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CHART OF US SMALL BUSINESS
EXEMPT AND REGISTERED OFFERINGS
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 The
chart below offers a quick reference guide to the
main methods of raising capital in the US by small business issuers.
This is by no means an exhaustive list of the ways and means of raising
capital. The chart also does not provide all of the securities law
requirements of each of these methods and you are strongly advised to
consult with legal counsel if you are planning to raise capital in the US
or if you are a US small business issuer interested in raising capital
outside the US.
|
Name |
Max $ in 12 Month Period |
Primary Review Agency |
Investor Type |
Notes |
| Reg D - Rule 504 |
$ 1,000,000 |
States and SEC |
All |
• Available to
non-reporting companies only.
• Not available to a blank check company, an investment company,
or a company without a specified business.
• As of April 7, 1999, securities issued under Rule 504 are
restricted unless offering memorandum (“OM”) qualified by a State
regulator.
• If not qualified, securities are restricted for one year from
date of issue - subject to Blue Sky State rules.
• We recommend an offering memorandum if selling to non-accredited
investors. |
| SCOR (Reg D -Rule 504) |
$ 1,000,000 |
States and SEC |
All |
• 42 states accepted SCOR offering
filings.
• File and clear U-7 offering memorandum with State regulators.
• Offering must be $5.00 per share.
• Non-restricted securities. - No resale restrictions. - Subject
to Blue Sky State rules.
• Not available to oil & gas or mining companies.
• Cannot split stock or declare dividend for 2 years.
• Not available to a blank check company, an investment company,
or a company without a specified business. |
| Regulation A |
$ 5,000,000 |
States and SEC |
All |
• Available to
non-reporting companies only.
• Non-restricted Securities. - No resale restrictions. - Subject
to Blue Sky State rules.
• Must file offering statement (notification, offering memorandum
and exhibits) with SEC.
• Cannot accept monies until SEC and other State regulators clear
offering.
• Unaudited financial statements (one year). |
Reg D - Rule 505
Rule 4(6) Accredited Investor |
$ 5,000,000 |
States and SEC |
Unlimited
Accredited
35 Non-Accredited |
• Restricted
securities. - Resale restrictions. - Securities restricted for one
year.
• We recommend an offering memorandum if selling to non-accredited
investors.
• No solicitation/no advertising.
• Audited financial statements (one year). |
| Reg D - 506 |
Unlimited |
SEC |
Unlimited
Accredited
35 Non-Accredited |
• Restricted
securities. - Resale restrictions - Securities restricted for one
year.
• Need an offering memorandum if selling to non-accredited
investors.
• No solicitation/no advertising.
• Audited financial statements (one year). |
| Rule 701 |
Formula |
SEC and States |
Employees, Directors,
Officers, Consultants, or Advisers |
• Available to
non-reporting companies only.
• Non-restricted securities. - No resale restrictions. - Subject
to Blue Sky State rules.
• Requires a written purchase, savings, option, bonus, stock
appreciation, profit sharing, thrift, incentive, pension or
similar plan.
• Actual amount allowed to be sold subject to formula.
• If over $5,000,000 required to provide specific written
disclosure to investors (plan, risk factors & financials).
• Can issue securities for services at fair market value.
• Consultants and advisors must be natural persons and provide a
bona fide services other than in connection with capital raising
or maintaining a market (investor relations) for the registrant's
securities.
• Can issue securities to employees, directors, officers etc. of
majority owned subsidiary. |
| SEC - S-8 |
|
SEC and States |
Employees, Directors,
Officers, Consultants, or Advisers |
• Available to
reporting companies only.
• Non-restricted securities. - No resale restrictions. - Subject
to Blue Sky State rules.
• Effective immediately on filing with SEC.
• Consultants and advisors must be natural persons and provide a
bona fide services other than in connection with capital raising
or maintaining a market (investor relations) for the registrant's
securities. |
| SEC - SB-1 |
$ 10,000,000 |
SEC and States |
All |
• Non-restricted
securities. - No resale restrictions - Subject to Blue Sky State
rules.
• Revenue less than $25 million in last fiscal year
• Value of outstanding share capital less than $25 million
• A prospectus must be filed and cleared with SEC and all
applicable State regulators.
• Audited financial statements (two years).
• Company becomes subject to SEC reporting for one year from date
of SEC clearance.
• May elect continuous reporting status by filing Form 8A. |
| SEC - SB-2 |
Unlimited |
SEC and States |
All |
• Non-restricted
Securities - No resale restrictions - Subject to Blue Sky State
rules.
• Revenue less than $25 million in last fiscal year.
• Value of outstanding share capital less than $25 million.
• A prospectus must be filed and cleared with SEC and all
applicable State regulators.
• Audited financial statements (two years).
• Company becomes subject to SEC reporting for one year from date
of SEC clearance.
• May elect continuous reporting status by filing Form 8A. |
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Alixe B. Cormick
Venture Law Corporation
618 - 688 West Hastings Street
Vancouver, B.C.
V6B 1P1
Phone: 604-659-9188
Fax: 604-659-9178
E-mail Us |
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