Blog Old

Biden to pardon all federal offenses of simple marijuana possession – Breaking News

Posted on by Jason Futko Tags: , , , , ,

As the decriminalizing of marijuana is being extensively debated across the world, President Joe Biden just took his first major step in this direction. Biden announced all prior federal offenses of simple marijuana possession to be pardoned. This act will affect directly the record of thousands of Americans charged with what was once considered a crime.

In a video release, Biden stated that “It’s legal in many states, and criminal records for marijuana possession have led to needless barriers to employment, housing, and educational opportunities”. According to CNN, the Department of Health and Human Services and Attorney General Merrick Garland has been assigned to review how marijuana is scheduled under federal law, in what could be another step toward a federal legalization. Read more at CNN.com.

Rafael Gonçalves, communications coordinator at KoreConX, and Brian MacDonald, Managing Director at Arcview Capital, debated the topic in a KoreTalkX episode just a couple of minutes after the breaking news. You can listen to it in your favorite podcast player, such as Spotify, iTunes and Amazon Music.

Cannabis Consumers’ Home Growth Increases Worldwide

Posted on by Oscar Jofre Tags: , ,

As marijuana becomes increasingly legalized all over the world, an interesting trend is developing–an increase in the home-growing of the plant. This can be seen in the US, Canada, and Europe, with more people taking up this activity to ensure they have access to safe, high-quality cannabis, especially in more rural areas where access to dispensaries is limited. Keep reading to learn about what the rise in homegrown means for the global cannabis industry.

 

Global Home-growing Trends

 

Cannabis consumers are growing their own plants at home more frequently worldwide, as laws surrounding cannabis production and consumption continue to change. In Luxembourg, people 18 years or older will now be allowed to grow up to four cannabis plants in their homes, making it the third country in the world to legalize this activity, after Uruguay and Canada. This new legislation is intended to address the problem of drug-related crime by introducing fundamental changes in Luxembourg’s approach to recreational cannabis use.

 

The decision by the small but financially powerful European country to legalize the production and consumption of the drug is a milestone on the continent, which has been slower to adopt more liberal cannabis laws. Consumption will only be legal within the household, although fines for the possession of a maximum of three grams in public will be reduced considerably from current amounts.

 

In the United States, you can grow cannabis for medical or recreational purposes in 19 states. The rules vary by state, but generally, you are allowed to grow a certain number of plants, and the plants must be at a certain maturity level. For example, in Massachusetts, you are allowed to grow up to six plants, and only three of those plants can be mature. In California, you are allowed to grow up to 25 plants, regardless of maturity level. This increased demand for home growing in the US can be seen because of the numerous benefits it offers. Home-grown cannabis is typically cheaper than store-bought cannabis, and it also allows for more customization and control over the product. With store-bought cannabis, you are at the mercy of the growers and manufacturers, but when you grow your own, you can choose exactly what goes into your product. You can also grow unique strains that may not be available at your local dispensary, just a few reasons why home-grown cannabis has risen in popularity across the globe.

 

In Canada, where recreational cannabis was legalized in 2018, there is a growing trend of cannabis cultivation in people’s homes. This trend can be seen as an effort by consumers to have more control over the quality and price of the product they are buying. In general, when a product is legalized, there is often a surge in demand for that product. The legal status of cannabis has done nothing to slow this trend. As recreational cannabis has become legal in Canada, 10% of the country’s cannabis users grow it at home, according to the National Cannabis Survey (NCS) of 2019. This showcases how there is an increasing demand among cannabis users to be able to grow their own.

 

Creating Business Opportunities

 

With homegrown cannabis becoming more popular, businesses are taking notice and looking for ways to get in on the action. The JOBS Act regulations provide an opportunity for companies to connect with small investors and raise capital through crowdfunding. By using these regulations, companies can crowd-fund their business ventures related to cannabis home-growing. This includes businesses that sell products or services that help people grow cannabis at home or companies that invest in the cannabis home-growing industry.

 

The JOBS Act regulations have been a boon for small businesses and startups, and the cannabis industry is no exception. These regulations have opened up a new avenue of investment for companies involved in the cannabis home-growing industry. By connecting with small investors through crowdfunding, these businesses can raise the capital they need to grow and expand their operations. With global cannabis sales projected to skyrocket, now is the time for businesses to get involved in the home-growing market.

 

SEC Charges Eight in Scheme to Fraudulently Promote Securities Offerings

Posted on by Oscar Jofre Tags: , , ,

On September 30, 2022, the SEC announced charges against 8 CEOs and CFOs for fraudulently promoting Regulation A+ securities offerings.  The companies named by the SEC include Elegance Brands Inc. (now Sway Energy Corp.), Emerald Health Pharmaceuticals Inc., Hightimes Holding Corp., and Cloudastructure Inc.

 

This is not a good day for those who flout the rules, but we are glad the SEC has taken decisive action.  Reg A+ is gaining great momentum in the marketplace and this type of scrutiny by the SEC is necessary to keep it clean.

 

There are so many great companies and intermediaries working hard and being compliant. This only reminds us that we must continue to be diligent and keep our eyes open so that no further damage happens in the private markets.

 

It is not enough for the broker-dealers of record to simply do KYC ID verification; you also need to keep asking the hard questions.

 

If you are an IA firm,   you are creating and delivering the branding, messaging, and content through stories, videos, blogs, webinars, etc.  Each of these activities has far-reaching regulatory consequences. You can’t just simply do whatever they tell you to do; you too must be diligent in ensuring that you are telling the truth on their behalf. 

 

We turn down clients daily because we don’t compromise our ethics, and we only operate with full compliance to all regulations..  

 

There are only two ways to operate in this world:

  • Compliantly, ethically, legally
  • Non-Compliantly, unethically, illegally, and cutting corners

 

The choice is clear.

 

Capital-raising cannot be done by only the Issuer. This caution applies to all the following participants:

  • Issuer (Management, Board Directors)
  • Investors
  • Shareholders
  • Lawyers
  • Auditors
  • FINRA Broker-Dealers
  • Investor Acquisition Firms (Marketing Firms)
  • Call Centers (Boiler Rooms)
  • Transfer Agents
  • Issuance Technology Providers
  • Funding Platforms
  • Research Providers
  • Offering Aggregators
  • Investor Relations
  • Public Relations 

 

If you see any kind of questionable behavior, exercise caution and if necessary, let the SEC know.

 

SEC News Release 30 September 2022

https://www.sec.gov/litigation/litreleases/2022/lr25541.htm

 

Stay tuned for more updates from the SEC.

KoreClient Spotlight: Fist Assist

Posted on by Oscar Jofre Tags: , ,

Fist Assist Devices, LLC, a medical device company from Las Vegas, NV, is on a mission to increase and improve arm circulation around the world. As the brainchild of Dr. Tej Singh, a vascular, endovascular, and vascular access surgeon trained at Stanford University Hospital, First Assist aims to solve a common problem he saw in many patients needing focal arm circulation benefits. Currently, the Fist Assist is an FDA 510k Authorized, minimally invasive device that a patient would wear on their arms to increase focal arm blood flow and relieve pain. However, the company had also been designated  Breakthrough Device status by the FDA for potential arm vein dilation to assist the renal failure community (Formal FDA submission pending for this Indication ).

