Use the Chapters list below to select the part of the video you want to watch.
Chapters:
- Scott Pantel - Introduction
- Rod Turner - Introduction & Disclaimer
- Agenda
- What type of companies can use Regulation A+
- What is Regulation A+
- The advantages of Regulation A+
- What are the listing options for Regulation A+; fees and tips
- About ”Impact Technology” investments
- About later stage Biotechs
- Q&A – The fees associated with Regulation A+
- Q&A – How is initial valuation determined?
- Q&A – About Valuation 409A
- Q&A - Costs in more details
- Q&A – Law firms dealing with Regulation A+
- Q&A –Companies successfully conducting Regulation A+
- Final thoughts
MSC is not a law firm, valuation service, underwriter, broker-dealer, or Title III crowdfunding portal and we do not engage in any activities requiring any such registration. We do not provide advice on investments. MSC does not structure transactions. Do not interpret any advice from MSC staff as a replacement for advice from service providers in these professions.
Rod Turner
Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital service for mature startups and mid-sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure, and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves, and eASIC.
www.ManhattanStreetCapital.com
Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108.
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Scott Pantel:
Welcome to everybody. I know that we have more people coming in, but we're going to get started. And I'm going to keep my introduction brief. My aim here is just to kind of frame up really why I'm here and the background on why the interest regulation has been so fascinating to me. So first I want to thank Steven Brock CEO of medical funding professionals and the sponsor of this event. Stephen, thank you, for pulling this together and getting it organized and for your enthusiasm around what's happening in the market. And I know that you've dropped your email in the chatbox there, but I would encourage anybody that has follow-up questions to, contact Steven and Rod, thank you, Manhattan Street Capital. Thank you for really letting us tap into your expertise over the next hour or hour and a half. I have learned a tremendous amount from you in a very short period of time, and I'm looking forward to learning more today. And so, and, and most importantly, thank you all for being here. I know everybody's busy and in this environment that we've been in over the last year, we have embraced the zoom if you will. But there's been some zoom exhaustion as well. And so I know that you're all busy and you're taking time out of your busy day to be here for us. So thank you for being a part of this, and we hope to make it as useful as possible. I'm Scott Pentel, I'm CEO of life science intelligence, and we are a med tech-focused market intelligence and advisory firm. We, we support and advise venture-funded and tech and health tech startups all the way up to the biggest strategics in the world. Companies like Johnson and Johnson, Medtronic, GE, et cetera. And we also work with financial folks, professional services companies that have an interest in med tech. And one of the things that we do as part of our advisory business is we hold an event it's called the emerging med-tech summit. And the purpose of that event is to bring together early-stage companies and provide a platform for them to get in front of sources of capital. It's a tremendous event. And one of the things that we love about it is that in some small way, we get to help early-stage companies get technology into the market to ultimately help a patient. And that's, that's a small piece of the ecosystem, but an important one that, that if we do right, we get to play a part of, one of the frustrating things for us over the last 20 years is seeing really, really tremendous companies with great technologies that can help a patient and save lives, never get to market and never commercialize simply because of a lack of access to capital. And so this relationship, that strategic partnership that I have with Manhattan Street Capital and medical funding pros is one that really is based on me seeing an opportunity for early-stage med-tech companies to tap into alternative sources of capital. And so with that, I'd like to turn it over to rod again, thank everybody for being here. And if there are questions, feel free to let us know, but with that rod over to you,
Rod Turner:
Thank you, Scott. I muted myself because Ákos told me there was an echo coming from my end. So as, as Scott, so eloquently said there, thank you very much Steve for motivating us to make this happen. And Scott for essentially inviting your folks to join us here for what I hope will be a very useful event for everybody involved and thanks to everyone for showing up. So hopefully we'll have, a very useful session for you here. And I look forward to answering your questions here and potentially doing some great things with you in the future. Let's see. I want to give you, I need to give you a disclaimer, which I'll do, and then a little bit more specifics on by myself and my company for credibility’s sake. The disclaimer is, although I'm talking a lot about all the various aspects of share instruments and debt instruments and things of that type here, I'm not an underwriter, I'm not a broker-dealer, I'm not a valuation professional. So, I'm, I'm giving you these pieces of advice as an observer and a participant in this industry with my company, Manhattan Street Capital, obviously. So we're heavily involved in regulation, A+ offerings in making them help in helping our clients make them but we do it in a legitimate manner that doesn't require us to be any of those other professionals with does require me to be careful what I do and say, as well as give these kinds of disclaimers. I've had the good fortune of founding or co-founding or being a senior executive at six technology startup companies that we had liquid outcomes with two IPOs to the NASDAQ. The second one of those is Symantec north antivirus company. I've done numerous mergers and acquisitions successfully where I've done the merger part more than the deal-making part. And I have started out my career as an engineer actually, which is great because I've been able to adapt and learn the other skills involved in leadership, finding companies and building them as it is the leading as the CEO, as the leader of those companies. I launched Manhattan Street Capital in the, in summer of 2015, because I found regulation A+, which had just been announced to be a very well-written regulation, serves a huge market. And so, in my opinion, it was, and I think I'm suited to doing this helping, helping companies that need to raise capital do so it's taken longer to grow so far than I expected. I'll get into the metrics later, although it's, it's accelerating rapidly as we speak. Cause COVID, that's really caused a lot of people who weren't paying attention to pay attention in this new spare time at home, in front of their computers. So, we're experiencing as an industry that is online investing has grown up very rapidly in the last 12 months. So, we focus as a company, mostly on Regulation A+ offerings. We're bringing all the various components together to make them as successful as they can be. We're selective and we're on board and we participate in them