How can a foreign company use RegA+

Speakers

Oscar Jofre

CEO and Co-Founder

KoreConX

Oscar Jofre

CEO and Co-Founder

Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.

Kendall Almerico

Securities Counsel

Almerico Law

Kendall Almerico

Securities Counsel

Kendall Almerico is best known as the securities lawyer and "quarterback" of the Reg A offerings for BrewDog (one of the most successful equity crowdfunding companies ever) and Goldenseed - the first private U.S. cannabis cultivator qualified by the SEC to sell stock to the general public. Kendall was named “one of the top crowdfunding and JOBS Act attorneys in the country” by Forbes. Venture Beat named Kendall as the top practicing attorney on their list of the most influential thought leaders on crowdfunding in the world. Inc. magazine named Kendall to its list of “Top 19 Crowdfunding Experts Startups Need to Know.” Onalytica ranked Kendall #1 on its 2016 list of the Top 100 crowdfunding influencers in the world. Huffington Post called Kendall “One of the country’s leading experts on equity crowdfunding.” Kendall and his crowdfunding websites have appeared in the New York Times, USA Today, Washington Post, Washington Times, Forbes, Bloomberg,Reuters, the New York Daily News, Business Insider, Christian Science Monitor, Fox Business Network, Yahoo News and hundreds of newspaper, blog, radio and television interviews including CNN, CNBC, CBS, ABC, NBC, FOX, CCTV and Bloomberg TV. Kendall was a regular crowdfunding columnist for Entrepreneur.com and is a highly sought after international keynote speaker. Mr. Almerico practices law with the law firms of Almerico Law in Washington DC.

Sean Levine

Managing Director

Entoro Capital

Sean Levine

Managing Director

"Investment banker, attorney, securities analyst, entrepreneur and consultant with a focus on private placements, energy markets, fundamental and technical equity and commodity analysis, trading system development and policy intelligence. Led a team focused on design, development and optimization of unconventional/innovative trading systems. Also wrote and published newsletters and reports on the oil and gas industry, economic and geopolitical dynamics. Hold Series 7, 63, 86 (Research Analyst), and 87 securities licenses. I analyze problems from a variety of perspectives. Strong planning, analytical, collaboration, negotiation, and mediation skills. Affiliated with Entoro Capital and its Broker-Dealer. Specialties: Private Placements, Structured Finance, Data Analytics and Modeling, Writing, Oil/Gas Price Modeling, Financial Publishing, M&A, Research and Analysis

Oscar Jofre  00:28

All right, then. Well good afternoon, everyone. Welcome once again to the KoreConX KoreSummit webinar series 2021. My name is Oscar Jofre. And we are six days away. That’s right. I’m counting it with my fingers, all six of them, of course, for the big day, but today we are going to have a great discussion, have the great panelists you’ve seen before in different topics, but I’m going to give them an opportunity to reintroduce themselves. Sean, please,

Sean Levine  00:57

Hi, thanks, Oscar and good to be with you Kendall. I’m Sean Levine on the head of Reg A and CF. Practice at Entoro capital and Entoro securities, we’re a broker dealer out of Houston, licensed in all 50 states, the District, Puerto Rico and dealing with a lot of reg A’s right now, some of them internationally based or at least originally. Predecessor entities internationally based and a lot of domestic issuers as well. So this is a timely topic. It’s an interesting topic. It’s something we run into pretty frequently.

Oscar Jofre  01:38

Perfect. And of course, Kendall, I mean, the man of the hour, please,

Kendall Almerico  01:44

I’m overwhelmed with love, Oscar, thanks. I’m Kendall Almerico, and it’s a pleasure to be here with you Oscar and also with Sean. Nice to have some people here that we can talk about this topic from people who’ve actually done it. There’s a lot of misinformation about this out there. And it’ll be nice to get Sean’s perspective from the broker dealer and mine as a securities lawyer and also someone who, outside of my practice, as a lawyer, I help run these offerings, market them, get them to the finish line, help you raise the capital through all of the means that you have to do to drive people to your investment page. So we’ll talk a little bit about some of those things also. And I’m just very excited to be here and ready to teach the world about today’s topic.

Oscar Jofre  02:29

And you know, that’s a great way to put it, we are here to teach the world because I mean, at the end of the day, there is no other country in the world that has this amazing exemption. And just before we got started, I was telling you, there’s a whole momentum outside of the US right now where webinars are happening literally daily, about how to come in and use regulation CF and reg A. Which by the way, everyone, six days from today, you can raise up to $75 million, so you can get the idea why. But today, we’re going to demystify the misinformation and hopefully, you’re going to hear from those who do it day in and day out. That’s the important thing. There’s the right way to do things and the wrong way to do things. And the wrong way, you know, the SEC has a beautiful outfit that they provide. I think it’s orange still in color, you know, once you go orange, you never go back. So it’s so I don’t want to make fun of it. But it is true. I mean that the right way and a wrong way. And sometimes that can derail people. So let’s start from the legal element first, obviously. Let’s talk about regulation, $75 million, who can use it? And why is the rest of the world talking about it? And we’ll start with you Kendall.

Kendall Almerico  03:51

Well, Regulation A, you know, is not a new law. It’s a law that’s been around for years and years and years and years. Unfortunately, I actually met someone about a week ago who used the old regulation, a law and was very funny to have a conversation about that. But in 2012, when the JOBS Act passed, they changed the law, they turned it into what most people now call Regulation A plus or reg a they’re all the same thing. Don’t let somebody tell you there’s a difference between Regulation A, Regulation A plus, reg A, or reg A plus, they’re all the same thing. It’s just an updated version of an old law that fix the law so that people can use it. So you can raise, right now, up to $50 million. When the law changes up to $75 million, you can sell to anyone in the public anywhere in the world, you do not have to just sell to accredited investors. So the whole world is your oyster as investors. However, there are you know, 600 something pages of SEC rules to follow. One of those rules is that the Regulation A is only available to United States companies or Canadian companies. So what happens if you are a UK company or if you are an Australian company or a German company, you want to use Regulation A? Well, that’s what today’s seminar is about. Technically, you can’t do it. But reality is there are ways to do it as long as you follow the rules and do the things that the SEC wants to see and keep everything aboveboard.

Oscar Jofre  05:19

Okay, so that’s a great overview of the exemption of from the side of making sure people understand who is legally already, and we’re going to jump into the how to do it. We’re going to do kind of the How to as much as we can, but I want to hear from you, Sean, you know, from the broker dealer side. I don’t think it changes things, right, because you could always deal with foreign issuers. For you, that’s not the issue, it’s just making sure that the exemption they’re using is going to be correct, sorry.

