Accounting Theory

Finance allah shmoop what is regulation eh Don't worry about

a thing because every little thing going to be all

right Ok Not reggae greg a our apologies for singing

there too mr marley's ghost Alright Well regulation a is

like security sale Light diet jenny craig Well specifically a

regulation A offering is one that carries a total notional

value of less than five million bucks worth of securities

as sold within a one year time frame All right

what is this one year thing It means that the

total dollar amount of securities sold for that given issuer

of them within a year would fall under the easy

breezy regulatory world of rig a If it had a

five sales of a million dollars of dead or equity

or less within one year if it had a sixth

sale meaning it would push it over Five million told

raise that year Then it would not fall under the

wreg a system and it would have to do an

enormous number of somersaults as if it was doing a

multimillion or billion dollar offering to the massive public There

are other little gotsch is inside of the reggae world

Like the company does not have to provide fancy securities

and exchange act reports until it has mohr than five

hundred shareholders and more than ten million box and assets

Why is reggae even a thing paperwork and small companies

doing offerings all the time with such a small offering

size The sec doesn't make you spreadem or you know

turn your head and cough nor does it take blood

urine or other samples love things when inspecting the legitimacy

of your offering feeling the need to keep myriad lawyers

employed Of course reggae grew more complex over time One

complexity revolves around the two tears under which reggae types

of filings must live Tier one allows for a rig

a style a simple offering to flex or expand to

be twenty million dollars in cap in one year with

filings that have to conform to the standards and that

are subject to their complaint list The good news for

the company Well they only have to do this upon

the offering not every quarter Then we have a tear

to flavor of a reggae offering In this somewhat more

complex twist companies may sell upto fifty million dollars in

securities in a one year period this sales also quickly

vetted by the sec but it doesn't have to be

vetted by state regulators and an army of lawyers And

unlike tier one into issuers well it must report financial

status regularly as in quarterly almost as if the company

is already a public corporation That's about it Long story

short reggae is an exemption for the sale of securities

that an exemption from mountains and mountains of paperwork and

filing an expense in raising money Reggae was basically a

nod to small startup e kinds of companies so that

they didn't have to spend half the money they raised

on lawyers and filing things and stuff for government bureaucrats

Tio no Stare at all right Well in parting we'd

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