Replies to post #30613 on MSB Global Capital Corp. (MSBM)

[riskybiz1]

I know most people here already know about this already. But in case anyone doesn't, here it is again.




504 Program
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Regulation D 504 Offering: allows companies to raise up to a maximum of $1,000,000 in a 12 month period - the exemption is renewable meaning the company can use the 504 program again 6 months from their last securities sale under 504.
The 504 is the least restrictive of the Regulation D programs regarding structure, financials, disclosure, and investor suitability. A 504 offering allows a company to sell securities to an unlimited number of purchasers without regard to their sophistication or experience - although some States may limit the company to 35 non-accredited investors while still allowing an unlimited number of accredited investors.

The 504 is the most popular and widely used of the Regulation D programs. Many companies use 504 for an initial round and then float a 506 for a larger second round - both offerings can be done in a 1 year period because they are separate exemption programs.

The 504 program is available for private corporations only. Public reporting companies cannot use the 504 program.

The 504 program is regulated at the Federal level and State level (the State the investor resides). Companies using the 504 program must file a Form D notification filing with the SEC (included in our service) and may be subject to informational filings at the State level depending on the residency of the investor. We have streamlined the State filing process - most companies only need to file in 1-5 States to sell out a 504 offering.


REGULATION D PROGRAMS

504 PROGRAM

506 PROGRAM

SCOR PROGRAM

ADVANTAGES OF A REG D OFFERING


THE REGULATION D OFFERING PROCESS









©2007 Regulation D Resources Enterprises, Inc. - All rights reserved. | Privacy Statement |

[makesumgravy]

Its a strange arrangement that I don't clearly understand. The 505's and the 506's have to be restricted shares. These are hard to sell less there something spectacular about the company........this is one way of doing financing without all the shares getting dumped into the market or issuing free trading shares......

[JohnIraq]

...before I address your specific post Riskybiz1, I'd like to apologize for my lack of posts recently, especially to loof who has asked about my absence.

A couple of weeks ago, I posted this....

http://investorshub.advfn.com/boards/read_msg.asp?message_id=22596611

To date, I have received 12 responses..., although they have been from the most prolific and prominent users of this board, with boardmarks in the high 200's, its not the kind of support I was hoping for....

Regardless, I have been attempting to communicate with out CEO by e-mail, and I will have more to add on that in the next few days.

I will say this however, I refuse, absolutely, to be brow beaten or submit to 'suggestions' that I may be the focus of legal action as a result of anything I have posted in this forum, by any individual.

I am quite confident, (with one exception, a post which I submitted in a hurry and subsequently apologized and retracted portions of)... in the facts that I have posted on this board, as almost without exception, they were furnished to me by State or Federal Officials, and were not supposition or inuendo on my part (I have a large file of e-mails to support this...)

Further, I would strongly suggest that no other IHub poster submit to any kind of scare tactics in a similar vein.... we are, I feel (with some quite specific exceptions from posters who were patently wrong and quite out of order in their submissions), on quite solid ground here, and we, collectively, as a group of RSDS investors, should not be the individuals held to account here... that fact, to me, is quite obvious.

Now, to your post....

I'm not sure the clock issue on a 504 is quite a clearly defined and understood as we may think it is..., I'm not suggesting I have an answer for you, but below is a message I sent to a very knowledgable individual who is 'in the business' asking for clarification and his response.... I'm still not absolutely sure what the answer is, but please feel free to expand on my thought process below if you feel so inclined.

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Hi xxxx,

I've managed to tie myself into something of a knot in an attempt to interpret one particular aspect of Regulation D, Rule 504 and was hoping you might be able to help me unpick it...

On the SECs web page, covering Rule 504 of Regulation D, http://www.sec.gov/answers/rule504.htm the first paragraph they describe the exemption from registration requirements as follows:

Rule 504 of Regulation D provides an exemption from the registration requirements of the federal securities laws for some companies when they offer and sell up to $1,000,000 of their securities in any 12-month period.