Sean Levine  05:53

Yeah, it’s just if you want, we could always, you know, bring in funds through reg D combined with reg s, never a problem. But the the idea of reaching the crowd and reaching retail investors in the US is a compelling one for a lot of issuers abroad. And so it’s when you want to push your raise through this lens, you want to thread this needle, then there are certain considerations and certain ways you have to go about doing that. And you can’t, you know, as Kendall said, You can’t just just do it with with the entity that you’ve been using, in Switzerland or wherever you are, you need to kind of make it fit. And I guess maybe this will help probably queue things up better for Kendall to kind of answer the questions. But the kinds of things you know, we we get approached by I’d say we’ve got a pretty robust deal flow right now, as we’ve been discussing Oscar, I’m sure everybody does in this space. But you know, probably it’s a pretty good mix. And we were getting probably close to half of at least the initial conversations I have are with with entities that are abroad. And I have my mental checklist, I start working down, do you do you have a US based entity that you plan to use conductor raise? Did you set up your corporate headquarters here? If not, is there a US entity that’s going to be doing business in the United States you want to break into this market? If your your headquarters is here, how much of your team is here? You know, it feels like it’s not a bright. The intention of the the rules originally was to sort of help spur growth of companies in the United States or Canada through this channel. And allowing retail investors participate in that, grow wealth in America or Canada theoretically. Okay to draw from abroad. But there ought to be a strong enough Nexus here, because that seems to be the spirit of the reg and the rules. And so and I’m an attorney, as well, as we’ve also discussed, I only play one on TV, in the brokerage business, but I’m not practicing as an attorney, but I still kind of use that lens when I’m vetting these issuers initially. In my view and my understanding is it’s not a bright line. Yes, no, it’s kind of a totality of circumstances. But hopefully, you know, and Kendall, you can probably shed a lot of light on this on to some of the things that you can do to kind of position yourself correctly and in a compliant fashion.

Oscar Jofre  08:41

Yeah, actually. Sorry, come to I was just going to get to you there. I’d like to know what those first questions are. So those people listening could ask themselves up before they go off just hooking up in Delaware. But there’s more than that. Before that, please.

Kendall Almerico  08:57

Yeah, I mean, yeah, Sean, hit the nail on the head. This is not, I wish there was a book that I got to take off the shelf or a website, I could go to where the SEC says, you know, if you have four employees and one of those as your registered agent, and you have you know, there’s nothing like that, where you can just do a little checklist to determine if you’re eligible, other than you have to have a entity in the US or in Canada, that is a entity that’s registered in one of those countries, or you can’t use this you cannot come in here and say, I am a Nigerian prince and I have my Nigerian company, I’m going to go raise money in America through my Nigerian company, it can’t be done. You have to have a US company entity, LLC, Corporation. That’s a necessity. That’s the one bright line test we have. So then the question becomes, is it a legitimate company, and most importantly, what the SEC looks at, the number one thing they’re going to look at is, does that company have its principal place of business in the United States, and when I say that company, I mean the US company. So let’s just take this as a very simple example, let’s use a company that’s formed in Romania. And they’re selling whatever they sell in Romania. And they’ve decided they want to branch to the US market and take on the US market to sell their Romanian widgets here. Can that Romanian company use regulation A? No. Can they form a US subsidiary or a US holding company or some other company that’s related to the Romanian company, to them sell their Romanian widgets in the United States? Yes. Step number one form the company. That’s the easy part. Now, what happens then? Can you just form the company and continue to run your company from Transylvania and do all the things that you are creating overseas and not really have a company in the United States? The answer is no. The SEC, and Sean will tell you, I mean, from the broker dealers perspective, when they do their due diligence, part of this is going to be to determine if you really do have a US entity here. So do you know, is there a checklist? No, but things that you look for in the totality of the circumstances are things like, do you have an office here? Is that a real office? Or is it just a place or WeWork that, you know, nobody’s ever at? Do you have any officers or directors here any other phone here? Do you have people that are operating business from here, the more things you can say that are being done for that operation here in the United States, the closer you’re going to be able to say to the SEC, my principal place of business for this US entity, or this Canadian entity is here in the United States or in Canada, if you can’t say that, you’re not going to be able to use Regulation A. I can tell you right now, if you just set up this company here, and there’s nobody here and there’s no office, and there’s no real Nexus to the United States, it’s not going to work, you’re going to get shut down by either the broker dealer and their due diligence, I as an attorney, when my firm does our due diligence, we’re not going to take you on but because we know the SEC is not going to allow it to happen. Those are the first questions and then I’ll let Sean jump in. Because I have some other things that, you know, are important when you start talking about I love the legal term, that totality of the circumstances. But when you’re looking at all of the things combined, you know, do you have a really, really strong argument that this is an actual operating US company? Shawn probably has some ideas there. And I’ll throw some out to after him.

Oscar Jofre  12:21

Just before you get started there, so I’m taking notes this time because he’s bringing up really good points. I mean, look,

Sean Levine  12:31

I was too.

Kendall Almerico  12:34

He’s just talking about me, apparently. I was giving Sean the opportunity to make good points, but Oscar interrupted with his note taking.

Sean Levine  12:44

The only reason I’m really on this call is to get free legal advice from Ken.

Kendall Almerico  12:49

Yeah, you’re getting a bill, Sean, and you know, that’s coming.

Oscar Jofre  12:53

And the interesting thing is that it’s true. I mean, everybody today, “I incorporated in Delaware”. And I know the phone is the other one, because I wanted people that don’t all that’s easy, that’s easy. There’s some things you got to be really careful with, because there was one company that got caught doing that on a Reg A from India, where they faked everything  they rented an office, they were able to get a US VoIP number. But VoIP, think about it, they’re going to trace the IP address. I mean, the logic there, I just want to demystify certain, but I like the checklist, those seven items you gave out, that was really good, you know, because people can be pre screened. And I’m sorry, Sean, I always believe I like checklists. You know, why? Because it at least we get the right clients. We’re not trying to say no to him, but we’re trying to say, this is what you need to be thinking about before you just say I want the $75 million, right? I think that otherwise we’re wasting our time. Sean.

