Launch of Regulation Crowdfunding! May 16, 2016 Sponsors:

Congress Responds – JOBS Act As part of the JOBS Act of 2012, Congress directed the SEC to develop new rules that would make it easier for companies to raise capital from investors.

JOBS Act: Key Components Advertising in Connection with Sales to Accredited Investors Crowdfunding for All Reg A+ | “Mini-IPOs” Title II Title III Title IV Also called Rule 506(c) Became effective in October 2013 Growing in popularity SEC released proposed rules in October 2013. Revised rules were released on October 30, 2015 and go into effect today SEC released final rules in March 2015. Became effective in June 2015 Not very useful for small businesses

Title III: Regulation Crowdfunding Issuer Offering Limit: $1 million in 12 months Investor Limits: If annual income/net worth < $100,000, limit is greater of $2,000 or 5% of the lesser of annual income/net worth If annual income/net worth ≥ $100,000, limit is lesser of $100,000 or 10% of the lesser of annual income/net worth

Title III: Regulation Crowdfunding Funding Portals: Companies must sell through a portal Registered with the SEC and FINRA Handles funds for the company Posts company disclosure information

Title III: Regulation Crowdfunding Company Requirements: Disclosure document, including MD&A discussion and annual reporting Issuers will be required to file Form C prior to commencement of the offering, during the offering if material changes occur, annually after the offering, and at the conclusion of their reporting obligations.

Title III: Regulation Crowdfunding Financial information for two previous years: -- tax return/financials ≤ $100,000 -- reviewed financials ≤ $500,000 -- audited financials > $500,000 (except first time reviewed financials)

Title III: Regulation Crowdfunding Certain advertising restrictions do apply (see Rule 204) Reg CF offerings will not be integrated with other offerings Restrictions on transfer exist within the first year of purchase (except limited circumstances)

Planning For Your Offering

Planning For Your Offering

Planning For Your Offering

Planning For Your Offering

Parting Thoughts

Parting Thoughts

Questions? info@mnvest.org