 

“Throughout my surgical training, first at the University of Chicago, then at Sanford University, I always thought there had to be a way to make a wearable device that could help patients with their veins, especially on the arms. The basic science, clinical science, and exercise science were all there. When we’re looking at arm veins, we’re thinking of patients who need those veins for their medical care, whether it’s for IV placement, chemotherapy access, or possible dialysis access. Arm veins are really important,” said Dr. Singh, CEO and Founder of Fist Assist. In one study, it was reported that 59.3% of highly complex patients exhibit difficult venous access, meaning that for these patients, who may have heart disease, liver failure, diabetes, or other chronic conditions, healthcare providers often have difficulty when attempting to start an IV or draw blood. This often causes pain and discomfort for the patient, as multiple attempts are often required before it can be successful. 

 

“Right now patients have limited choices to improve arm circulation. If they need a medical procedure and it requires access to their arm veins, they’re at the mercy of whatever arm veins they have that distend. If someone is active and they exercise, they probably have decent veins, but if someone doesn’t have good arm veins, there was nothing out there to help them except a compression ball,'” Dr. Singh added. He continues: “Our device is a battery-operated pneumatic focal compression device that you wear below your shoulder or elbow. It gives intermittent compression to your arm up to a pressure of 60 mmHg and can be worn for 1-2 hours a day to increase circulation and decrease present and future pain in your arm in America. In the rest of the world, it can do vein dilation and help with vascular access based on regulatory approvals,” said Dr. Singh.

 

Fist Assist is currently raising capital through RegCF to finance its future FDA submissions and commercialize its product and expand its availability through direct-to-consumer, direct-to-business, and direct to big box stores. The company is excited about its crowdfunding and its upcoming FDA submissions which Will allow more patients to have this device. Outside of the US, the device has been granted CE Mark and approved to sell in Europe, Canada, Australia, and India as an arm massager, a vein dilation device, and to assist dialysis.

 

Dr. Singh said “After being designated as an FDA Breakthrough for potential vein dilation to renal failure patients in December 2021,  we need to formally show the FDA the complete dataset for eventual DeNovo authorization for the renal failure community. If we clear the final FDA hurdles, one day these wearable devices will be marketed to increase arm vein size to help renal failure patients receive better care, meaning they’re able to get a fistula or get better dialysis because they have a better arm vein. That hopefully will translate into significant changes to the way physicians treat and care for renal failure patients with better outcomes and fewer costs. Helping the global community for improved arm blood circulation is our important Mission and its important”, added Dr. Singh

___________________

Regulation CF(RegCF), D (RegD), A (RegA+) Disclaimer


This communication may be deemed to be a solicitation of interest under Regulation CF (RegCF), D (RegD), A (RegA+) under the Securities Act of 1933, in which case the following applies:

  • No money or other consideration is being solicited, and if sent in response, will not be accepted;
  • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
  • A person’s indication of interest involves no obligation or commitment of any kind; and 
  • An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

Best Practices for Shareholder Management

Posted on by Oscar Jofre Tags: , , , , ,

Shareholder management is a critical part of any company, but it can be especially daunting for those who have recently completed a RegA+ or RegCF offering. When you welcome so many new shareholders on board, it’s important to have a plan in place for how you will manage them to ensure a positive relationship. Thankfully, shareholder management can be streamlined with the right tools and communication strategy.

 

Shareholders have a vested interest in how your company performs. They will want to know about the company’s progress, financial information, or future plans, and they have a right to be kept in the loop. Unhappy shareholders may spread negative word-of-mouth about your company, which could hamper your ability to raise additional funds in the future. Additionally, if shareholders feel like they are in the dark about what’s going on with your company, they may choose to sell their shares, which could hurt your stock price. Thus, it is important to have a shareholder management plan in place to ensure that you are maintaining strong relationships with your shareholders. So, what does this look like in practice?

 

Continuous Improvement

 

A company’s first step should be to accurately evaluate its investor relations performance, with the analysis serving as a benchmark. While share price, analyst ratings, and price-to-earnings ratios provide some measure of a company’s ability to meet shareholder needs, they don’t provide much information about other dimensions of the investor relations function, such as the cost of operating the investor relations department or the quality of investor relations communication channels. It is important to establish an objective assessment of such things because ongoing monitoring of these metrics and the overall investor relations strategy can help to identify areas for improvement

 

Regular Communication

 

One of the most important things you can do to manage shareholders is to maintain regular communication with them. This can be done in many ways, such as through email, webinars, podcasts, or blogs. No matter what method you choose, it’s important to keep shareholders updated on your progress and answer any questions they might have. This will show them that you value their investment and are committed to keeping them informed.

 

Use Shareholder Management Tools

 

Another important tip for shareholder management is to use shareholder management tools, such as the shareholder management solution from KoreConX. This platform provides many features and benefits, such as the ability to keep shareholder documents like earnings reports secure and engage shareholders with portfolio management tools that allow them to see detailed information about their investments. Such tools eliminate the hassle of traditional mail and increase the ease of access for shareholders

 

Establish Expectations

 

When welcoming new shareholders on board, it’s important to set expectations from the start. Shareholders should know what kind of communication they can expect from the company and how often they will receive updates. It’s also important to let shareholders know what information will be shared with them and what will remain confidential. By setting clear expectations from the beginning, you can avoid misunderstandings and build trust with shareholders.

 

Seek Feedback

 

Another important tip for shareholder management is to seek feedback from shareholders regularly. This can be done through surveys, focus groups, or one-on-one interviews. Shareholders will appreciate being asked for their opinions and it can help you identify any areas where you need to improve your communication or management strategy. Feedback from shareholders may also be a great source of ideas for marketing, new or improved products, or other recommendations that will positively affect your business.

 

Be Transparent

 

Finally, it’s important to be transparent with shareholders about the company’s progress, financial information, and future plans. It’s easy to communicate good news, but a transparent company will ensure even the bad news is accurately conveyed to investors in a timely manner. Shareholders need to have confidence in your company–you don’t get that by denying the existence of problems, but by showing that you are proactive in (ideally) preventing them, identifying them, and solving or mitigating them. In some cases, it might make some sense to put on a rosy public face to the public but shareholders aren’t outsiders; they’re owners. This will show them that you’re committed to keeping them informed and help build trust between the company and its shareholders.

 

By following these tips, you can streamline shareholder management and build strong relationships with shareholders. With the right tools and communication strategy in place, you can ensure that shareholders are kept up-to-date on your progress and that their expectations are managed effectively. As a result, everyone remains on the same page, which can lead to a more efficient and cohesive shareholder management strategy, improve shareholder relations, and lead to a more successful enterprise.

 

Why RegCF Offerings Fail

Posted on by Oscar Jofre

Before the JOBS Act, companies in the private capital market had very few options to raise the capital they needed to grow. Many sought venture capital, which has an unfortunately low success rate. On average, fewer than 6.5% of small businesses succeed with this funding route.  In contrast, 60% of companies using RegCF have enjoyed success using the JOBS Act exemption, which offers issuers a way to crowdfund and get their mission across to more investors. Still, 40% of the companies turning to RegCF are unable to find success. So what goes wrong? 