It clearly states 'in any 12-month period'. The SECs Rule 504 of Regulation D web page links to The University of Cincinnati College of Law, Secutires Lawyer's Deskbook web pages, where
I subsequently read through the Rule 501 Definitions and Terms used in Regulation D http://www.law.uc.edu/CCL/33ActRls/rule501.html the Rule 502 General Conditions to be met http://www.law.uc.edu/CCL/33ActRls/rule502.html and their own Rule 504 Web Page http://www.law.uc.edu/CCL/33ActRls/rule504.html .

I am struggling on two fronts, the first is the calculation of the aggregate offering price under Rule 504 from the following page http://www.law.uc.edu/CCL/33ActRls/rule504.html :

2. The aggregate offering price for an offering of securities under this Rule 504, as defined in Rule 501(c), shall not exceed $1,000,000, less the aggregate offering price for all securities sold within the twelve months before the start of and during the offering of securities under this Rule 504, in reliance on any exemption under section 3(b), or in violation of section 5(a) of the Securities Act.

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Note 1: The calculation of the aggregate offering price is illustrated as follows:

If an issuer sold $900,000 on June 1, 1987 under this Rule 504 and an additional $4,100,000 on December 1, 1987 under Rule 505, the issuer could not sell any of its securities under this Rule 504 until December 1, 1988. Until then the issuer must count the December 1, 1987 sale towards the $1,000,000 limit within the preceding twelve months.

Note 2: If a transaction under Rule 504 fails to meet the limitation on the aggregate offering price, it does not affect the availability of this Rule 504 for the other transactions considered in applying such limitation. For example, if an issuer sold $1,000,000 worth of its securities on January 1, 1988 under this Rule 504 and an additional $500,000 worth on July 1, 1988, this Rule 504 would not be available for the later sale, but would still be applicable to the January 1, 1988 sale.[/b/

On the face of it, that seems quite clear, but then I read the following and it only served to confuse my understanding of the calculation of the aggregate offering price. This is from the Rule 502 General Conditions to Be Met page http://www.law.uc.edu/CCL/33ActRls/rule502.html

The following conditions shall be applicable to offers and sales made under Regulation D:
Integration. All sales that are part of the same Regulation D offering must meet all of the terms and conditions of Regulation D. Offers and sales that are made more than six months before the start of a Regulation D offering or are made more than six months after completion of a Regulation D offering will not be considered part of that Regulation D offering, so long as during those six month periods there are no offers or sales of securities by or for the issuer that are of the same or a similar class as those offered or sold under Regulation D, other than those offers or sales of securities under an employee benefit plan as defined in rule 405 under the Act.

The former seems to indicate a 12 month period from the first registered sale of securities under a specific Reg D Rule 504, whereas the latter seems to suggest a period covering 6 months prior to the start of a Reg D offering and 6 months after its completion.

I am trying to understand the following hypothetical situation; If a Company instigates a Reg D offering begining on June 1st 2007 and sells securities under Rule 504, culminating in a final sale which totals $1 million, and exhausts that particular Reg D offering on March 1st 2008, a period of 9 months from start to finish, on what date could they legally begin to offer securities for sale under a new Reg D Rule 504 Offering...?

I understand that securities sold under Rule 505 and 506 could run concurrently with a Rule 504 offering, but I dont believe that to be an issue here, my focus therefore is squarely on Rule 504.

Thank you in advance for taking the time to respond (at your convenience as always), to this question Mark.

Cheers, J.



.... and his response.....


John, I'm sorry. There's no way I can get around to even reading this carefully, much less responding, until next weekend at best. I've got projects from employees, plus two new business projects, that require my attention. A quick glance at your question seems to indicate that it's about time clocks on Section 504's. I don't think I have the answer off the top of my head, I may have it in one of my reference texts, but, if not, I'll get it from one of our attorneys.

Once again, I apologize.



I will endeavour to post more in the next few days....

Cheers, J.