Regulation A Can you sell your stock too?

www.TheSecuritiesAttorneys.com

Reg A – Selling Your Own Stock

Too


The new Regulation A

allows you to sell stock of existing

holders along with the stock for

the company

This provides much needed liquidity for

company founders

Company founders usually have put all they have into the company with

little salary

Being able to sell

stock gives an exit strategy to early investors,

giving them more courage to

invest


The SEC believes that allowing selling security holders access to

avenues for liquidity will encourage them to invest in

companies


The old Regulation A prohibited resales unless the issuer had net

income from continuing operations in at least one of its last two fiscal

years


Allowing resales when the company does not have net income helps

developing companies, their founders and their investors

Different

requirements are provided for secondary sales by affiliates and by non-affiliates

Sales by affiliates after the first year after an issuer’s

initial qualification are limited $6

million for Tier 1 offerings during 12

months

Thus, if you are a Tier 1 company

allowed to sell $20 million of stock,

your affiliates can sell up to $6

million in the first year

In Tier 2 offerings, sales by affiliates in the first year after an issuer’s initial qualification are limited to $15

million during that 12 months

Thus if you are a Tier 2 company

selling $50 million of stock, your

affiliates can sell up to $15 million in the first 12 months

Sales by non-affiliates

under a qualified offering statement are

limited only by the maximum offering

amount under Tier 1 or Tier 2

Non-affiliate sales are aggregated with sales by the issuer

and sales by affiliates to calculate the

maximum offering amount

The offering amount is calculated by aggregating the

price of all securities for which

qualification is being sought

This includes securities underlying rights to

acquire that are convertible,

exercisable, or exchangeable within

the first year after qualification or at the

discretion of the issuer

Thus if you are selling

one million shares at $10 and one million

warrants to buy shares at $10 for one

year, then you are selling $20 million of

securities

The value of the other securities

underlying rights to acquire the other securities more

than a year later, are not included

the aggregate

Securities attorney John Lux is a former OTC

market maker and professional stock

trader


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


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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

Regulation A Can you sell your stock too?

Business

Transcript of Regulation A Can you sell your stock too?