 

There are several reasons why companies fail at RegCF offerings, but the most common reason is a lack of commitment. This can manifest itself in a few different ways, failure to comply with regulations, a failure to budget appropriately, or failure to market appropriately. Let’s take a closer look at each of these reasons.

 

Complying with Regulations

 

One of the most important aspects of a RegCF offering is compliance with SEC regulations. These regulations are designed to protect investors and ensure that companies are providing accurate information about their business and the risks involved in investing. Cutting corners is not a solution to save time and money; failing to comply can jeopardize the raise altogether. Failing to comply with regulatory requirements can result in harsh consequences if undergoing an audit or raise the risk of being sued by an investor. Compliance requires a wholehearted commitment to the regulations from day one to protect the company in the long term and raise the likelihood of a successful raise.

 

Budgeting Appropriately

 

Another critical aspect of a RegCF offering is budgeting appropriately for the costs associated with the offering. These costs can include legal fees, accounting fees, and marketing expenses. Without a proper budget, companies may find themselves unable to cover all the necessary expenses and being forced to cut corners to make ends meet. Creating an appropriate budget helps to ensure that there is an adequate amount of funding to market the offering, engage with the right professionals, and adhere to regulatory requirements without making sacrifices.

 

Marketing the Offering

 

Without investors, a RegCF raise cannot be successful. This requires issuers to market their offering in a way that attracts the most appropriate investors. For RegCF, companies can take advantage of affinity marketing to bring in potential investors that align with the company’s values and mission. This can do more than creating shareholders, it can build brand ambassadors who are equally as passionate about what you’re building.

 

How to Avoid These Pitfalls

 

The best way to avoid these pitfalls is to commit to the process from start to finish. This means being willing to invest the time and resources necessary, complying with regulations, budgeting appropriately for the offering, and assembling a team of experienced professionals. While this cannot guarantee success, it gives companies a significant advantage over those who are not committed to the capital raising process. By being willing to invest the time and resources necessary, companies can increase their chances of success and avoid the pitfalls that have led to the failure of other RegCF offerings.

 

KoreClient Spotlight: FirstString

Posted on by Oscar Jofre Tags: , ,

As father and son, Barry and Tyler Jones share a common goal of revolutionizing the job-seeking and hiring process. Together they founded FirstString, a career technology company that aims to reimagine the hiring process for collegiate athletes, to nurture the next generation of leaders in the workforce. FirstString was founded with the belief that an individual’s skills and professional assets go far deeper than a paper-thin resumé.

 

Barry Jones is a US Army veteran with over 20 years of experience in sales and business development. When he transitioned to civilian life and the corporate world, he first joined pharmaceutical giant Johnson & Johnston. Seeking to use his creativity to help businesses grow, Barry moved on to work with startup biotechnology companies. After working with startups for over a decade, Barry sought to apply his knowledge to the field of executive recruiting. However, he immediately realized there was something wrong with the way recruiting worked and decided to create an application that would be more efficient for all involved. “The recruiting industry is stuck in the 1990s, it’s so inefficient. I started to develop a mobile application; I had this vision of how it could work and how it could really make the recruiting system much more fair and efficient for everyone involved. Everybody wins,” said Barry of his motivation. 

 

At the same time that Barry was working as a recruiter, Tyler was a student at the University of Georgia, where he was a Division-1 collegiate athlete, running track and cross country. Through his years as a scholarship athlete and team captain, Tyler learned the importance of hard work, consistency, teamwork, discipline, and leadership. But, like many of the 480,000 other collegiate athletes across the US, the dedication toward athletic performance often leaves little time for meaningful summer jobs or internships that fill out a college grad’s resumé when applying to their first post-college job. “Their resumés are so thin, they can’t even compete with someone they sat next to in their chemistry class that got to do summer jobs or internships that lasted months,” added Barry.

 

“By the time I walked across the stage to receive my degree, I was still competing. People would ask me, ‘what are you going to do now?’ I would tell them I didn’t know because I didn’t have the time to really figure it out yet, I had been competing,” said Tyler. Post-graduation, Tyler jumped on the first job offer he received from a wealth management firm. “In the interview, they make it sound like it’s sunshine and rainbows. Quite frankly, I jumped the gun. I didn’t know what to expect or how to negotiate and the right questions to ask. I realized very quickly that being bolted behind a desk just wasn’t for me but I didn’t want to feel like a quitter so I stuck it through,” he added. And, as COVID-19 became a factor, Tyler experienced firsthand what it was like to feel exposed and helpless in a competitive job market. 

 

Having experienced the challenges of the hiring and job-seeking market, Barry and Tyler realized that many qualified and overlooked student-athlete candidates have extraordinary talents and passions for their work, so they worked to develop a system that would enable new college graduates to win job interviews far outside of their experience level but within their skill level. Together, their mission is to help college athletes identify the right career trajectory so that they can build fulfilling and rewarding careers.

 

As Tyler and Barry began to build FirstString, they had the opportunity to make a difference in people’s lives, and show that there is so much more to a job candidate than what is on their resumé. FirstString is the first mobile application that enables college athletes to connect, find jobs and internships, and train for success after college. 

 

With FirstString, employers can post jobs and internships and search for qualified candidates. Candidates can create a profile with a video introduction, skills, experiences, and references. This allows employers to get to know the candidate before even meeting them. It makes the hiring process more efficient by removing the outdated paper resumé and allowing student-athletes to display the leadership ability and other skills they bring to the table, even if they don’t have as much employment experience as some. 

 

The pair had several large investors in their app that they ultimately turned down because of unfavorable terms. However, having received significant interest in the app from day one from everyday people, the father-son team feels RegCF can be a very powerful capital-raising tool for them. This ability to find investors who are equally as passionate about their mission highlights what the JOBS Act is all about. With RegCF, they can offer equity in FirstString to anyone, not just wealthy accredited investors.

 

Barry and Tyler Jones are changing the game when it comes to job seeking and hiring for student-athletes. With FirstString, they are providing a platform for athletes to connect and find jobs. This is just the beginning for the Jones duo and their goal of easing the transition for college athletes from school to employment.

___________________

Regulation CF(RegCF), D (RegD), A (RegA+) Disclaimer


This communication may be deemed to be a solicitation of interest under Regulation CF (RegCF), D (RegD), A (RegA+) under the Securities Act of 1933, in which case the following applies:

  • No money or other consideration is being solicited, and if sent in response, will not be accepted;
  • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
  • A person’s indication of interest involves no obligation or commitment of any kind; and 
  • An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

Global Cannabis Sales are Projected to Skyrocket

Posted on by Oscar Jofre Tags: , ,

Cannabis has been legalized for both medicinal and recreational use in many states, and this is only expected to increase the demand for the product. Experts believe that the cannabis market will continue to grow as more states legalize it and that by the end of 2026, the global industry will be worth $57 billion. This growth is being driven by many factors, including the changing attitudes towards cannabis, the increasing number of people who are using it for medicinal purposes, and the fact that it is now being sold in more places than ever before.