Sean Levine  13:54

I don’t, I don’t want to say game it but there there are ways to kind of because that’s what everybody folks are going to be out to do anyway. But to really do it with with feeling like okay, so you can you can set up the office and you can do do the things you know that Kendall spoke of, but also Alright, well, if you if you have a company that provides a service or a product or something, and everybody’s not like but you know, if you have a technology company, but you don’t operate in the EU, you don’t have US customers, if you can make the argument that you are now making an effort to penetrate the US market, that can be compelling. And I think that probably speaks a lot and even if you don’t necessarily know how it’s all gonna play out, before you start calling us and everything think about a business plan and a plan of attack for how you’re going to get into the US market. And if you can include that kind of content into your filing ultimately, then then that’s going to make for a much stronger case, I think and and it probably will put the regulator’s more at ease than just how well we set up the LLC in Delaware. And, you know, we have one of our one of our guys is here now, and he barely speaks English, but he’s here. And he’s got a cell phone. And yeah,

Oscar Jofre  15:17

I know they’re obviously getting the lawyers to do more their piece, the auditors are definitely looking in deeper, right? I mean, everybody’s on the hook here, and all these regulated services. So I like the fact what you said is creating a plan. I mean, anybody coming in,

Sean Levine  15:36

It can be aspirational. Everybody understands you haven’t done it yet? Yeah, it’s okay. But at least you’re putting your best foot forward, and you’re showing, at least on its face, that you’re trying to comply, because that’s what it’s all about is, you know, be convincing, you know, don’t just set it up, but make an effort to show what you want to do and how you want to do it here. And not just set up a shell, a us shell co. Go ahead. And I but I have one other thought that ties into some of this.

Oscar Jofre  16:08

Okay, what do you want to continue about? 

Sean Levine  16:09

Yeah, sure. Sure. It’s, it’s a little bit of a divergence, but it’s somewhat related to some of the things. This is more of a question and maybe leading up a little bit to next stage of the conversation, but a little bit of a difficulty for some folks might be, what if you’re, what if you’re a natural resources company, an extraction company? Well, the operations are in Guinea, or, you know, the Congo or something? I mean, we see these entities and they do these kinds of raises, but that so maybe, you know, if you can speak to that, you know, if if that what helps qualify in that situation? If you’re, what if you’re a US or Canadian company, and you plan to bring the if the management really is here, and you plan to bring the profits home? Or use the the extracted resource domestically or something? I mean, what about that case? Because there’s a little bit of a special case, because you can’t do that business here, you know?

Kendall Almerico  17:03

Yeah, no, and that is exactly the point I was getting to. So thanks for getting to it. So I can also expound on you can, you can

Oscar Jofre  17:13

Did you guys meet beforehand?

Kendall Almerico  17:15

I’ve never met him before in my life. I have no idea. No, I’m just kidding, Sean and I know each other, but no, the reality is Oscar, and this is the mindset you have to have when you go in front of the SEC, because, as I’ve said all along, when I first started working with the SEC years ago, I was surprised at how easy they were to work with and how great they are to work with. And I’m not saying that to be pandering, it’s the truth is they are actually very nice people who are trying to do one thing, and one thing alone, and that is protect investors. They’re not trying to protect your company, they’re not trying to protect your lawyers, they don’t care about your natural resource. They don’t care about your auditor, they care about investors. And so you always have to think in the minds of a regulator as am I doing something that’s going to help investors, defraud investors, mislead investors? And so if you’d look through that lens at this question, alright, let’s look through that lens because this gets to Sean’s point, you’re a foreign company, you’re opening up a US subsidiary, do something, how is that helping a US investor? Okay, when people in the US invest in the company, this new entity, is there a benefit to them? Is your business going to do something to help the investor. So let’s take Sean’s example of a natural resource and Congo. If that natural resource, obviously, you can’t, you know, pick it up, get it out of the ground, stick it on the ground in Missouri and dig it up again, it’s going to come from Congo. However, that natural resource may be something that’s sold in the United States. And it’s used in the United States, and you haven’t attacked the US market yet. So now, your reg a offering is going to be this us entity is going to go out to expand into the United States. It works with almost any widget, any product, think about it, you know, you got a company that’s a beauty product company over in China, they decided they want to come over and have a US market for their product. They’ve never been in the US market. They open up a US subsidiary who invests in that us subsidiary? American investors invest in it, how do they make a profit? That’s what you have to think through? If there’s a way for those American investors to profit from this, then you’re another step closer to having the legitimacy of getting through the SEC. But it’s always thinking about those investors, are they getting something because I can’t tell you how many times I’ve been approached by companies and I’m sure we all have where they say, we just want to get us investors and we’re not going to change anything we do. We don’t care who buys our product, we don’t care what we do. We’re going to keep our stuff over wherever it’s at. We just want to attack those investors and get them to invest in our company, but we’re not going to change anything. That will never work. Now, the other half you say we’re going to expand our product in the United States and again, as Sean says, even if it’s aspirational, and it’s legit and you’ve opened up an office here and you have people working here and you’ve got sales people going out trying to sell the product or what have you, then people are investing in something where they actually could get a return. And it’s on something tied into the US. That’s another one of those totality of the circumstances, things, you may not add it in every case. But if you have it, it’s going to look a hell of a lot better to the regulator’s because now, A, you’re doing something to help the US or Canadian economy, and B, you’re doing something that is a potential return on investment for a US Canadian investor.

Sean Levine  20:32

And if you don’t have it, yet, it can’t hurt to at least show that you want to have it in this is how you want to do that.

Kendall Almerico  20:39

Absolutely. You’re required to give your business plan. I mean, it’s not a formal business plan, like they teach you at Harvard Business School, you know, this 800 page thing, whatever. It’s not that but you’re required to get a business plan of sorts, a description of your business to the SEC in every Regulation A offering this is you know, you have to describe what you’re going to do, you have to describe the use of proceeds, what you’re going to do with the money. There’s a lot of disclosures that go into this. And if you haven’t thought that through before you decide, hey, I’m just going to open up a company in Delaware, you’re not doing your homework, because you have to be able to explain to these regulators how this is a good thing for investors and how they’re going to get a return. Even if it’s aspirational.

Oscar Jofre  21:22

Okay, so that’s usually what you’re doing with companies right now Kendall, the ones outside of US and Canada, I know, you’ve done it for a few clients we worked on together, you’re spending that time to go through those layers, before any paper ink is written, right. I mean, they got to get that through their head,

Kendall Almerico  21:42

The simplest, you know, the using the example Oscar, that is the easiest example to do. You know, obviously, one of my clients is brewdog, who is you know, the largest craft brewery in the world. They started as a Scottish brewery, they were in Ellen and Scotland. They are a UK based brewery, they had distribution all over Europe, all over the UK, they had bars in 40 or 50 cities, but they couldn’t raise money in the United States. And they didn’t have any beer in the United States. They wanted to come to the United States, continue their success here, hired me back in 2015, when Regulation A went into effect. And we did the one of the first Regulation A offerings for brewdog. here in the United States. We’ve done three of them since altogether, but the reality is they came here to open a brewery, they built a $30 million brewery in Columbus, Ohio, they’re now distributed in I think 16 or 17 states are in the United States. They have five bars and restaurants here in the United States. They own a hotel in the United States. And all the money that was raised here through Regulation A was to help those things happen in the United States. It’s exactly what I said, foreign company kicking butt, you know, now a $1,700,000,000 company kicking butt worldwide, but they’re like, we have to do something for the United States with this regulation a offering and it was the perfect fit, because they wanted to expand into the US. Regulators had zero problem with it, because it was totally legit. Totally aboveboard. And absolutely what reg a is all about.

