ShmoopTube

00:00

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

00:08

a thing because every little thing going to be all

00:11

right Ok Not reggae greg a our apologies for singing

00:17

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

00:21

like security sale Light diet jenny craig Well specifically a

00:26

regulation A offering is one that carries a total notional

00:30

value of less than five million bucks worth of securities

00:34

as sold within a one year time frame All right

00:36

what is this one year thing It means that the

00:38

total dollar amount of securities sold for that given issuer

00:43

of them within a year would fall under the easy

00:46

breezy regulatory world of rig a If it had a

00:50

five sales of a million dollars of dead or equity

00:53

or less within one year if it had a sixth

00:57

sale meaning it would push it over Five million told

01:00

raise that year Then it would not fall under the

01:02

wreg a system and it would have to do an

01:05

enormous number of somersaults as if it was doing a

01:07

multimillion or billion dollar offering to the massive public There

01:12

are other little gotsch is inside of the reggae world

01:15

Like the company does not have to provide fancy securities

01:19

and exchange act reports until it has mohr than five

01:22

hundred shareholders and more than ten million box and assets

01:25

Why is reggae even a thing paperwork and small companies

01:31

doing offerings all the time with such a small offering

01:33

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

01:37

turn your head and cough nor does it take blood

01:40

urine or other samples love things when inspecting the legitimacy

01:44

of your offering feeling the need to keep myriad lawyers

01:48

employed Of course reggae grew more complex over time One

01:52

complexity revolves around the two tears under which reggae types

01:56

of filings must live Tier one allows for a rig

01:59

a style a simple offering to flex or expand to

02:03

be twenty million dollars in cap in one year with

02:07

filings that have to conform to the standards and that

02:10

are subject to their complaint list The good news for

02:12

the company Well they only have to do this upon

02:15

the offering not every quarter Then we have a tear

02:18

to flavor of a reggae offering In this somewhat more

02:21

complex twist companies may sell upto fifty million dollars in

02:25

securities in a one year period this sales also quickly

02:28

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

02:31

vetted by state regulators and an army of lawyers And

02:35

unlike tier one into issuers well it must report financial

02:38

status regularly as in quarterly almost as if the company

02:42

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

02:45

short reggae is an exemption for the sale of securities

02:49

that an exemption from mountains and mountains of paperwork and

02:53

filing an expense in raising money Reggae was basically a

02:57

nod to small startup e kinds of companies so that

03:01

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

03:03

on lawyers and filing things and stuff for government bureaucrats

03:08

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

03:11

like to thank our kindly sponsors at nyquil z z

03:13

z for their help and cooperation in producing this fine 00:03:17.37 --> [endTime] regulation A video

Full Transcript