Understanding Securities Law

There are many things the SEC does not care about in the process. You may have many “Will the SEC care if …” questions, such as:

Will the SEC care if:

  • Your company is a start-up, early development stage company?
    • NO. The SEC doesn’t care about your stage of development as long as it’s fully and accurately disclosed.
  • Your company has no or little revenues?
    • NO. The SEC doesn’t care about your revenues or other aspects of your financial condition as long as it’s fully and accurately disclosed.
  • Your company does not have the money on hand to implement your business plan?
    • NO. The SEC doesn’t care about your financial ability to implement your business plan as long as it’s fully and accurately disclosed and you actually intend to implement the business plan described in your filing.
  • Either you or one of your officers or directors has had a personal or business bankruptcy?
    • NO. But it must be disclosed.
  • Your stock is priced at $.01 or $10.00 per share?
    • NO. But offerings at $.01 cause the SEC staff to pay more attention to your filing.
  • You have a big firm or small firm advising me or auditing?
    • NO. The SEC does not grant favors based upon the size of the firm representing you in the filing. As long as the auditor is a PCAOB member, the SEC doesn’t grant any favors to large vs. small audit firms

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