Oscar Jofre  23:17

Yeah, it allowed them to expand into a region with the capital from the citizens of that country, I think, I think this is a an interesting model. Because anytime you see companies expanding, it’s coming out of their own internal coffers, or in that region. Here, yhey let the crowd jump in. And as you said three times this company has done it successfully. And so it is rather interesting. I find it ironic that the darling of reg a is a foreign issuer. I mean, seriously, it is the darling. I mean, the nobody has used the regulation as much as they have today. I mean, now more will come but it does go to show that a legitimate company can do it. And they’re not the only ones. There’s others. So after we get through that screening process, obviously, I mean, they confuse the good signal here, what I’m hearing from you, Sean, as well as if there is a foreign issuer or you are going to push it on to the legal side. So you because it’s a FINRA broker dealer, you carry the risk if you start carrying too much advice on that structure, correct?

Sean Levine  24:27

Right, and that I mean, so we, as a broker dealer or an investment bank, we do advise regarding structuring of the security and things like that, but ultimately, but at the end of the day, this particular piece of the puzzle is a legal question because, and there are frequent occasions where I’ve referred the issuers go talk to your counsel about this, figure it out, to get your counsel to back up your view because it’s a right it’s a regulation that you need to comply with. And the lawyers need to be able to help make that argument. Because it’s the SEC, that’s the regulator that’s going to come back on it. And it’s a, it’s a legal test, essentially, because it’s a regulatory test, a legal test. I’m in a weird position, because of the legal vacuum training, I, again, enough to be dangerous, but also enough to know when I need to say, so if it’s clear, cut enough to me, I’ll say, I think this is pretty good. And you’ll nail it down with your counsel later, or, you know, if you haven’t already done that, but there are times when I know, it’s gray area enought. I can’t tell you, and I’m expecting the council to say, yeah, this doesn’t work. And here’s some things you can do. I’m happy to brainstorm with everybody.

Kendall Almerico  25:41

Let me, let me give you the flip side of that, because I completely agree. While this is a legal issue, I always also tell my clients, you know, one of the things that’s not the topic of this webinar, but I think Sean won’t mind me saying this, you know, you have to have a broker dealer to do this, right. And I will not do a Regulation A offering without a broker dealer, you know, behind the scenes doing their job to make sure that everything is compliant. I won’t do them. It’s not that you can’t do it, it’s just, there’s not a smart idea in my book. But bottom line is, every broker dealer is different. They have different processes they do, some of them do more due diligence than others. But I tell every client, you know, there’s a very, very, very strong chance that the broker dealer in their due diligence process is going to do what’s called a site visit, they’re going to come and knock on your office door, they’re going to see if there’s an office there. So before we ever get to the SEC, the broker dealer is going to make sure that, you know, they may send an investigator or someone just to go out there take pictures, hey, there’s a sign on the door. Let’s see what’s behind the door. Hey, there’s somebody actually working here. Oh, look, there’s a whole office of people, you know, as opposed to knock knock, WeWork? Can I help you? You know, no, we’ve never heard of XYZ Corporation, we have no idea who this person is, oh, yeah, they’re on our list of a roster. But you know, no one’s ever here. Well, that’s not a principal place of business, and you’re going to get shut down, before you ever get to the SEC, if that happens. So the reality is, there are several layers of scrutiny that you’re going to have to go through. And don’t try to BS your way through this, do it the right way. If you legitimately want to use US law to raise a lot of capital from 330 million people, do it the right way, spend the money, build the thing out, right, and don’t try to you know, you’re not going to get away with it. And if you do get away with it, you’re gonna get caught later. So it’s not like, hey, the SEC qualified me, we’re all fine and good. You know, all it takes is somebody six months later to complain, where’s this office that’s on these documents? I went over there and there was nobody there, well, then you’re in worse trouble. Because now you’ve defrauded the SEC. So you just can’t do those things, good counsel, good broker dealers, all of us that are on this call, we all want to do things the right way, just do it the right way.

Sean Levine  27:59

And tell you something else that does play into this kind of tangentially. You know, we one thing that we do in our due diligence processes is just we have a we have some third party providers that we use, but background check firms. And for whatever it’s worth, you know, if you’re if you’re a domestic, if all your executives and key stakeholders are our local domestic folks, the cost of those background checks is going to be significantly less than if you’re a very cosmopolitan team might be helpful in terms of determining You know, when you’re thinking earlier on, if you got to form this subsidiary entity anyway, not so you’re not doing it for real, you still do it for real. But as you’re choosing your management team for that entity, you have some local options, to the degree that your earlier stage, if you are and cost might be a factor, you know, they can get it’s a few $100 for domestic regular check, without a lot of you know, problems and hiccups. But when you get internationally can jump up to a couple grand per person. So you got to, you know, we like to look at at least like the top three key execs. And then if you have folks with 10%, or larger equity positions who aren’t management, but they’re large equity holders, add all that up, you can get you get the five figures pretty quickly. It’s not it’s not a lot, but it’s not nothing. So it’s just other things to think about in that same in that same vein.

Kendall Almerico  29:24

But let me let me couple that with one more thing that that little war story here without naming names or giving the company’s name away. But I was involved with a company several years ago when this will all starting, who was a foreign company who was doing exactly the same thing setting up the business, here setting up the US subsidiary, and it got to the stage where the actual the SEC actually required because they tried to do what we’re talking about here, you know, kind of, you know, bring over one of their executives let him live in the United States. And, you know, he was actually moving here but you know, he was really the only one as opposed to hiring someone local, I had to actually get a lease to show that he had signed a residential lease to prove that he actually moved here, not just the office lease, not just the proof that he was here, I had to show his visa, we had a lot of steps we had to jump through this was in the very early days. But it really taught a lesson to me, particularly that, you know, I kept saying, don’t do this, don’t do this, and we did it, you know, sure, as heck the SEC was like you until this guy, I can see he’s actually living here, we’re not going to believe it. So it was really interesting. And again, I tell that story, just because, you know, I would never touch something like that. Now, that was in the very early days, when nobody really knew what the rules were, the rules don’t say, for example, you have to have a principal place of business in the United States. However, that is a rule. Now. They’re not in the SEC rules. But if you don’t have that, they’ll shoot you down. These are things we learned in the early days, and we’re all trying to work around how to make these things happen.