and we've learned a lot along the way and what I learned by observing others. And I learned by what we experienced directly, obviously. So that's the purpose of this session is to leverage that knowledge to you. So you guys can decide if it's an appropriate, appropriate instrument for you this time at a later time and how it compares to the other options that you, that you have. Please feel free to post questions in the comment in the chat section over there. We'll get to as many of those as we can starting sequentially as well as focusing on those that we can add value with. And with that, I'll move on. The agenda here is, is what was said in the earlier agenda. Just I've adjusted the contents of the blocks and a little bit, the first item will be what companies and stages of companies could use Regulation A+ realistically. And what are the advantages of it, what it is scheduled for, for typical Regulation A+ the listing options after having completed it how to make it a success, what mistakes to avoid? And lastly, the SPAC options, what SPAC options do you have given that the topic or nature of that subject? So I'm going to start off with what companies can use Regulation A+ successfully. It's, it's a common misunderstanding, misunderstanding that you need to have revenues, or you need to have 30 employees or something to use Regulation A+ that is not the case. A lot of companies that are early stage have used Regulation A+ successfully. It's actually far more about how exciting is what the company is doing. How big is the market time to revenue is it relevant? It matters depending on the specifics. You know, if it's impossible to take them on a new device and get it through the relevant testing for four years, and you make it clear that that's the case, but it's addressing a serious need. That's very exciting. It needs to be addressed. Then we could probably raise money for that. It isn't about how long it is.
It's about how big the need is that we are satisfying and how attractive the market scale of the company can be when it gets there. I'm going to sort of digress a little bit into some misunderstandings that people have when they're assessing should their county, or do they like Regulation A+, the question is the people will ask is when can they take cash out of the bank during the raising process? And if, if you are, if you're not buying an asset or buying a business, buying a building or big or a big expensive device, you can close do escrow closes every week from the beginning, there is no need to wait. The offering documents have to be written in that way, which is difficult. No, essentially you can do a zero-minimum raise of Regulation A+ and you can have the maximum be flexible because set it to the maximum, which is $75 million per year. And then it's up to you. How much of that money do you really need to raise? So, you give yourself the flexibility to raise more. If it goes easily if it goes well and adjusts the valuation of the company along the way to account. And another one that people could get concerned about is I've only ever had six investors so far, how many investors will I have in it? Will it be 38? No, it will be thousands depending on how much money you raise, but that isn't as big a hurdle. And it isn't as big a hurdle as you would think in real life. You know, I've never yet had a company that did a Regulation A+ that was complaining and having so many investors, they, the logistics are handled by the transfer agents. And if you think about it, it's what every public company does, has to deal with, and does deal with successfully. We haven't seen any situations yet where, you know, one, the investor thinks she has a right to call the CEO every week for an hour and complain about things or shoot the breeze have not seen that. It's the type of people that are investing online in a Regulation A+ are often a different breed than we're used to. They're more main street investors, which I'll get into more later. And I think another, another one that matters greatly though is where does Regulation A+ fit best? And I'll get into that more, a little bit later, but essentially the motivations for the investors think of them as optimists, because most of them are institutions that participate. Aren't optimists, they're serious. They're looking at the scale and scope of the opportunity with a very hard-nosed approach. Obviously, we didn't have institutions participating in a year, year, and a half ago, but now we do. But the main street investors who will be the quickest and easiest to reach, they, they care about what you're doing. If you're making a device that addresses a need that they personally care about, that's the easiest solution. If the financial upside in the company is such that they want to be in it because they, they can, they can see it bringing them great returns in the future. Then that's another reason that they'll want to invest. If the market is too small to have a big upside, and if the product itself is addressing a need that the consumer investors, mainstream investors don't even understand, that's something where we should use another method of funding because online fundraising probably isn't going to work in Regulation A+ or via the methods. Fair enough. I cannot some more questions on that later, and I'll talk to it in different ways as we go through this. So now I'm going to talk about what is Regulation A+ and then, then I'll go into why it's, you know, what are its strengths? I won't look at the questions yet. I'm honest. It's distracting to do that. I'll stay with the flow here. So, what is Regulation A+? Anyone can invest from anywhere as long as it really means in Canada, it's difficult. You have to go state by state and ask permission to get their investors in and internationally. You can't raise money from Irani, Iraq and, you know, North Korea, that's the U.S.'s perspective. And technically at the moment, people have raised money in many countries around the world. Technically the financial regulators in those countries could say no, and if they did, then what would stop doing it? But that has not happened yet. So, you can raise money successfully anywhere in the world, except for the few problem countries that the U.S. Blocks. It's a great instrument to bring liquidity to the investors and to the insiders in a company, I'll get into that more later, it is actually a public offering with a capital P and a capital O, but it's not an IPO unless you unless you go list the company on the NASDAQ, that's an IPO, but it is a public offering. As far as the SEC is concerned. Of course, you can lock the shares for whatever period you choose or other instruments, you can lock them. Then it isn't really public anymore because there's no liquidity. But as far as the SEC is concerned, someone who buys your security in Regulation A+ can sell those shares. As soon as they get their hands on them and the transfer agents, they can sell them right away and say, well, it depends on the demand, right? That comes later as to what you do to facilitate that you only need a gap audit if your company has existed two years or more, you need two years of gap audits to file the documents with the SEC, but post offering, if you do not list on the NASDAQ or the N Y S E, then you only need pop to produce a U S gap audit once a year and five, every six months management financials. Okay.