 

Changing Views on Cannabis Globally

One of the biggest drivers of this growth is the changing attitude towards cannabis. In the past, it was seen as a dangerous drug with no medicinal value. However, over the last few years, there has been a shift in public opinion. More and more people are now beginning to see cannabis as a potential medication, and this is reflected in its legality. In certain states in the US, such as Colorado and Washington, cannabis is now legal for both medicinal and recreational use. This change in attitude is also being seen in other parts of the world. In Canada, cannabis was legalized for medicinal use in 2001, and it became legal for recreational use in 2018. This has had a positive effect on the growth of the industry, as it has made it more socially acceptable. 

 

The changing attitude towards cannabis is not the only factor driving growth; the increasing use of cannabis for medicinal purposes is also having an impact. In the past, cannabis was mostly used to treat pain, but it is now being used to treat a wide range of conditions, such as anxiety, and depression. This is likely because more research is being carried out into the potential medicinal benefits of cannabis. As a result of this research, the number of people using cannabis for medicinal purposes is increasing. In Canada, the number of people with a medical cannabis license increased from just over 5,000 in 2001 to over 300,000 in 2018. This increase is also being seen in other parts of the world, such as Australia and the United States.

 

The final factor driving the growth of the cannabis market is the increasing availability of the product. With cannabis sold in legal dispensaries, this has made it more accessible to people who want to use it, and it has also made it safer, as the product is regulated. In addition, there are now many different types of cannabis products available, which appeals to a wider consumer base.

 

Industry Growth in the US

The growth of cannabis sales in the United States is projected to be a significant contributor to overall global growth. By 2026, US cannabis sales are estimated to reach $42 billion, making up 75% of the global market. This steady growth is attributed to new markets opening in states where cannabis has been legalized for adult use. And, major markets like New Jersey legalized adult use of cannabis this year, and New York is expected to follow, which would bring the number of legal states to 33. These new markets are expected to generate an additional $5 billion in sales by 2026. Medical cannabis sales have also seen a steady increase, although at a slower rate than adult-use sales.

 

Expanding Capital Access for Cannabis Companies

 

Just as the cannabis market is expected to grow, cannabis companies also have the opportunity to take advantage of the growing private capital market. For cannabis companies who often have difficulty seeking traditional funding, there are a growing number of investors looking to invest in private capital through the JOBS Act exemptions, like RegA+ and RegCF. This market is expected to grow to $30 billion by 2030, which gives cannabis companies an excellent opportunity to seek the funding needed to fuel their growth. 

If you aren’t current in your Reg A reporting, you could still be violating securities laws even if qualified by the SEC

Posted on by Sara Hanks Tags: , , ,

It’s 1-SA filing season again for Regulation A filers, and time to make some observations about the consequences of not filing.

We have encountered more than three companies in the last three months that have not filed all (or in one case, any) of their ongoing filings, and yet have requalified their offerings or qualified new offerings. This is a problem.

Let’s start with the ongoing reporting requirements. Assuming a Reg A filer has a December year-end, under Rule 257 it has to file its annual Form 1-K by April 30 and its semi-annual 1-SA by September 28 (subject to adjustments for leap years and weekends). It may also need to file “current” reports on Form 1-U. We’ve posted previously about what to do if you miss these deadlines.*

Rule 251 says the exemption for offers and sales under Regulation A is available for companies that have made all the filings required under Rule 257 for the last two years.

If an issuer makes offers and sales supposedly under Regulation A while it is not in compliance with Rule 257, those offers and sales are not made in compliance with Regulation A and unless the issuer can fit them into another exemption from registration (unlikely), the issuer has made unregistered sales of securities in violation of Section 5 of the Securities Act and those sales are subject to rescission (having to buy the securities back).

“Hold on a minute,” our non-compliant companies might say, “we might have missed making these filings, but we filed a new Regulation A offering on Form 1-A or a PQA and the SEC qualified us, so they must reckon our filings are in order, yes?”

Nope.

Older securities lawyers among us (maybe it’s just me these days) will remember the “Tandy” language that we used to have to put in effectiveness or qualification requests. That says, in effect, that just because the SEC says you are ok to proceed with your offering, it doesn’t mean it can’t come after you later for some issue with your filing. While we don’t have to put that language in qualification requests anymore, that is still the SEC’s position, and they remind us that the issuer is responsible for the adequacy of its filings “notwithstanding any review, comments, action or absence of action by the staff”. Moreover, on any Reg A filing, right there on the cover, we have the mandated statement:

THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

So no, the SEC qualifying your offering does not mean that anyone has signed off on the adequacy of your filing history. (I wish they would, but that’s not what that “QUALIF” posted on EDGAR means).

Issuers, before filing PQAs or new 1-As, check that you are up to date with your ongoing reporting. Brokers and lawyers, you are gatekeepers, so I don’t know how you think you are meeting your professional responsibilities if you don’t check an issuer’s filing history before making those filings. That should be at the top of your due diligence list.

 

 

*If an offering is open for over a year, the issuer also has to file post-qualification amendments (“PQAs”) to its filing to add its ongoing disclosure to the offering circular, but that’s a topic for a future blog post.

 

This article was originally written by our KorePartners at CrowdCheck. You can view the original post here.

Digital Securities That Help You Navigate the Web Safely

Posted on by Oscar Jofre Tags: , , , ,

The internet is often difficult to navigate. On one hand, many wonderful resources can be found for educational purposes, you can connect and communicate with anyone anywhere in the world, and new ways to manage financial investments are accessible at the tip of our fingers. But on the other hand, it can sometimes be difficult to determine the legitimacy of a website or investment opportunity. Fortunately, digital securities are changing the way these transactions are carried out, introducing new levels of transparency and trust when implemented correctly

 

Navigating the Web Safely

 

Some features that help people navigate the web safely include things like two-factor authentication (2FA) or blockchain-based identity management systems. 2FA is a critical security measure requiring users to provide two forms of identification to log into their accounts. This can be something like a password and a fingerprint or a one-time code that is sent to your phone. Blockchain-based identity management systems work similarly, but instead of using passwords, they use cryptographic keys that are stored on a blockchain. This makes it impossible for hackers to access your account unless they have your private key. Both solutions are important for ensuring that only the account holder can access the account. These tools also make it more difficult for hackers to steal your identity by masquerading as you online. By using 2FA or a blockchain-based identity management system, you can help navigate the web safely and protect your online information.

 

Digital securities are an essential part of the digital economy, and KoreConX is committed to making them more accessible and easy to use. Our KoreID feature is just one example of how we are innovating in the realm of digital securities. With KoreID, investors can easily and safely provide their information to regulated platforms. As a result, the need for investors to fill out the same information, again and again, is eliminated, saving them time and hassle. With this digital security innovation, when investors are making investments through JOBS Act exemptions, they are less susceptible to fraud. And for issuers, the KoreID gives them peace of mind knowing that they can easily prove that they are in good standing with FINRA and registered funding portals. Digital securities are an essential part of the digital economy, and KoreConX is committed to making them more accessible, safe, and easy to use.

 

Benefiting from the Innovation of KoreID

 

KoreID is a digital securities innovation that allows investors to navigate the web safely. The feature is an all-in-one platform that reduces the friction of investors spending time filling forms with the same data repeatedly. Users are allowed to provide certified information with one single click, facilitating a smoother investment or reinvestment. This also reduces the known issues in compliance that broker-dealers face when users “fat finger” their information, accidentally misentering their information. 