Oscar Jofre  30:55

Well I can throw a little interesting component with it. Now with COVID-19, you really are going to need to make every effort to hire Americans because that the likelihood that you can go back and forth. Now it’s going to make it even more difficult, right with having the COVID-19 passport, or the vaccination passports.

Kendall Almerico  31:17

Let me jump on that. That brings up a great point, too, because I’ve been thinking about this a lot lately. You know, people don’t go to the office anymore, you know, and so we’re in a different world, right? People don’t have offices, and let’s say you’re a new company. And again, I’ve represented companies that have done reg A that were very, very young companies with only, in some cases, three or four people involved in the company, sometimes these are startups that actually decide to do this. And so if you only have two people in your company, you know, the number of people you’re gonna have to have in the United States is a lot less than if you have 43 employees in one place, and one over here in the US. But think about it. Now, it’ll be really interesting to see what happens when companies that are running themselves virtually from homes, and now you have that site visit where somebody knocks on the door, and it’s somebody whose home, are they going to tell you we’ll you don’t have an office? And now you don’t have a principal place of business? Heck, no, that’s the new normal. So I’m really interested to see how that develops, I actually have a couple of clients that are in that exact situation. So I’m, I’m curious to see how it develops. Because, you know, we all run our businesses from home now. And even post COVID world, I think there’s going to be a heck of a lot of people that continue to do it.

Sean Levine  32:28

And that by the same token, that almost creates an opportunity here, because, you know, it would have been a lot more onerous to do that, to set things up, you know, the right way, what we considered the right way, a couple of years ago, in 2019, compared to now, in addition to the sort of the main office and that sort of aspect of it. If you’re trying to if you’ve got a workforce, and you’re trying to prove that argument and make it better, it’s people working remotely all over the place, just go if you’re gonna hire remote workers anyway, go hire him here. Yeah, build out your case.

Oscar Jofre  33:09

It’s funny, you both mentioned that, we went recently through our SEC audit. And that’s exactly our scenario. Most of us are housed all over the US and in Canada. And obviously, our location we had in New York, it was a location that we disclosed, and we never shy or anything like that. But it was rather interesting, we kind of expected that, then the SEC calls it the new norm, but it rather for us. I’ll tell you where it has changed. So for even though we’re a Canadian company going to US, we’re still treated as a foreign entity. It, it does make you look for people in different places where you would never look that before. You know, somebody says I live half an hour or 45 minutes away from Pittsburgh. You go Okay, you’re not in the big city. So what if, you know, do you have high bandwidth at home? Yes, good. Do you have zoom? Good. It’s rather interesting. So I think it’s important for everybody to recognize that if they do start a team, like brewdog is perfect example. Columbus, Ohio, right. It’s not a major city and get that’s the city they selected as the starting point. And they’re growing a team out of that. And everybody can do it as well. It doesn’t have to be in the big cities where you think that it’s going to be difficult to find people and the costs associated with it as well, because that obviously that’s out any entrepreneurs’ miners. I wasn’t planning on bringing that whole came on board. And as you alluded to there, Sean, is that even though it’s aspirational plan, you still got to lay out some dollars in putting this together, right to recruit some members to join the team. So, so let’s see, I’m now sorry, you were gonna say,

Kendall Almerico  35:13

It’s really funny, because these are real conversations I’ve had with clients over the years. And I think both of y’all appreciate this, you know, everyone wants to have the perception that, you know, we’re going out to raise money from the public, we want the perception that we’re really a great company. And, you know, we went to New York City address or an LA address, or, you know, Silicon Valley address, depending on what they’re doing. But the reality is, that doesn’t matter anymore. And a lot of cases, if you’re a financial business, and you’re, you know, you say that you’re based in Dubuque, Iowa, that’s not going to be you know, but the reality is, it doesn’t really matter in today’s world as much. And so it’s very funny to me that I used to spend a lot of time with people talking about the taking my lawyer hat off and putting on the marketing hat, the perception of your company based on where you’re based, it’s very important, you know, it can be an incredibly important thing. Today, it doesn’t matter as much, you know, everyone’s remote. And so, again, fascinating stuff in this new world that we’re dealing with. And it will be very fun to see how the SEC treats a lot of these things.

Oscar Jofre  36:15

I just think it is easier. And so anybody coming in, I don’t think it’s going to be as difficult because to your point. You don’t need to be in New York, Chicago, or Houston, you can be and there’s really good people there. Because I don’t know if you’re noticing in big cities, a lot of people after COVID are leaving to smaller towns.

Sean Levine  36:33

Yeah, you got a kind of a fusion of weird urban diaspora. Everybody going out? Yeah.

Oscar Jofre  36:38

Yeah. So the talent is with children. Like my family, I’m going to a community of less than 200,000 people. I’m going from major city. Why because I have a young family in, in the only thing I cared about to be honest with you, the city, I needed to know that it had a fiber optic line. That was it, you know, at that point? it you know, in the world, is at your footsteps. So I in the reason I’m bringing this to this audience is I want you to realize that it’s not as difficult and daunting as we’re not trying to do that we’re trying to tell you is that do it? Right? I think that’s what Sean and Kendall, we keep driving that message over and over as you make this plan, it’s not as difficult to be with them, but you still need to do it. So once we go through that Kendall, I mean, you’re the only one here so far, I know, maybe you and Sean may be working on another as well. Putting the legal structure together, they have a plan. How are you making the decision? You’re You’re guiding them on the domicile? Because I know you bring that up quite often the which state too, because us as a few of them. And then of course, there’s the whole notion of LLC VS Co. So there’s other intricacies involved in the, in the legal formation of the entity that you’re going to pursue, correct?

Kendall Almerico  38:01

Yeah, and the number one thing this is, it’s funny, everyone’s like, well, you’re the lawyer, you tell me and I go, I’m not a tax lawyer, and I’m not a CPA. So the first thing we do is we bring in your tax advisers and your CPAs. And we have the conversation together, I’m never going to tell someone to structure your company as a corporation, and put it into Delaware. I’m going to say let’s talk to your tax people and see if this is right for you. Because Delaware may not be the right place for your company. And an LLC may be the exact thing you need for your company for tax purposes, because you don’t have enough employees, or whatever the case may be. And you would be shocked at how many people just go, Well, I’m going to be a Delaware Corporation. And then I said, Let me get something from your tax attorney well, or you know, your CPA, and I end up on the phone with them. And they’re like, Who the hell told you we’re gonna do a corporation, that’s gonna cost them like, you know, $100 million in taxes over the next three years. I’m like, that’s why we’re on the phone. So again, that conversation is typically had with the team that you know, is going to be doing your taxes and your accounting, along with whoever, in many cases, I’m brought in just to do the securities work. And this decision is I’m on the phone with their corporate attorney, their in House Counsel, their general counsel, and I’m the one going Hey, let me tell you what it means from a security standpoint, but you guys structure it the way you want it doesn’t matter to the SEC if you’re an LLC or a corporation, you can’t be a sole proprietorship, but it doesn’t matter to them how you’re structured.

