Financing / Crowdfunding : New laws re: CROWD FUNDING by Arlaine Rockey

This info is from experienced investment attorney Russell C. Weigel, III. (Russ is a friend of mine from law school. I thought filmmakers from Stage 32 might be interested in this new legislation): Yesterday Congress finalized the Jumpstart our Business Startups (JOBS) Act, and President Obama has said he will sign the legislation. The JOBS Act has some immediate and important impacts on securities industry participants and companies seeking capital. Here are the highlights: · Regulation D Rule 506 private placements may be solicited via general solicitation or advertising, provided that all purchasers are accredited investors. · The cap on Regulation A offerings will be raised from $5 million to $50 million. The securities offered under this exemption may be offered in a public offering and are free trading, but there are restrictions on who is eligible to purchase. The financial statements of the issuer must be audited. · Crowd funding will be legal. An issuer can raise up to $1 million, provided that investors with less than $100,000 in assets or net income can invest no more than the greater of $2,000.00 or 5% of their annual income or net worth, and investors with more than $100,000 in annual income or net worth may invest up to 10% of their annual income or net worth not to exceed $100,000. There is no limit on the number of crowd funding investors, and crowd funding investors do not count against the threshold number of shareholders that triggers mandatory issuer periodic reporting under the Exchange Act. · Crowd “funding portholes” in Rule 506 offerings will be exempt from broker dealer registration so long as the platforms are not compensated based upon transaction results. SEC registration of “funding portholes” will be required. · Due diligence providers in Rule 506 offerings will be exempt from broker dealer registration so long as they do not give investment advice or recommendations on the purchase of securities for which they are separately compensated based upon securities purchases or sales. · A new category of issuer, the Emerging Growth Company (EGC), has been declared. EGCs may have up to $1 Billion (not a misprint) in gross revenues before losing EGC status. Prior to an effective registration statement, EGCs may communicate with qualified institutional buyers and analysts; investors may communicate with analysts, and brokers may distribute research. EGCs need only a two-year audit opinion included in registration statements and annual reports. In addition, Congress placed short time limits on the SEC to promulgate rules to put the new provisions into effect. If you would like a copy of the new legislation, please send me an email. Kind Regards, Russell C. Weigel, III Russell C. Weigel, III, P.A. 5775 Blue Lagoon Drive, Suite 100 Miami, Florida 33126 Miami-Dade: (786) 888-4567 Fax: (786) 787-0456 E-mail: Info@InvestmentAttorneys.com Web: www.InvestmentAttorneys.com