 

The KoreID is a blockchain-based digital identity that is stored on the user’s device and can be used to log in to any site that accepts KoreID. The user’s data is kept secure and only shared with sites that the user has authorized. KoreID is convenient, safe, and easy to use, making it the ideal solution for investors who want to navigate the web safely. Only verified, regulated participants can be allowed to add the KoreID, giving investors peace of mind and allowing companies to easily maintain compliance efforts.

 

Private Equity is Seeing Potential in the Healthcare Industry

Posted on by Oscar Jofre

As the healthcare landscape continues to change rapidly, private equity firms are taking note and getting involved in the healthcare sector. Private equity firms are now the owners of a growing number of physician groups in the U.S. A study published in JAMA Health Forum suggests that these private-equity-owned practices are linked to increased healthcare spending and patient utilization. The study found that private-equity-owned practices showed a consistent rise in spending through eight quarters after an acquisition, with the average charge per claim increasing 20% and the average allowed amount per claim up 11%. The private equity acquired practices saw visits by new patients increase by 38% and total visit volume rise by 16%, compared to the control group, with a 9.4% increase in the share of office visits for established patients that were billed as longer than 30 minutes.

 

While it’s still unclear why private equity-owned practices are associated with higher spending, one possibility is that private equity firms could be making significant changes in terms of management, operating hours, or improved branding and referrals. Private equity firms typically seek annual returns exceeding 20%, so they need to generate higher revenue or reduce costs. 

 

Why Private Equity for Physicians and Healthcare Companies?

 

Given the current state of the healthcare industry, it’s no surprise that private equity firms are taking an interest in physician groups and the healthcare industry as a whole. In recent years, we’ve seen a rapid increase in the cost of healthcare, and this trend is likely to continue. At the same time, the Affordable Care Act has put pressure on hospitals and physicians to provide high-quality care at a lower cost. As a result, many physician groups are struggling to remain profitable. Private equity firms can provide the capital and resources that these physician groups need to survive and thrive in this landscape. 

 

For those in the general healthcare field, private equity creates a rise in new inventions and treatments for the medical field that can save and improve lives. New companies are constantly being born from the minds of those with interests in improving healthcare. These people have ideas to make treatments more affordable or to create new ones altogether and even design technology that improves the processes of those working in healthcare. However, they are often restricted by a lack of funding. That is where private equity comes in to play an important role in expanding the industry. This type of investment allows these new companies to have the start-up capital they need to succeed. In return, the investors are rewarded with a return on their investment if the company goes public or is sold, all while helping fund a medical solution that can help others.

 

We’re beginning to see private funding options, like those outlined by the JOBS Act, be utilized by medtech companies. However, will physician groups also explore this route as well opposed to traditional private equity funding?

 

Regardless, one thing is clear. Private equity-owned physician groups continue to grow, it will directly impact the care patients receive. Do these groups raise their prices to generate a return for the private equity firm or cut costs and pass that on to the patient? While there are some concerns about how these firms will impact healthcare spending, it’s still too early to tell. We’ll need to wait and see how things play out before we can make any definitive conclusions. 

 

With the availability of the JOBS Act, capital-raising organizations can now seek out new investors and gain the resources they need to grow and compete in this rapidly changing landscape privately. By empowering themselves through education, healthcare practices can stay ahead of the curve, avoid common mistakes and pitfalls, and position themselves for success when raising private capital. 

 

You can view recaps from the recent KoreSummit event on raising capital for Medtech companies to learn more about how healthcare and life science-based companies can utilize the JOBS Act exemptions.

 

KoreClient Spotlight: Stenergy

Posted on by Oscar Jofre Tags: , ,

When Samuel and Leyla Butero decided to start their own business, they knew they had to offer a product that would make a difference in people’s lives, and with Stenergy, they hope to do just that. Stenergy is a health and wellness company that manufactures GluCora, a natural supplement that supports healthy glucose metabolism, and has received approval from Health Canada, the Canadian equivalent of the US Food and Drug Administration. In this recent interview, Samuel and Leyla shared their story of entrepreneurship and why they chose to do a Regulation CF campaign for their business.

 

Working as consultants for EastGate Biotech, a Canadian pharmaceutical company that creates insulin drug delivery technologies for the treatment of Type 2 diabetes, Samuel and Leyla discovered GluCora, a product the pharmaceutical company had decided not to focus on while it developed its core product lines. Leyla, who has long struggled with blood sugar levels, saw the potential of the product and the couple negotiated a licensing agreement with EastGate to be the exclusive manufacturer and distributor of GluCora in the US, Canada, and Central and South America, with first rights to the rest of the world. 

 

The active ingredient of GluCora is the Banaba plant, native to Southeast Asia and known as the crepe myrtle tree in the US. Banaba produces corosolic acid and has demonstrated the ability to improve the metabolism of glucose. The plant has been used for hundreds of years in traditional medicines, but GluCora makes it available in a product that has been approved by the Canadian health regulatory agency and that is available over the counter. Samuel said: “That it’s been shown to be effective and do what it says it’s going to do is really important and we feel that sets us apart from a lot of other natural supplements. We’re not paying a doctor to do an infomercial and say that it works. That’s a very common marketing gimmick, in our opinion, that a lot of supplements use. Health Canada is a third-party, objective health agency from a country that is widely respected for healthcare.”

 

For both Samuel and Leyla, the journey with GluCora has been deeply personal. When Leyla was pregnant with the couple’s first daughter, doctors would tell her that she had high blood sugar, despite avoiding foods that would cause this. They felt an intense stigma–as soon as a doctor saw Leyla’s weight, the doctor would attribute it to poor eating habits and no exercise, even though that was an inaccurate assumption. “We started to do our due diligence and our research and felt that this was something experienced by a lot of women that were having this same issue. Doctors weren’t hearing them,” said Samuel. “With our second daughter, I gained 90 pounds, I had gestational diabetes, and I could not control the weight. No matter what I did, the weight was just coming on,” added Leyla. Additional issues continued post-partum and she sought the help of her doctor, who, unfortunately, was not listening to the concerns that Leyla expressed. “No one would hear me.” 

 

It was at this point that the couple discovered GluCora. “Leyla started taking GluCora and within two weeks, lost 14 pounds,” said Samuel. She was feeling better and had more energy, and the couple realized that bringing GluCora to market was something they would have to do themselves. “I had been doing side hustles before that was even a word,” Samuel said of their journey to become entrepreneurs. “I had also worked in venture capital and private equity for some time, so I knew what it took to put a business together. The number one thing I always noticed from the successes versus failures was that successful businesses have a revenue-generating product or service that is scalable and works. That’s what we feel we’ve discovered in GluCora. We know there’s demand out there from people who have no place to turn to.”

 

To further expand the company, Stenergy has opted to raise capital under the Regulation CF exemption. “The biggest attraction to Regulation CF was visibility and building an ecosystem of not only investors but potential consumers, giving a way to legitimately raise money and work with our investors who are not only excited about the company but a product that could change so many people’s lives,” Samuel finished.