Oscar Jofre  39:29

Yeah, so it for them, it’s purely meeting. I don’t want to say check the box but the meeting make sure you follow the form one properly, with all the pieces every line on the professional base. There is one professional here we’ve left out of it, and we shouldn’t discount it because they’re, you know, we don’t bring them out a lot. I mean, to speak with RegA goes who wants to talk to an auditor? What do they have to say, but the auditor is the other party that needs to do their due diligence under the CPA rules, right? So you’ve got all these parties coming in doing that looks in providing a report that the SEC will review as part of the form one filing. So it’s not just what you’re providing together, Kendall, it’s a combination of everyone else coming in. And then of course, from the broker dealer side, so, so, Sean, I mean, now that obviously, sometimes you’ll be lucky, you’ll be right at the beginning with an issuer right before it begins, Before they start talking to someone like Kendall to get all this started. But let’s say you’re getting it on the tail end. And it happens, it happens to all of us, right? People think that’s not important for us to know. But it is because the more you understand the structure, it helps you understand how you’re servicing your clients, how are you guys humbling that from a due diligence perspective? Is that going to change anything? Or basically?

Sean Levine  41:06

We’re talking about sort of, where where you’re domiciled, and how you how you position yourselves and think about that way, but plenty of other considerations, corporate structuring, structuring of the security, structuring of the relationship between the parent entity and the security, you’re going to issue all the these sorts of factors. And yeah, you know, when we come in late, if if we see things that we think are troubling, or it could be, it could be troubling from a compliance standpoint, in terms of, I just don’t think this is this will pass muster. Because we get we talked about this when we’re involved, you know, one of the reasons that that Kendall wants a BD involved in why you want to be involved Oscar is because somebody’s got to have their chin out there and getting ready to take it on in case something goes wrong, somebody, the buck has to stop somewhere. And then we’re where the buck stops in terms of, you know, if something gets messed up, unless we can explicitly pigeonhole it off into your particular subject matter area and the area, then it the generally speaking, it’s kind of us at least in terms of bringing the thing to the market. And so, if there are things that that are fixable, curable, then you know, if it’s borderline, we might try and steer them, if it’s not too late. And sometimes, if they’ve already, you know, what have they filed yet or not, if they followed the one a if they’ve been qualified yet or not, because we get brought in after the raise is already live, sometimes, because they don’t have to add issuers don’t have to have a BD to get a raise. So sometimes they figure out after the fact they should have and come get us and then we’re okay, so that. So the idea of bringing us in early and often is a good one in terms of you can save yourself a lot of trouble and money. Because you may have to loop Kendall back in, after you’ve already gone live say well, these are the changes that this broker dealers now you want us to get a BD, well, the BD is not willing to touch this thing and till we do A, B and C. And so now we have to go back and alter our filing. And maybe that’s just a supplemental filing. And you don’t have to go back to square one. But if it’s serious enough, theoretically, materiality is the question, right? And if it if it’s significant enough to be material, then are you going to change something and potentially have to go refile filing amendments and potentially look at we’re getting requalified over something that if we’d been brought in earlier on, you know, we might have been able to get you to be positioned appropriately out of the gate. Then we have going on all the time, we got things like that.

Oscar Jofre  43:54

You know, we do see that right now. And reg A regardless if it’s foreign issuer, right, I think we’re all the whole industry is recognizing that before it was just bringing the lawyer to by itself, but now we’re recognizing you got to have the escrow provider, the lawyer, the contract and the technology provider, everybody under the same roof, right from the get go. If not, everybody’s playing around, not knowing what that’s going on. Right? 

Sean Levine  44:19

Everybody’s adding the value toward toward the issuer in their own way, but everybody has their their lens on the thing that they focus on and add the value and, you know, even having good representation and counsel is really critical when we’re involved because it makes our lives easier. But Kendall’s main focus is, one, i mean he’s gonna he’s gonna catch anything that’s just blatantly fraudulent stop you from getting the marketing that way but but beyond that, you know your terms of your raise your structure if you’re raised in a compliant fashion that’s going to meet sec money. And help you get to that point to where you can sell your shares. Our lens is a little bit more  is this a deal that’s appropriate for the market? Not as not necessarily what is illegal? You know, can we get it across the line? But is it something anybody should be investing in and helping suss that out? And and that’s, you know, that’s not a great conversation for an issuer who’s got kind of, you know, Jim likes to use the phrase, you know, nobody wants to hear you that they have an ugly baby. But sometimes there’s an ugly baby, and there’s nothing you can do about it. But if that’s the case, well, maybe, maybe you should hear that. It may be reg a isn’t right for you, in a few instances, I know that’s not the message that we want. But occasionally there will be, do you want to spend $150,000 to get this thing pushed through and turns out, nobody wants it, because it wasn’t a fit for that doesn’t mean it’s a bad deal, maybe it’s a better fit for reg D. And it’s something that you know, some big check writer out there gets it, gets your message, what you’re trying to do, but it’s either not a great fit for the retail investor for any number of reasons. Or maybe it’s something that isn’t gonna resonate. And we can talk about, you know, Kendall, has a high quasi marketing function that he does. So do we, and every BD isn’t like that, but we are. And so we’re thinking, we’re not just thinking about how do we get it across the line? And should we get it across the line, but also saleability? Is there a point to doing this, you know, we don’t want to waste everybody’s money and have them go, it’s sure it’s nice to get paid, you know, any kind of upfront fees, and everything keeps the lights on, but we want to partner with folks who have it, we’re going to have a successful raise that’s going to resonate with the market, retail investors, and they’re going to they’re going to buy in, and helping them get to the channels to make that happen. So that’s another piece of it. And that’s another consideration. So all these are all, even if you don’t end up like liking what we have to say it’s valuable for you to have that conversation. And you’re getting free data. If you don’t hire us, you’re getting free information.

Kendall Almerico  47:09

Yeah, I’ve had people Sean and I’m sure you have to where you’ve had to have that ugly baby conversation with them. And sometimes it’s something I actually like very much, I think you’ve got a great product, you’ve got a great team, you’re just not gonna be able to raise money, not with reg A.

Sean Levine  47:25

Or there are things that can be fixed. It’s a painful conversation. But there had a conversation the other day with an issuer. And I love aspects of what they’re , but some of it is just like, I can’t work with this. So these are the thing, and I don’t think it will work. If we pay you. You may be live, you may be able to sell but I don’t think anyone’s buying unless you do A, B and C and we’re helping you. If you do the things, even if it’s a tough choice, and you do this, and you listen, then the chances of you’re achieving your dream rise significantly.

