August 19, 2007
This comment is coming from a Small Business Owner.
I operate 3 daily news digests (small format daily newspapers). In an effort to raise capital for serious expansion, the SEC and Blue Sky states are putting huge road blocks.
I have heard the arguments for and against easy Access to small business in the market, with all that aside, here is my comments.
FACT. It cost a small business at least $50,000 to get a SB-@ filing out the door of the SEC. ($36,000 just in law fees)
FACT. The unconditional rules of the Blue Sky States racks that up another $65,000 in fees plus $5000 in attorney fees per state. Now we are close to $150,000. It is uncostitutional because the Judge gave no case file for reference and to be regulated by the State is unfair if you are regulated by the FEDS. Plus, if a SRO gives you the go ahead for a listing (Big Business really) then the Blue Sky does not apply except for oversight and prosecution.
First, do away with the no reporting. If you do a sb registration, keep up the quarterly filings. The provision limiting the reporting after a year is why the extra expenses of Blue SKy exsists.
What is wrong with that. Everything. You pay a big price just to get into the door, then every step with the FED reporting you pay again and again (audit fee, accounting fee, counsel, etc) Then every year the States get a hold you.
It is economically impossible to be a small business to afford the small business regulatory fees.
Speaking of fees. Why don't the SEC just post the fee's on a daily basis instead of having to browse through the records and then guess what the fee is in the end. I have looked at over 200 sb-2 filings, and nearly all of them pay a different fee.
If we, as small business, go public, and have to abide by the SEC and FEDs reporting system, then we should be allowed to operate throughout the Federal Gov. reach. Technically, just because you get a effective Registration, does not mean you can offer a security.
Because heaven forbid if you bluesky in one state and someone buys from another, the hammer is going to come down upon you.
Under the current system, SB and Blue Sky, you can not be a small business to stay in compliance, which is why you are attempting to raise the limit threashold to do away with the transitioning small businesses.
Any of the proposed changes still will not truly help the small businesses. You can't just redefine what a small business is by making the definition higher valued businesses. The small end of the run is still be disenfranchised.
I have no problem forking over $50,000 to comply with the FEDs and SEC. Well, I do, but that is a different blog.
Our business, Hometown Digest Media Corp, of Tennessee, was created and primarily owned by disabled Tennesseans. The current stystem of FED and Blue Sky is limiting our business potential.
Thank you for at least hearing my views. I would like to testify before any committee to make my self heard.