+1-415-670-9189
info@expertsmind.com
Discuss whether you would recommend registering
Course:- Finance Basics
Reference No.:- EM131124218




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Finance Basics

The VirtualStream Company has developed proprietary server and control software for providing communication and media-on-demand services via the Internet. The company is in the process of collecting prerecorded video and audio content from clients and then digitally transferring and storing the content on network servers. The content then is available for replay by customers via the Internet. VirtualStream's mission is to provide the most dependable and user-friendly multimedia streaming service worldwide.

The Internet technology service industry is characterized by rapid revenue growth, with industry revenues predicted to exceed $300 billion in three years. Market participants include companies engaged in video and audio teleconferencing, corporate training, computer-based training, and distance learning. VirtualStream is attempting to focus on helping large companies to communicate more effectively, using both archived and live communications content, via the Internet. Video and audio content is digitally stored in a central location and is available on demand to clients. This approach will save time and money required to duplicate and ship materials. The company also offers a service that enables transmission of live broadcasts via the Internet.

VirtualStream raised $500,000 in the form of founder's capital last year. The firm is now seeking additional financial capital from investors by issuing or selling securities in the form of stock in the firm. The firm is planning to obtain $750,000 as soon as possible from private investors.

A. Discuss whether you would recommend registering these securities with the Securities and Exchange Commission (SEC).

B. Some securities are exempt from the SEC registration requirement. Is it likely that VirtualStream's stock would qualify for such an exemption? Why or why not?

C. Would you recommend that the initial $750,000 be obtained through an intrastate offering? Explain.

D. Briefly describe the two basic types of transaction exemptions that may be available to VirtualStream that would allow the firm not to have to register its securities with the SEC.

E. The SEC's Reg D offers a "safe harbor" exemption to firms from having to register their securities with the SEC. Describe how the VirtualStream Company could use Reg D for issuing $750,000 in stock to private investors. In developing your answer, describe the Reg D rules that would likely apply to this security issue.

F. Now assume VirtualStream also is planning to issue an additional $2 million in stock toward the end of the year. Would this decision have an impact on the Reg D rules that would govern the issuance of the firm's securities? Describe. 

G. The other alternative is to seek to raise the total $2,750,000 amount now by selling securities to investors. Which Reg D rules and/or other securities laws would be triggered by such a plan? Describe why and how.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Today, Snack Foods, Inc. is investing $311,000 in some new potato chip-making equipment. The company expects the cash flows to increase by $70,000 a year for the next three
A $5000 bond with a coupon rate of 5.4% paid semiannually has five years to maturity and a yield to maturity of 7.5%. If interest rates falls and the yield to maturity decre
The present or future value calculations are dependent upon the interest rates used in the calculations. How would you identify the best interest rate to use in a time valu
Describe how financial statements, cash flow, risk, return, and capital asset pricing model, stocks, stock valuation and stock market equilibrium are significant to one's wor
Assuming that most of the accounts payable are owed to its inventory suppliers, what does the difference between these two amounts indicate about how Target's operating cash
Consider a standard mortgage (360 months) with monthly payments and the  nominal rate (monthly compounding) of 5.70%. What portion of the payments during first 31 months goe
To evaluate the corporate finance concept of market efficiency, equity issuance and shareholders' wealth as well as supported by the foundation of corporate finance theories
It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year. Given these constraints, what percentage of the capital b