Kendall Almerico  47:57

Oscar, you’ve heard me say this over and over and over again, reg A takes a team, you know, if there’s one mantra that I have, it’s not, you need a good lawyer, you need a good broker dealer, you need a good auditor, you need a team of people doing this together. Sean has heard these words out of my mouth, you know, if depending on what we’re doing, I mean, if somebody comes to me with a consumer product, and I know how we’re going to go out and sell that, and I know we’re gonna have to spend a lot of money on advertising. And I know we’re gonna have to use influencers and social media and things like that, I know how that all works. But if this is something that’s gonna have to be pitched directly to family offices, for example, or, you know, more sophisticated or richer investors, sometimes that’s all up to the broker dealer to be able to say, you know, this is the way you want to structure this. So a lot of times that team needs to be brought together at the beginning, you don’t want to bring your broker dealer in later, you don’t want to bring in your, you know, tax people later, you want to bring it all together at the beginning. And that way, we can have these conversations like, hey, Shawn, we think this is going to require us to go out and raise money from, you know, family offices, for example, what do you think will sell to them? How do we structure this? What’s the marketing message, and again, those are things that you can’t do once you’re already through the SEC and then go, Well, we got to change everything, you should have that team together, at the very beginning, get the best people possible, make them work together. And as Sean said, Everyone has their own focus. That’s why I do that quarterback role that I do, which is where I will take on the position of, I’ll be the person who makes all those pieces work together outside of my legal role. I’ll be the one talking to everyone and making sure they’re all on the call together, that they’re all talking about the things that need to be done figuring out the problems together. But if you don’t have the team together at the beginning, you can’t do that.

Oscar Jofre  49:47

Yeah, I agree with that. And and we should also know that obviously, every BD works differently, right. So you know, what you guys are doing that in Toro is a bit different. Where other BDs are taking the role of, we’re going to work with firms that have investor acquisition, they’re comfortable enough, we’re not going to be the one selling and we’re, we’re playing agnostic. So I just want to make sure we’re clear to the audience because they’re seeing everything right, we need to be realistic that there are, you know, hundreds of offerings, whether they succeed or not, is not for us to decide the JOBS Act was very specific about this. Otherwise, the whole notion of why we need broker dealers and lawyers and everything else, obviously, the act was written in a way that you can do it all by yourself, if you want to.

Sean Levine  50:42

If you’re going to take that much more hands off approach as well, I mean, that affects fee structures, the value add you’re getting is different than what you’re getting from us, but you might pay less for it, which is fine, they’re still fulfilling a function. And, you know, the the other piece of it is, you know, you you may just blank, but I’ll come back, but there’s varying levels of service, varying price points. If you are going to take if you’re going to step back and take that reduce role, then you know, it, you can also disclaim the hell out of everything in your paperwork. And therefore, maybe you know, a deal that we might not pick up for certain reasons, if you don’t want to listen to us, well, but you still want a broker dealer, then maybe, you know, somebody else might not ask as much of you because they’re not putting themselves on the line as much in terms of getting the deal out there into the ether. So that’s, that’s something to think about

Oscar Jofre  51:46

Yeah, just look, the industry, we’re advocating for obviously, having broker dealers, it’s guaranteed that they better have a lawyer and an auditor and all that. But anybody coming in the there are different BDs that are acting, reg A’s now becoming the flavor of choice for broker dealers, which is great. And they’re going to come in different packages, right. So they’re going to either come with a built in kind of a Salesforce, some we’ve we finally got a broker dealer with a built in army of RIA’s, which we hadn’t seen before. And they’ve actually delivered, you know, they brought in a fairly significant chunk of capital. And so that’s the first, it was more. So ultimately, what is happening now is we have that available for any foreign issuer coming in. But the starting point, let’s put it where it belongs, it starts with a lawyer. You know, I’ve had companies so I want to speak to the investor acquisition, I want to see your invest button and say, You know what, seeing all that technology, it’s all great. But if you can’t get past the legal stage, you’re not going anywhere. Right. So I think that’s the, in this part, there’s not that many lawyers at the moment. There’s a lot of lawyers that do structuring, but you need to have that structure you need to understand reg A now there is the hook that makes it a bit different. There’s only a few lawyers that understand that, where others will say, you know what else having done that, once I set up and all that I look at it, but I’m not structured to do that. And it said, so this is really important. You guys said that before, just make sure you’re working with the right set of team and in today’s discussion. So obviously, we wait till the last bit, I waited this long, because the conversation was getting really good. I still had a few other questions. But I obviously want to give the audience an opportunity to if any of them want to have asked a question, just simply click the button, click the ask question. And we’ll have an opportunity here to ask Kendall and Shawn a question. If not, we’ll just be continuing our conversation as we have been. And so one thing that comes to mind while I’m going through this and looking at it, is that obviously, the company is making a really big decision. There’s no different than when we were going into Australia, UK, UAE, you know, you sit down with the professionals and they lay out the land. And where the one thing that I might fear sometimes, it’s just fear, is that how much of our views regarding whether they will be successful not gets in the way of them coming in. I’m just curious, I’d love to hear your I mean, Kendall, you’ve dealt with a few. I know you’re very particular about your clients who you want to deal with this are getting the way initially with your conversations as as people are listening to this.

Kendall Almerico  53:08

They even have the issue of them thinking they’re going to raise the money quickly or Sorry, I fell asleep for a minute. I had a bad night of sleep last night. I’m just kidding. What was the question again? Sorry. I was like, Sean when he forgot his. We’ve been on so long. Everybody gets one. Yeah, I was lying. I was reading. I was reading emails while Oscar was talking. I wasn’t paying 

Oscar Jofre  55:17

You know, the I’ve had a lot of UK clients lately, right. And they feel like, you know, I want to talk to somebody who will understand, and more importantly, drive me towards the goal that I want. Right? So where I’m trying to get at any understanding what you’re looking for, and will that get in the way of them trying to like you said before, Sean, you said, maybe a reggae is not good for them. It should be right deep, but they’re adamant and they want the reg A where, how far do you guys go on that?