 

By utilizing Reg CF, organizations like Stenergy can bring their product to market quickly and efficiently while interacting with their potential consumers. This provides a unique opportunity for entrepreneurs like Samuel and Leyla Butero to connect with their target market and get the funding they need to bring their products to life.

___________________

Regulation CF(RegCF), D (RegD), A (RegA+) Disclaimer


This communication may be deemed to be a solicitation of interest under Regulation CF (RegCF), D (RegD), A (RegA+) under the Securities Act of 1933, in which case the following applies:

  • No money or other consideration is being solicited, and if sent in response, will not be accepted;
  • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
  • A person’s indication of interest involves no obligation or commitment of any kind; and 
  • An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

The Growth of Online Startup Investments

Posted on by Oscar Jofre Tags: , ,

Investments in online startups have been growing rapidly in recent years, and the trend is expected to continue well into the future, with the number of online startup deals growing nearly 10% in 2022, according to KingsCrowd. This growth can be attributed to several factors, including the increasing popularity of crowdfunding platforms and the decline in venture capital funding.

 

Why the Popularity Surge?

 

Online startup investing offers many advantages over traditional venture capital funding. For one, it’s much easier to get involved. Platforms like Wefunder and SeedInvest make it simple for anyone to invest in private companies. And because these platforms are online-only, there’s no need to travel or attend tedious meetings. Additionally, online startup investing is much more democratic than traditional venture capital funding. Anyone with a computer or smartphone can participate, which opens up investment opportunities to a much wider audience. With startups being able to grow online instead of requiring a physical presence, this migration to digital-only investing was inevitable.

 

Online startup investing is much less risky than traditional venture capital funding. In most cases, startups that raise money through crowdfunding are already well on their way to becoming successful businesses. This means that investors are far more likely to see a return on their investment. Overall, online startup investing is a great way for retail investors to get exposure to high-quality investment opportunities. With the right platform, getting started is easy, and there’s no need to be a financial expert. So if you’re looking for a way to get involved in the tech industry, online startup investing is definitely worth considering. 

 

Growth in Online Startups

 

With the occurrence of the pandemic and the rise of social distancing, there was a dramatic increase in the number of people working from home. This migration to digital-only workforces has been a boon for online startups. With more people working remotely, there’s been a surge in demand for products and services that can be delivered digitally. And as more and more of these startups pop up, it’s no surprise that online startup investments have been on the rise.

 

Interestingly, this trend appears to be here to stay. Even as some companies are beginning to allow employees to return to the office, many are opting to continue working from home permanently. This is good news for online startups, as they can continue to count on strong demand for their products and services. So if you’re thinking about investing in online startups, now is a great time to get started.

 

What’s Next?

 

With crowdfunding platforms reporting an increase in the amount of fundraising done, sometimes as much as double in the first four months of 2022, this method of startup funding is likely here to stay. This rise in online investing has given everyday Americans the chance to get in on the action and invest in some of the most innovative companies in the world. And as the overall economy continues to struggle, it is expected we’ll see even more companies turning to online crowdfunding platforms to raise money. So if you’re looking for a way to invest in the future, online startup investing is definitely something you should consider. With the right platform, it’s easy to get started, and there’s the potential to see significant returns on your investment. And for startups, this is a great way to raise money and show your company to a larger audience online.

 

KoreClient Spotlight: Brent Fawson, COO of Facible

Posted on by Oscar Jofre Tags: , , ,

Working at Facible, Brent Fawson believes that the company is poised to leave a lasting impact on lives around the world by making medical diagnostic testing more accessible. We sat down with Brent and talked to him about the medical industry, his company, and capital raising in the medical field.

Q: Tell me a little more about your company. How do you impact the Medtech space and the customers you serve?

A: Facible Diagnostics is a diagnostics company that uses our revolutionary Q-LAAD technology to take hospital-grade diagnostics out of the lab and to the point of care. Legacy diagnostic technologies often require a tradeoff between speed, accuracy, and ease of use. Q-LAAD technology enables the development of faster and more accurate diagnostic tests that are easier to run, and don’t require complex machinery so they can be run outside of a hospital laboratory making hospital-grade diagnostic testing available anywhere. It’s ideal for underserved and rural areas, urgent cares, physician’s offices or even the home.

Q: What excites you most about your industry?

A: I think with the SARS-CoV-2 pandemic, we have all seen the limitations with some of the legacy technology platforms. To have a revolutionary technology at the forefront of the industry is very exciting. I feel we are just scratching the surface of understanding and using medical data to improve our lives. There are companies out there, like Apple, that are beginning to use this data for research purposes. We can create richer data sets to understand and address big challenges we all face. With the COVID crisis, we have all seen not only current deficiencies in diagnostics, but also an unprecedented investment at the same time which will work to improve our lives.

Q: How do you see the LSI MedTech event having an impact on your company?

A: We are really excited to meet with like-minded people who understand the value a company like Facible can bring to the world through their partnership. We have a unique vision to offer investors and partners and love to collaborate and explore the endless possibilities of where our technology can go.

Q: Now that your company will be using Regulation A+ for your next offering, how do you see this helping your company?

A: A startup like Facible is always at risk of choosing the wrong funding pathway. Biotechnology development is expensive and it’s easy to start chasing money to keep the company going. You then run the risk of partnering with investors with different goals, objectives, and understanding of how best to use the funds provided.  We feel that because our technology is so revolutionary, we want to see our vision realized and Regulation A+ is the best path toward making that happen. This also is a great way to allow people that have supported us all along to finally be able to invest in our future.

Q: Why do you think education on RegA+ places such a vital role in expanding access to capital for medical companies?

A: Right now, there are very traditional ways to raise money. It’s such a well-worn path, it’s great to have these other alternate options out there and understand them. As we started looking at Reg A+ a couple of months ago, we knew nothing about it. It’s vital that entrepreneurs understand all of their options for capital to allow their company to be as successful as possible. Along with that, Reg A+ is so new that there are not many people that really understand how it works. It’s only through talking to people like Oscar (CEO, President, KoreConX) and Doug (Senior Principle, Regulation D Resources) that we have been able to understand it.

Q: What effect do you think Reg A can have on Medtech companies in general?

A: Medtech development is expensive. For a small company who has great ambition, amazing science, but few institutional connections it can be nearly impossible to fund a company. To have access to a broader capital market allows us to sell our vision directly to investors that understand and appreciate the impact that these emerging technologies can provide.

Q: What advice would you give a young Medtech entrepreneur as they begin their journey through capital raising and building their company?

A: You must have a good plan. You need to be willing to test your ideas with the right people so that you understand what value to bring. Make sure you are surrounding yourself with people who are willing to be critical. I have seen many companies try to move without fully vetting their vision. And beyond that, really try to understand what it’s going to take to bring your product to market. It’s an expensive and challenging process so make sure you go in with your eyes wide open.

