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Reg A Do you have to comply with blue sky laws?

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http://www.TheSecuritiesAttorneys.com Reg A – Do You Have to Comply with the State Blue Sky Laws

Under Reg A, Tier 1 issuers must comply with state securities laws, the “Blue Sky” laws. Tier 1 deals are still subject to state merit review which may limit dilution, bar unsound financial condition, bar unequal voting rights, stop preferred stock, and prohibit negative net worth. These merit review limits and others may stop you from selling in particular states. Having to qualify your Tier 1 deal in many states is expensive and time consuming. The North American Securities Administrators Association is trying to implement coordinated state review.

For Tier 2 deals, the states can still investigate fraud and require you to file your SEC filings with them and pay a fee. You can make your Tier 1 deal a Tier 2 deal by complying with the Tier 2 rules even if you are not raising over $20 million

Tier 1 deals do not have to have audited financial statements, file annual audited financial statements with SEC, and are not subject to all the Tier 2 ongoing reporting.

State securities regulation is an important consideration in a Reg A offering. Compliance with Blue Sky laws can mean much time and expense. Reportedly an issuer seeking state registration in 50 states would incur $80,000 to $100,000 in legal fees alone. Even in a Tier 2 offering, you may still have to make a simple form filing and pay fees in some states.

www.TheSecuritiesAttorneys.com Want to know more? – email me at John.Lux@ Securities-Law.info (240) 200-4529 John E. Lux was in the top 5% of authors on Slideshare in 2014 and has been quoted by Bloomberg as an expert on reverse mergers
www.TheSecuritiesAttorneys.com This is part of a series on Regulation A, so subscribe here for more and to learn more, go to www. TheSecuritiesAttorneys.com and get a free copy of our book “How to Go Public”

Disclaimer This is not legal or investment advice of any kind Seek competent advice from qualified attorneys and investment bankers Your situation may vary The more you know about finance and business, the more you can profit

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Reg A Do you have to comply with blue sky laws?

  1. 1. www.TheSecuritiesAttorneys.com Reg A – Do You Have to Comply with the State Blue Sky Laws
  2. 2. www.TheSecuritiesAttorneys.com Under Reg A, Tier 1 issuers must comply with state securities laws, the “Blue Sky” laws
  3. 3. Tier 1 deals are still subject to state merit review which may limit dilution, bar unsound financial condition, bar unequal voting rights, stop preferred stock, and prohibit negative net worth
  4. 4. These merit review limits and others may stop you from selling in particular states
  5. 5. Having to qualify your Tier 1 deal in many states is expensive and time consuming
  6. 6. The North American Securities Administrators Association is trying to implement coordinated state review
  7. 7. For Tier 2 deals, the states can still investigate fraud and require you to file your SEC filings with them and pay a fee
  8. 8. You can make your Tier 1 deal a Tier 2 deal by complying with the Tier 2 rules even if you are not raising over $20 million
  9. 9. Tier 1 deals do not have to have audited financial statements, file annual audited financial statements with SEC, and are not subject to all the Tier 2 ongoing reporting
  10. 10. State securities regulation is an important consideration in a Reg A offering
  11. 11. Compliance with Blue Sky laws can mean much time and expense
  12. 12. Reportedly an issuer seeking state registration in 50 states would incur $80,000 to $100,000 in legal fees alone
  13. 13. Even in a Tier 2 offering, you may still have to make a simple form filing and pay fees in some states
  14. 14. www.TheSecuritiesAttorneys.com  Want to know more? – email me at John.Lux@ Securities- Law.info  (240) 200-4529
  15. 15. John E. Lux was in the top 5% of authors on Slideshare in 2014 and has been quoted by Bloomberg as an expert on reverse mergers
  16. 16. www.TheSecuritiesAttorneys.com This is part of a series on Regulation A, so subscribe here for more and to learn more, go to www. TheSecuritiesAttorneys.com and get a free copy of our book “How to Go Public”
  17. 17. Disclaimer  This is not legal or investment advice of any kind  Seek competent advice from qualified attorneys and investment bankers  Your situation may vary  The more you know about finance and business, the more you can profit

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