Small Corporate Offering Registry (SCOR)

The Small Business Registry was designed specifically for small businesses. It allows small businesses to raise equity or debt capital publicly without having to register with the Securities and Exchange Commission. It is designed to streamline the state review process through the use of standardized forms and reviews. Each state separately reviews company filings and issues a permit allowing general application to the public in that state.

Permits are typically issued within 30 days (in Nevada) or can take six months (as is the case in California) depending on each state’s regulatory standard.

This form of registration is available to small issuers of securities pursuant to Regulation D, Rule 504, of the Securities and Exchange Act of 1933, as amended.

It allows small businesses to raise up to $1 million in equity financing with certain limitations and guidelines. This program is known as Registration by Exemption because it is basically a hybrid between a public offering and a private placement.

This type of offering is often called a DPO or Direct Public Offering because the shares can be sold to the public without the use of an underwriter or agent (Broker). These securities may also be sold to the public and resold on the established secondary market.

With a SCOR offering, a company can advertise to investors and sell securities to anyone who expresses an interest, providing a huge advantage over a 504 offering where the offering is restricted to just 35 non-accredited investors.

Being able to list securities on the Nasdaq bulletin board or pink sheets is another positive for DPOs because it makes the investment more liquid and attractive to investors.

You can expect to receive comments from examiners in many of the states in which registration is sought, depending on the regulatory approach taken by the state, those comments may be limited to the request for disclosure of additional information or may require certain terms of compliance to be met. the offer. amended with state equity laws.

If pending comments are not resolved, the state may deny the registration request. States may make the applicable substantive fairness standard an appendix to the filing instructions or use other means to make it available.

SCOR’s offer can be made in select states and requires audited financial statements. An experienced securities attorney familiar with the process and state requirements is required.

The issuer must be incorporated as they will be selling shares in the corporation. You must have a Business Plan because much of the information required in the offering circular can be taken from the business plan.

A company should gauge investor interest in the offering before launching a DPO. Some of the advantages of a DPO are that it is advertised to the public, the company can solicit investors, and it works best when offered directly to the target group.

These groups are called affinity groups or groups that have some kind of ties to the company, its product, or its services. A company that can easily contact its customer has an advantage over one that may have many customers but no information about them. For example, a company in the medical field may target doctors, but since it is impossible to know all the doctors in the area, you may need to purchase a list of doctors from a direct mail company.

Regulation D 504 does not require a financial audit but it can only be sold to 35 non-accredited investors, the rest must be accredited.

Soliciting and advertising for investors is not allowed.

An accredited investor:

· An individual who has individual net worth, or joint net worth with the person’s spouse, in excess of $1 million at the time of purchase.

· Accredited investors are individuals with income greater than $200,000 in each of the two most recent years or joint income with a spouse greater than $300,000 for those years and a reasonable expectation of the same level of income in the current year.

Included is a broker/dealer registered with the Commission under the Stock Exchange Act who buys on their own account as an investment. [Rule 501(a)(1)].

A trust with assets greater than $5 million, not set up to purchase the securities offered, for which purchases are made by a sophisticated individual.

A charity, corporation, or partnership with assets in excess of $5 million.

A director, executive officer, or general partner of the company selling the securities.

Regulation D 504 It is easy, fast and cheap to prepare. No underwriter, broker or agent required, shares can be sold to company employees.

None of these type offerings is unique, each must be evaluated on its own merits and the needs of the business. Nor are these the only options.

After the offering is complete, the company must request that a Market Maker file a 15c211 in order for the company’s shares to be publicly traded.

For additional information, visit: http://www.genesiscorporateadvisors.com.