___________________

Regulation CF(RegCF), D (RegD), A (RegA+) Disclaimer


This communication may be deemed to be a solicitation of interest under Regulation CF (RegCF), D (RegD), A (RegA+) under the Securities Act of 1933, in which case the following applies:

  • No money or other consideration is being solicited, and if sent in response, will not be accepted;
  • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
  • A person’s indication of interest involves no obligation or commitment of any kind; and 
  • An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

Labor Day: Democratization and Opportunities to Create Jobs

Posted on by Oscar Jofre Tags: , , , ,

The growth in Regulation A+ and Regulation CF offerings fuels entrepreneurship and job growth in the United States. Since 2016, there have been over 4,600 capital offerings utilizing Reg A+ or CF, with over $500 million raised in 2021 alone. This capital helps companies grow, create jobs, and positively impact their local communities. Crowdfunding is a robust tool for businesses to secure funding, with an average of 43.8% of pre-revenue startups successfully using this method.

 

Crowdfunded Capital and Democratization

 

When businesses utilize crowdfunding, they can access a much larger customer base, allowing them to have a more significant impact on their local communities. it is particularly well-suited for getting loyal customers, employees, suppliers, and other stakeholders to become investors in your company. Crowdfunding enables the democratization of the private capital market by giving these parties an opportunity to participate in the investment process, something that has not been practical before with traditional investing. For many companies, this unlocks a powerful opportunity and  42% of raises reach their goal in 3 days. 

 

Creating Job Opportunities

 

With over $1 billion in capital raised through Reg CF at an average of $1.3 million per raise, these businesses create innovation and bring economic change to local communities in the form of spending and jobs. An estimated $2.5 billion went into local communities from crowdfunded companies in 2021 alone, with money changing hands as much as six times before leaving the local economy. This demonstrates how crowdfunding directly impacts many communities across the country. It brings money to a community by creating jobs; companies that utilize regulated crowdfunding support over 250,000 American jobs across 466 industries. That number is expected to grow as the private market continues to expand. 

 

Crowdfunding allows all types of businesses to access the capital they need to grow and create jobs through Reg A+ and Reg CF. Between 2000 and 2019,  small businesses created 10.5 million US jobs, while large companies only created 5.6 million, according to 2020 data from the US Small Business Administration. This highlights the importance of small businesses within the economy. However, many small businesses have not traditionally had the same access to capital as large ones. This changed with the JOBS Act, increasing the availability of capital for these small businesses and leveling the playing field. As these companies continue to receive capital from the JOBS Act exemptions, the economy continues to benefit from the democratization of capital. 

 

It’s not only the number of jobs that are important but also the quality of those positions. Good jobs lead to a better living standard. When people have good jobs, they can afford to make purchases, give their children better access to education, access healthcare whenever needed, and many other positive benefits for these individuals. At the same time, they support businesses within their community, which helps those grow as well. A strong economy also attracts business investment from other parts of the country and the world. All of these factors lead to more jobs, and the cycle continues.

 

Investing in the Future

 

The expansion of crowdfunding presents opportunities for anyone interested in becoming an investor, with a chance to get in on the ground floor of the next big thing, while also supporting businesses and creating jobs. It’s a win-win for everyone involved, and it all starts with the democratization of capital. When you invest in a company through crowdfunding, you can invest in your community. The money that is raised through these offerings stays local, and as the businesses grow, they pump even more money back into the economy.

 

Crowdfunding is an excellent way to support businesses and create jobs, but it’s also a great way to invest in the future. With the industry expected to continue to grow, now is the time to get involved. With opportunities for everyone, from accredited to retail investors, there has never been a better time to get involved in the democratization of capital. So this Labor Day, remember that when you support businesses through crowdfunding, you also help create jobs and create a brighter economic future.

 

The SEC Can Stop Your Regulation A Offering At Any Time

Posted on by Mark Roderick Tags: , , , , , ,

The SEC has two powerful tools to stop your Regulation A offering anytime.

Rule 258

Rule 258 allows the SEC to immediately suspend an offering if

  • The exemption under Regulation A is not available; or
  • Any of the terms, conditions, or requirements of Regulation A have not been complied with; or
  • The offering statement, any sales or solicitation of interest material, or any report filed pursuant to Rule 257 contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in light of the circumstances under which they are made, not misleading; or
  • The offering involves fraud or other violations of section 17 of the Securities Act of 1933; or
  • Something happened after filing an offering statement that would have made Regulation A unavailable had it occurred before filing; or
  • Anyone specified in Rule 262(a) (the list of potential bad actors) has been indicted for certain crimes; or
  • Proceedings have begun that could cause someone on that list to be a bad actor; or
  • The issuer has failed to cooperate with an investigation.

If the SEC suspends an offering under Rule 258, the issuer can appeal for a hearing – with the SEC – but the suspension remains in effect. In addition, at any time after the hearing, the SEC can make the suspension permanent.

Rule 258 gives the SEC enormous discretion. For example, the SEC may theoretically terminate a Regulation A offering if the issuer fails to file a single report or files late. And while there’s lots of room for good-faith disagreement as to whether an offering statement or advertisement failed to state a material fact, Rule 258 gives the SEC the power to decide.

Don’t worry, you might think, Rule 260 provides that an “insignificant” deviation will not result in the loss of the Regulation A exemption. Think again: Rule 260(c) states, “This provision provides no relief or protection from a proceeding under Rule 258.”

Rule 262(a)(7)

Rule 262(a)(7) is even more dangerous than Rule 258.

Rule 258 allows the SEC to suspend a Regulation A offering if the SEC concludes that something is wrong. Rule 262(a)(7), on the other hand, allows for suspension if the issuer or any of its principals is “the subject of an investigation or proceeding to determine whether a. . . . suspension order should be issued.”

That’s right: Rule 262(a)(7) allows the SEC to suspend an offering merely by investigating whether the offer should be suspended.

Effect on Regulation D

Suppose the SEC suspends a Regulation A offering under either Rule 258 or Rule 262(a)(7). In that case, the issuer is automatically a “bad actor” under Rule 506(d)(1)(vii), meaning it can’t use Regulation D to raise capital, either.

In some ways, it makes sense that the SEC can suspend a Regulation A offering easily because the SEC’s approval was needed in the first place. But not so with Regulation D, and especially not so with a suspension under Rule 262(a)(7). In that case, the issuer is prevented from using Regulation D – an exemption that does not require SEC approval – simply because the SEC is investigating whether it’s done something wrong. That seems. . . .wrong.

Conclusion

As all six readers of this blog know, I think the SEC has done a spectacular job with Crowdfunding. But what the SEC giveth the SEC can taketh away. I hope the SEC will use discretion exercising its substantial power under Rule 258 and Rule 262(a)(7).

 

This post was written by KorePartner Mark Roderick and the original post can be found here. Mr. Roderick is an attorney at Lex Nova Law, where he leads the firm’s Crowdfunding and Fintech practice. He writes a widely-read blog at CrowdfundingAttorney.com and is a featured speaker at Crowdfunding and Fintech events across the country, including New York, Texas, Chicago, and Silicon Valley. Mark is one of the most prominent Crowdfunding and Fintech lawyers in the United States. He represents portals, issuers, and others across the country and around the world.

KoreClient Spotlight: Notarized.com

Posted on by Oscar Jofre Tags: , , ,

Notarized.com is a company that provides on-demand traveling notary services nationwide to businesses and individuals, as well as offering remote online notarization services in a convenient and secure way to sign documents online. Their system is encrypted with the highest level of security, and all documents are certified and legally enforceable. Recently we spoke with Notarized.com CEO Omar Kubba about the company and what they hope to accomplish with their RegCF offering.

