Series 6

Question 1

When can a person offer sales from a Reg D?

a. After 6 months upon trade date?
b. After 6 months upon purchase date?

Answer 1

b. After 6 months upon PURCHASE date.

Question 2

What is found in Tier (Tear) 1 ?

Answer 2

Securities offering 20 million or less; with 6 mil to existing shareholders…..
–in a 12-month period.
Stipulation: must be the accredited investors only “club”
AND
ONLY the SEC reviews (no state)

Question 3

What is found in Tier (Tear) 2 ?

Answer 3

Securities offering 50 million or less; with 15 mil or less to existing shareholders.

Question 4

What type of literature is given for Reg A+ securities?

Answer 4

Offering Circular

Question 5

Who is not allowed in Tier 1 ?

Answer 5

Private Equity Funds
Venture Funds
Hedge Funds
---
They're all poopy pants and get in the "Tier 2" Elite club.

Question 6

How is Tier 1 reviewed?

Answer 6

By coordination – includes the state & SEC.

Question 7

How are Small Cap and Mid Cap Securities Registered?

Answer 7

With regulation A+.

Question 8

What does NII stand for?

Answer 8

Net investment Income

Question 9

How are NII distributed?

Answer 9

as cash or shareholder may reinvest immediately with no sales charge!

Question 10

How are cold calls/scripts filed?

Answer 10

As 3 yr customer communications with the BD; and approved by the principal before use.

Question 11

Short term cap gains are…

Answer 11

1 yr or less

Question 12

Long term cap gains are…

Answer 12

1 yr or more

Question 13

Unrealized gains are

Defered or taxed now?

Answer 13

Deferred

Question 14

Do options provide buyers with leverage?

Answer 14

Yes, it’s better than buying the underlying security.

Question 15

What does the writer want and hope?

Answer 15

The writer wants INCOME, and hopes the contract will expire before he is obligated (besheww!!! gun blasts) to sell it.

Question 16

Can you have a class suit in Arbitration?

Answer 16

No way Jose.

Question 17

Name some Financial information

Answer 17

credit card payments
cash at hand  (liquid investments)
life insurance cash in account
collectibles
securites

Question 18

Name some Non-Financial Info

Answer 18

Risk tolerance
Emotions about how I feel the market will do
Tax status
Age
Marriage status
Gender
Birthday
Children

Question 19

Capital Appreciation

Answer 19

Increase in the market shares

Question 20

TIF

Answer 20

Transfer Information Form

Question 21

What is a TIF?

Answer 21

A way of tracking $ and ownership of accounts.

Question 22

What is an unrealized gain?

Answer 22

When an investor holds a security that has increased in value, yet has not sold it. It is unrealized how much money you can get…or turn around to reinvest.

So…you don’t own the “extra” gain, until you actually have it.

Question 23

What is cost basis?

Answer 23

it’s your capital or money you put in.

Question 24

So if you bought ABC 90 shares at $100; and paid $100 commission, you paid $9,100. 6 months later you sell them for $96/share. What is your cost basis? and is it short/long term capital gain or loss?

Answer 24

You paid in $90…so that’s your cost basis.
You earned $6; so that’s your short-term capital gain.
The $100 is a “side” note– as an “expense”…so you have to reduce your capital gain by $100.

Final answer:
Cost Basis: $90
Cap Gain: (Short-term): $500

Question 25

i say....Regulation D you say Private Placement. i say Reg D...... you say Private placement. I say Reg D.... you say Private placement. I say Reg D... you say

Answer 25

Private Placement

Question 26

What's so special about private placement?

Answer 26

You don't have to be registered with SEC! | But it comes with conditions.

Question 27

What are the conditions to have a security qualify to be a private placement?

Answer 27

Investors have to be accredited. You cant sell to someone who doesn't have lots of money.

Question 28

What is an accredited investor? (hint: 1, 2, 3)

Answer 28

Think...1, 2, 3 on your hand. We're talking about a Net Worth of.... 1 mill or greater (not including primary residence) or 200,000 single and expects next 2 yrs to do so 300,000 joint if married, and expects to do so in the current year.

Question 29

Regulation A+ -----------Small and Mid Cap Secur. Regis and No full prospectus required. -- Special rules. and Tiers....

Answer 29

Special rules under SEC for Small and Mid Cap security registration and prospectus EXEMPTION. ``` Tier 1 [ 20 mil+] Tier 2 [ 50 mil+] -- only offers sales to accredited - Offering Circular No full prospectus required! ``` So, a financial industry, company, or corporation...may qualify to have an exemption. WHY? to help them raise capital. Oh! ok. Before Reg A was just 5 mill. Now it's Reg A+...allowing higher amounts to be allowed for sale.

Question 30

How many accredited investors can you sale to at once?

Answer 30

35 investors

Question 31

How do you identify Private placement securities? | Think of these synonyms...

Answer 31

Restricted -- Unregistered -- Lettered Stock -- Legend Stock

Question 32

Restricted--cuz it must be held for... months

Answer 32

6 months

Question 33

Unregistered -- cuz it qualifies

Answer 33

not needed to be on file with SEC.

Question 34

Lettered Stock -- cuz it sends the terms in a

Answer 34

Letter-- the investor agrees by signing it.

Question 35

Legend Stock -- cuz it has a special

Answer 35

Symbol in-scripted on the stock certificate... as "Legendary" so it must be restricted to transfer. W O W! Ooooo.... Ahhhhh! So awesome!

Question 36

What's the 80 80 80 100 tests have to do with?

Answer 36

Intra State offerings... Rule 147

Question 37

How many of the "80" tests make a the Rule 147 come alive?

Answer 37

Only 1 of them!

Question 38

What are the "80" tests?

Answer 38

1. Issuer has its principal office, and receives at least 80% income IN State. 2. 80% of issuer's assets are IN State. 3. 80% of proceeds are used with IN State Office is IN State and All buyers are Residents IN STATE>

Question 39

Can an INTRASTATE be sold out of state?

Answer 39

yes, but not for 6 months after PURCHASE.

Question 40

So...how do you tell which way a security is to register?

Answer 40

Pay close attention to the question. | If all Instate... than maybe Exempt...but has to follow 80% rules.

Question 41

ABC wants to sell 8Mil in WA, and in UT and CA. How does it register?

Answer 41

regular registration with SEC.

Question 42

What is NOT is a preliminary Prospectus?

Answer 42

effective date | final offering price

Question 43

Preliminary prospectus may be used for...

Answer 43

gathering indications of interest. Not sales. Plus... you can't have any other form of communication attached to it.

Question 44

Can you write, highlight, dog-ear a prospectus?

Answer 44

No! it is a legal document. Never ever do this. Treat it like GOLD.

Question 45

Who is responsible for fully disclosing all maters as dictated by the Securities Act of 1933?

Answer 45

The Issuer, with the help of the underwriter. They file the registration statement with the SEC. The SEC only reviews the requirements, and says they can sell their security.