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Friday, November 23, 2007
When people looked for a mortgage using only local lenders, options were greatly limited. If you couldn't find a good deal in your immediate area, you could make the drive to neighboring cities and begin the application process all over. Today, thanks to the hundreds of lenders who use the Internet to market their service, you are no longer bound by geographic restrictions. Instead, you can shop for a mortgage from lenders across the country and even around the world. Another great benefit of searching for a mortgage from an online lender is that these lenders are in direct competition for your business. For the consumer, this means that you're more likely to find great rates on the mortgage you're applying for. Because you're shopping with multiple lenders at the same time, it's also easy to compare the terms of those loans making it easier to choose a mortgage that suits your circumstances. Remember that you still have to be smart about the shopping process. Don't offer up personal financial information such as social security numbers, bank account numbers and other identifiers until you are making an application. During the shopping process, you should be able to get interest rates, terms and other information without providing that kind of identification. Be wary of up-front fees and lenders that guarantee you'll be approved for a mortgage regardless of credit history. Take time to check out the company's privacy policy on the website before you apply online and verify that the company actually exists. A reputable lender will have a home office with a physical address and real people who answer the phone when you call. About The Author: Jeff Lakie is the founder of Online Mortgage Quote a website providing free mortgage quotes Going Public by Way of Regulation D (504) Offering Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) provides three exemptions from the registration requirements, allowing some smaller companies to offer and sell their securities without having to register the securities with the SEC. Rule 504 or Regulation D provides an exemption from the registration of the federal securities laws for some companies when they offer and sell up to $1,000,000.00 of their securities in any 12 month period. A company can use this exemption so long as it is not a Blank Check company and does not have to file reports under the Securities Exchange Act of 1934. Also, the exemption generally does not allow companies to solicit or advertise their securities to the public, and purchasers receive restricted securities, meaning that they may not sell the securities without registration or an applicable exemption. Rule 504 does allow companies to make a public offering of freely tradable securities but only if one of the following circumstances is met: (1) The company registers the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors; (2) A company registers and sells the offering in a state that requires registration and disclosure delivery and also sells in a state without those requirements, so long as the company delivers the disclosure documents required by the state where the company registered the offering to all purchasers (including those in the state that has no such requirements); or (3) The company sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as the company sells only to "accredited investors. An accredited investor is defined by federal securities law as: . a bank, insurance company, registered investment company, business development company, or small business investment company; . an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; . a charitable organization, corporation, or partnership with assets exceeding $5 million; . a director, executive officer, or general partner of the company selling the securities; . a business in which all the equity owners are accredited investors; . a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase; . a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or . Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. . even if a company makes a private sale where there are no specific disclosure delivery requirements, a company should take care to provide sufficient information to investors to avoid violating the anti fraud provisions of the securities laws. This means that any information a company provides to investors must be free from false or misleading statements. Similarly, a company should not exclude any information if the omission makes what is provided to investors false or misleading. Any information provided to an investor whether written or oral must be accurate in order not to violate the anti fraud provision,All securities offerings are subject to this provision. This process provide a far less expensive way to take your company public than the traditional IPO, and it also provide a much faster track to having your company's shares listed and trading. The Regulation D (504) offering is one method of going public we recommend to our clients, we normally conduct a review of the company to see if going public is a viable option for them. Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues. For other option please visit our website: www.genesiscorporateadvisors.com Email: josephquinones@genesiscorporateadvisors.com Why are Reverse Mergers Often the Victims of Short Sellers? There is a great deal of abuse going on in the OTC Bulletin Board Market and a lot of money is being made as result of it. Regulators are trying to deal with the problem but are unable to put a halt to it, unless they take drastic steps which will be detrimental to the small and micro-cap market. The small and micro-cap market is an essential part in bringing small and mid-size companies public through Reverse merger and Regulation D (504) offering, these are the two most popular methods used by small and mid-size companies to go public. This two avenues are prefer by small and mid size companies because they simpler and less expensive than the traditional IPO, It can be refer to as a simplified fast track method by which a private company can become a public company. I described the process in detail how small and mid-size companies can go public in previous articles, if you miss them, you can email me and I will be happy to explain it. I have over 25 years of experience in the securities industry as market maker and trader. In my own brokerage firm and with a couple of the largest wholesalers in Wall Street. I believe my experience qualify me to write on the subject with clarity and honesty from a birds eye view. I believe in short selling as a legitimate way of providing liquidity to the market as an essential part market making, that is not what I am referring to. A short position is established when somebody sells a stock they do not own hoping to be able to buy it bac at a later day for a lower price. There are several reasons why selling short the stock of companies that have gone public through a reverse merger is profitable and easy, I will identify them and suggest ways that this can be stopped once all for all without affecting the legitimate short seller who are willing to sell and bear the risks associated with carrying a short position. Reason number one (1). Corporate shells, in order for an operating private company to go public in a Reverse merger it must merger with a public shell. A public shell is what remains when a public company is bankrupt or liquidated, also some shell are created as Blank Check companies, A Blank Check company has shareholder and maybe some cash in its books but nothing else, they are created by enterprising entrepreneurs for the sole purpose of merging an operating private company into it. What happens is that when the shell owner sell the shell to the private company he retains 5-15% of the shares for himself, on top of collecting any where upward of $500,000.00 for himself. And even if he signed and agreement not to sell for a year, most of these people can not be trusted and will at some point dump the stock or have somebody create a short position in their behalf. Solution: The shell owner must be made to sell the entire position and be content with the money, which in most cases represents an enormous profit. I don't have anything against anybody making a lot of money, I am all for it because I also stand to make a lot of money, I am against the way they do it. (2). The shareholder base: In order for a company be listed on the NASDAQ Small-Cap market or the OTC Bulletin Board it must have a specified number of shareholders to qualify for listing. (2A). Improper due diligence: Prior to purchasing a shell the private company along with the consultant that they retain to assist them in the Reverse merger should do a complete review of the shareholder list. some of those shareholder may have excessive number of shares and the true beneficial owner may be the shell owner or the consultant himself, there are a lot of smooth talking wolves posing as consultant who are operating in conjunction with the shell owner. Solution: First run the consultant's named and his previous employer through google and see if he has been convicted of any securities related crimes and has been barred from participating in any stock related transactions. Second write the regulator and request that consultants be required to have a website with their name on it, most of this unscrupulous character operate in a stealth manner so that regulators can't detect their activities. Petition the Securities and Exchange commission requesting a reduction in the number of shareholders require for listing, and if a shell has too many shares outstanding don't buy it! (3), Market Makers: Market makers in OTC Bulletin Board Securities are permitted to maintain a short position in securities that they are acting as market makers, but what some trader do is they register for a stock and go out sell stock on the bid (the price other market makers are willing to pay) and immediately cease to make a market in the stock and keep the short position. Technically when a trader does this, he is circumventing the intent of the rule which allows market makers to short a stock in his role as a market maker. Solution: Require traders to remain acting as market makers until they purchase the stock back, also regulators must make clearing agent to enforce the rules concerning the delivery of the securities on settlement or execute a buy in (buy the stock back and charge the seller) if the seller fails to deliver the stock within the prescribed period of time. I believe that these reforms will go a long way in altering the climate for participant in Reverse merger, and in removing the vultures the prey on unsophisticated business owner from the market place. But until the regulators act the responsibility is on the business owner to perform the proper research, if I sound like a crusader maybe that is because the industry has been good to me and I hate to see the vultures taking it over. Joseph D. Quinones, President of Genesis Corporate Advisors has spent over 25 years in the securities industry. In 1992 he founded JDQ Financial Group, Inc. and proceeded to build it up from a one man operation to the point where it employed many traders, advised numerous client and generate millions in revenues. If you are thinking about doing a reverse merger and have questions contact us at: www.genesiscorporateadvisors.com Email: josephquinones@genesiscorporateadvisors.com |
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