 

With a passionate team, Notarized.com wants to change how people view closings. Streamlining the notary order process, Notarized.com makes it easy for busy people to find a notary, schedule an appointment and get the job done quickly. Notarized.com also offers a cloud-based notary solution that is convenient and easy to use for scheduling a remote online notarization. This process protects your confidential information and electronic signature with encryption and offers a legally binding document. Customers can sign documents electronically from anywhere in the world at any time, or they can schedule a traveling notary on demand to come to them, documents in hand. 

 

A remote online notarization solution allows the entire document signing process to be seamlessly conducted in the cloud, eliminating paper, hassles, and wasted time while saving money. This is an excellent solution for title companies, independent escrows, real estate professionals, lenders, and attorneys.

 

Omar Kubba founded Notarized.com in December 2016. As a second-generation title professional with over 20 years of sales experience in the title insurance industry, Omar is a multiple award-winning sales executive ranked in the top 1% of title professionals in the nation. “My firsthand experience in the industry highlighted inefficiencies that could be solved with a signing solution. I started the company to create a better process,” said Kubba. Notarized.com has been entirely self-funded since its inception in 2016. Notarized.com only began the journey of capital raising because they have an extensive plan to expand the company to serve their clients better. “Because of what we were trying to offer, we decided to raise capital to bring that dream to fruition,” said Omar.

 

In the future, Notarized.com aims to expand its product and service offerings to clients, increasing the number of verticals it operates under. In their roadmap is a complete overhaul of the online notarization experience to include a sophisticated, innovative, and revolutionary remote, online notarization platform, and mobile app, a secure e-signature solution, nationwide deed preparation software engine, a Notarized.com certified training program for notaries, and a contract lifecycle management (CLM) platform that empowers users to manage every stage of business contracts, among other additions to its suite of capabilities. 

 

To help achieve these goals and facilitate the capital raising process, Notarized.com has contracted 21st Century Capital to guide them through the process of capital growth. With 20+ years of capital experience, 21st Century Capital has a track record of delivering results to the companies they work with. 

 

Notarized.com has chosen to raise the capital for its expansion via the crowdfunding provisions of the JOBS Act and is using the KoreConX All-In-One Platform. “Notarized.com has an opportunity to present itself to a huge group of worldwide investors and let these people get in on the ground floor. While I still raise capital the traditional way, [RegCF] has changed my way of thinking about raising capital,” said David Bernard, Notarized.com advisor.

___________________

Regulation CF(RegCF), D (RegD), A (RegA+) Disclaimer


This communication may be deemed to be a solicitation of interest under Regulation CF (RegCF), D (RegD), A (RegA+) under the Securities Act of 1933, in which case the following applies:

  • No money or other consideration is being solicited, and if sent in response, will not be accepted;
  • No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
  • A person’s indication of interest involves no obligation or commitment of any kind; and 
  • An offering statement, which would include a preliminary offering circular, has not yet been filed with the SEC.

Crowdfunding Platforms Pose a Significant Opportunity for Global Investors

Posted on by Oscar Jofre

Across the world, there are an estimated 4.7 billion people with the means to invest in the private capital market. While this may be a rough estimate, it provides a good starting point for understanding the reach of potential investors worldwide. And, thanks to the rise of online crowdfunding platforms, it is easier than ever for these potential investors to make their investments. Through these platforms, both retail and accredited investors can invest small sums of money in startups looking to raise capital through the JOBS Act exemptions. 

 

This can be risky, but it can also be very rewarding if the startup is successful. The general principle of investment risk is to never invest more than you can afford to lose. But, with smaller individual investors, people who can only afford to lose a little are no longer excluded from these opportunities. However, any reputable equity crowdfunding platform has strict compliance standards that ensure that the companies being funded are legitimate and compliant with all securities laws, thus, reducing some risks to the investors. When both funding portals and issuers adhere to all compliance requirements, the risks of losing money to fraud or incompetence. Still, investors must keep in mind that regulations are unable to protect them from changes in the market.

 

The Landscape of Funding Platforms

 

In the United States, there are over 70 FINRA-regulated crowdfunding platforms that companies can choose to utilize for their offerings. Being a FINRA-registered platform ensures that funding portals are following FINRA regulatory oversight and reporting requirements, introducing a layer of protection for investors against fraud. Before choosing to invest, potential investors should check with FINRA to ensure the funding portal is regulated. 

 

Equity crowdfunding is a relatively new phenomenon, but it has already impacted the startup ecosystem and companies have already raised more than $1 billion using RegCF alone since the JOBS Act was enacted in 2012. By allowing companies to raise capital without an IPO while allowing investors to leverage the power of the Internet to capitalize on up-and-coming companies, everybody wins.

In 2021 alone, equity crowdfunding raised over $500 million for companies. This means that businesses have a wide range of short- and long-term investment sources to choose from seeking capital to grow and support their business objectives. With equity crowdfunding, various industries can benefit from improved access to capital, while investors can prosper from getting in with a company on the ground floor.

Arcview Access & Cannabis Investment Summit Takes Places October 19th-21st in NYC

Posted on by Oscar Jofre Tags: , , ,

If you’re an investor, cannabis company, or industry specialist looking to make connections in the legal cannabis industry, the upcoming Arcview Access & Cannabis Investment Summit is not to be missed. Taking place in New York City from October 19th-21st, this event will bring together some of the biggest names in the business for three days of networking and learning. Arcview has been a trusted global leader in the cannabis industry for years, and this event is highly anticipated. This summit offers investors, companies, and entrepreneurs unparalleled access to top regulators and an opportunity to pitch their businesses to a panel of expert judges in hopes of winning investment funding. Attendees can expect two days of engaging main stage content, workshops, and panels on topics such as capital raising, company valuations, and opportunities in the cannabis market. 

 

Arcview serves the hemp and cannabis industry, with a keen focus on investing, education, and networking. Approximately 60% of attendees are expected to be investors in public cannabis companies, private equity funds, accredited individual capital, and more. Another 30% of the audience is expected to be cannabis companies in various niches with company valuations ranging from $2m to $200m, while the rest are expected to be industry specialists. 

 

The cannabis investment summit is an excellent event to attend for many reasons. For starters, it gives investors an opportunity to learn more about the industry and explore potential investment opportunities. Additionally, it’s a great opportunity to network with other like-minded individuals and make connections that could prove to be beneficial down the road. Whether you are in the industry or just looking to invest, this three-day event will have something for you. The event will take place at Convene, located at 45th and Park Ave in Manhattan. It will start with a reception on October 19th and continue into two full days of highly curated content, speeches, and even a field trip.

 

Come network with some of the biggest names in the business, learn from top regulators, or pitch your businesses to a panel of expert judges. If you want to make connections and do business in the legal cannabis industry, this event is for you! You can register now here.

Join the all-in-one platform empowering private capital markets.

Free forever, Kore makes it easy for participants in private capital markets to manage their investment portfolios, raise capital, and meet global compliance standards along every step of the way.

Sign up, it's free! Book a call