REGULATION A – SECURITY FILING

AS BACKGROUND TO PREPARE EDUCATIONAL CURRICULUM AT CEO SPACE – THESE RAW EMAIL DISCUSSIONS ARE PRESENTED AS INTERNAL WORK DOCUMENTS TO CEO SPACE – THAT MAY BE OF USE EDUCATIONALLY – TO VENTURE OWNER CEO’S AND THEIR LEGAL FIRMS….CLE CREDITS FOR LAW FIRMS ARE EARNED AT CEO SPACE EDUCATIONAL EVENTS FIVE TIMES ANNUALLY: AND NOW THIS:

Berny,

My initial thought is that any type of offering that requires the filing of a offering statement with the SEC, who must then review and approve the document before the offering may commence, is a burden on a small company looking to raise money. Here is a quick summary of Reg A as stated in my outline materials.

Regulation A Exemption
This is a small public offering not to exceed $5 million in any 12-month period.
Issuer is required to file an offering statement with the SEC who them reviews the same. Once the disclosure information is approved by the SEC, the issuer may offer and sell the securities to the public and general solicitation is allowed.
Pros: Simpler financial statements and no Exchange Act reporting following the offering.
Cons: Time consuming and expensive process.
Having said that, the Financial Reform Act requires the SEC to review, within a year of its passage (i.e. July 2011) the accredited investor definition as it applies to natural persons and may, by notice and comment, make such further adjustments as it deems appropriate (eg. income test) other than any further adjustment to the net worth standard, which is protected for the next 4 years. If the accredited investor definition becomes more stringent and further limits the pool of available investors, then there is the possibility that companies may seek general solicitation methods as the Reg A affords, but the SEC review process is still a major burden with the Reg A option.

Hope this helps.

JW

Berny – My take is that the COST and TIME to complete public offerings under Reg A are only one factor. IN our opinion there should be NO PUBLIC OFFERING before its time….such that firm is a public firm, with real earnings and with growing markets to support after market price in making a public market for stock. We realize others hold different views.