Kendall Almerico  55:53

Happens all the time. So you get people who call me up and say, I want to do a reg A or I want to do a CF, or I want to do this, or I want to do that. And it’s all because they read a story. You know, I can’t tell how many people called me and said, Well, you did brewdog we should be able to go raise $120 million from the general public around the world. Well, you’re not everyone can do that, you know, they spent 10 years doing that. And, you know, they spent a lot of time and effort and had a business model that let them do that. So the reality is, I’m happy to do reg D offerings for people. My goal is to help people raise the capital, they need to grow their business or start their business or whatever scale their business. I don’t care how they raise it, as long as it’s done legally. So yes, people come to me all the time, they asked me to do one thing. And we end up doing something completely different. Because it’s not a good fit for reg A, or it’s not a good fit for CF or what have you. Doesn’t matter to me. But you have to be very careful about that. Because a lot of times people get very convinced. And I will tell you another thing, everyone assumes that you’re going, you know, I need to raise $10 million. As soon as this thing launches, I’m going to raise it in a week, it doesn’t work that way. It’s a lot of work, a lot of churning, there’s a lot of outreach, there’s a million things that have to go on to do these things, right. And so yeah, I’m a big fan of teaching people from the beginning to have realistic expectations. I don’t want anybody going in on the first day that they’re out there, and they only raised a million dollars, and they thought they were gonna raise 10. And they’re disappointed. They just raised a million dollars in a day, you know, and people are disappointed if they go in with the wrong attitude. So a lot of this is really just managing expectations, which the whole world is about, by the way, you know, don’t over promise and underperform, tell people the truth, let them know what to expect and then do a professional job so that things work out the right way. And everyone’s happy.

Sean Levine  57:49

Yeah, and into that. I mean, I try not to have a total preconception about, I’m not the arbiter of what the market is going to love and what they’re not. I know what kind of stories tend to resonate the best, but through the channels that I’m used to working through, but I don’t just, you know, kick something out of bed because I you know, there’s something that is not what I’m used to seeing. That said, you know, because of the BD positioning, there will be certain things where, you know, I might walk away from but it’s not usually just a function, my primary analysis is, is this a good deal?  Does this make sense? Do these guys know what they’re doing? Or seem to? Is there good potential for this to work? Or reasonable, but then I mean, these early stage companies, so a lot of things fail, but is there a reasonable case here for why this should work? And why an investor out there might work for somebody and make them some money someday? But also, you know, beyond that, then I start to take my secondary lens is, is this likely to sell and, you know, our process is kind of iterative. And we, you know, again, when we’re in talks with firms, we’ll try to add some value. We don’t always do this, but for some firms who are kind of on the fence, or maybe I’m on the fence about whether they ought to proceed. You know, we work with, with financial publishers as a distribution channel to try and get the word out for our clients. And so, you know, we’re, I don’t like to say testing the waters particularly a you know, in the reg A context, but we kind of float, we cast the the line out a little bit and see if we can get some nibbles from the publishers. And we’ll even do that before engagement sometimes, just as long as we have an NDA in place. Well, you know, we’ll go sniff around a little bit and maybe get them maybe get the issue or the prospect, some early conversations or even some feedback, if they just write back and they say, past, we don’t like that, you know, for whatever, and maybe they give me a reason. And maybe that reinforces or maybe it changes my view, maybe it reinforces my view, but it gives them a second or third data point on top of my take on things. If that, again, informs them enough to say, you know what, I’m not going to do this. Well, you know, what, we haven’t expanded that much effort at that. That’s okay. And we didn’t again, we, you know, to what, to Kendall’s point about setting expectations appropriately, we didn’t, we didn’t over promise, we didn’t under deliver, we didn’t just soak a bunch of money out of somebody for the sake of doing it, it helps us in our client selection process, again, past the point of the validity test, and sort of the comfort with the raise, but just we want to engage with folks who are going to be successful, and everybody’s not going to be, but we help them figure out what their chances are. And then they make a more informed decision based on that. And and we are more informed in terms of whether we, you know, want to take them on or not. And if somebody is bound and, determined to what you talked about, they’re definitely wanting to do a reg A. And that’s just how they, it their uncle died, they came into a bunch of money, they’ve had this dream their whole life, and they’re by God, they’re going to do it. Well, if we, as long as we still think it’s reasonable for somebody, Well, again, we can go into that we can pull fall back to that, that scenario, where we’re just doing BD of record and saying, look, you know, we don’t think we’re going to be able to sell this, that we’re anybody’s going to bite on this, you really want to do it, we can do your compliance stuff. And we will and that’s fine. And we just changed the structure around and say we’re just, you know, cautiously, we’re just BD of recording you and helping you do what you want to do. But, you know, Forewarned is forearmed. And we’ve we’ve kind of given them that additional value add of setting their expectations realistically, and it either works or it doesn’t. Sometimes we’re surprised.

Oscar Jofre  1:02:02

Yeah, being the entrepreneur here on this side of the table. I think the industry needs to be because everything that we are now seeing from the data for 2020. It’s not what everybody thinks, It’s not. And therefore I think some of the people did get it wrong. There are some things that shouldn’t have taken off that did. There, there is the type of investor that investing is not the one that everybody thinks it is. So you know, at KoreConX, we do have one great component, that were able to view this now. We’re able to view it after the fact, the real data on how it plays out, what people started doing at the beginning to the end. But ultimately, I think it’s a balance. I like the fact that at least we’re having these discussions where we didn’t have them before. People were just jumping in, you know, go Willy and nobody was paying attention. We’re actually are, I think that we need to be balanced about it. Because I there are many different industries, and the ones that we think it’s a winner, boom, right there. It’s the one that is not the one that lands on. Everyone right away. So great discussion. I mean, I got three pages of notes. And this is really good, because now that I’m dealing with people in different countries, because there’s a lot of interest within the UK, a lot of interest within Europe, Australia, UAE, India. Australian, India and UK have all had an issuer. There’s already a path to that. We’ve Kendall’s already done a few of those deals already. So it’s not like foreign. But what is interesting is that all these companies need to look at this plan. First, they need to look at that first starting point. Here’s the starting point. Before you do anything, do this. Okay, good. Kendall you’re on. Let’s get the motion going. Right. It’s a real simple way to move forward. Listen, both of you were great. I almost thought that you guys got teamed up before him. You guys had a whole ABC thing going there all together. It was a great, great conversation as always, and I hope it was informative to everyone. I want to thank everyone for coming in just reminding everyone we are six days away. From the major day where reg A goes to 75 million on the 15th of March. We are hosting the state of the JOBS Act 2021. With the father the JOBS Act, David Weild and Sara Hanks and our host, Vincent Molinari. We’re gonna have a week of conversation. We made it to reg A, reg CF, secondary market, you’re going to meet that funding portals, lots of exciting stuff happening by it all starts right here talking to the people. If you want reach out to Kendall or Sean, you can see their contact details at KoreSummit.io. Or you can reach out to us and we’ll give you the contact details so you can start having a conversation with him until our next KoreSummit. Kendall, Sean. It was good having you both. It was exciting. thank you as always gentlemen. We’ll talk soon. Cheers, guys.

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