Penny Stock Investing

Today, we are going to discuss some forms of offering exemption. Some micro-cap companies want to offer or sell securities to the public. Not all companies will do that because there is one condition that companies should follow. Only companies that are registered with SEC have the only right to sell securities to the public.

Those companies can use many ways of exemption and we have here just two of the most common exemptions that many micro-cap companies use. Keep reading …

1) Regulation A:

This is the first way that companies can use in order to offer some exemptions. Companies raising less than $5 million in a 12-month period may be exempt from registering their securities under a rule known as Regulation A.

Those companies don’t need to fill any forms of SEC (EDGAR). They only need to file a printed copy of an “offering circular” with the SEC. That means there will be some specific information must be filled in those forms.

2) Regulation D:

Regulation D exempts from registration companies that seek to raise less than $1 million in a twelve-month period. This is not the only case here; also companies that are seeking to raise up to $5 million may be exempt from registering their securities (without registering the transaction).

In the case of regulation D, companies don’t have to fill any reports or forms with the SEC. they must still file what’s known as a “Form D”.

Anyways, the both kinds of exemption are required companies to fill some forms which help the investor to get information needed like financial statements, brief notes of addresses of owners and stock promoters, and little other information about the company.

Although those companies don’t have to fill any reports with SEC, but they do in order to ensure investors, especially the accredited investors.