as non-reporting OTCs. The “Blue Sky” law is the term given to the laws governing transactions involving state securities. It is mandatory for companies to obey the state and federal laws when trading existing or new secur...