So yes, there's an ongoing reporting obligation because it's a public company, but it's not onerous. And if you list on the OTC QB or QX, same audit requirement, once a year, us gap audit, unlike a company that got demoted from one of the big exchanges to the OTC markets, where they have the PCA Obie, quarterly audit requirement that they still have to live in. It's really interesting to know that typically 60% of the investment money flows in via a smartphone. So, when an offering is live, the advertising is typically social media or advertising, drawing in people who were doing something else. And then if they like it enough early engage, and if they like it enough that they might invest, they'll click the investment box and give us their email. And when they've done that, then sometimes they invest right away. Sometimes they'll stay in the network of the audience of interested people that we send emails to. We've had days where seven out of 10 of the people who clicked on the invest now button, gave us their email and invested on the first visit. So, you know, for sure when that's happening, that these are optimists, right? There's no way they're taking a few days and doing thorough due diligence. And I know this too because I'm seeing the comments coming in order to make sure, you know, I monitor those things to make sure that the CEOs don't forget them, not ignore them and answer them and were needed to help them and answer them in the correct manner. They don't post any questions, but when they come in and you know, it's amazing, you'll, you'll have a company doing an offering stating that they don't intend to list on any major exchange at all at any, at any point in the future. Not that many companies will be so hard nose just to say that, but then you'll still get people saying when's the IPO the four months in after they invested. And they're asking that question because they're optimists, right. Very different breed than in a Regulation D offering. I mentioned the reasons they invest Regulation A+. I'll give you more detail on the metrics, it's probably up to about $4 billion of capital raised this year is probably running at about two and a half-billion dollars a year run rate in 2019. It was at a billion dollars a year. And that's the same size as the private placement market. As a whole, in my view, in my view, having done the research, I launched this company when Regulation A+ is known everywhere that it can be used. I expect it to be about a $50 billion a year category of financing, $50 billion a year, right. Is that's my expectation? It's certainly taking longer to get there than I expected, but that's the nature of the beast, right? We often find such a typical average raise is about $23 billion. The large raises tend to be real estate because it's easy to understand. And there's, as you know, there are all the other obvious advantages in real estate for us MedTech biotech our biggest category of clients and real estate. Those are the two biggest sets of appliances for us. Some blockchain companies coming through blockchain are exciting. We're investors and a couple of gold companies because gold is exciting to investors. Same thing. If it's a substantial company, then it makes it easier to raise the money about two-thirds of the company that starts, who started fighting with the SEC finish it that's the, she never says, no, it just comes back to you with more questions. My belief is that companies that bailed on that didn't realize how big an undertaking it was. They thought it was lightweight and it isn't lightweight. You know? So, I think that's probably where the one-third, it didn't get through comes from. We've had companies that because they're doing a Regulation A+ with us get bought out. We've had that happen once where it's happened. And another one where it's being discussed as we speak because the Regulation A+ I'd like to say, it's because they're all Manhattan Street Capital, and it might be, you know, but that's, that would be a little bit of a stretch in truth, right? But what I do know is that doing a Regulation A+ brings credibility to the company that completes the qualification process. It's, it's not the SEC doesn't allow it to be called an endorsement, but it feels like an endorsement because so few companies are able, to pass muster with the SEC. So strategic partners are more likely to want to deal with you when you have passed muster with the SEC. I see that in ways I had not anticipated, it's been very, very beneficial. So now on to the advantages of Regulation A+ it's easier to raise money. It's easier to raise money when we're doing the company we shouldn't be doing, which is what a big part of what we do is make sure it's as certain as we can, that we're only doing Regulation A+ offerings where it's going to work.
That's what Steven does. That's a big part of what we do is we don't want to waste everybody's time. We want to work on companies where we know based on our experience and what works that we're doing a deal we should do, but we are, then it's so much easier to raise money from main street investors. And now I'd have to say for the first time, I can say this, that institutions are taking these offerings seriously. And as long as they're dealt with in the right way, they are participating in a big way. That's a whole new twist and therefore more on the same of the same way or accredited investors participating to depends on the nature of the offering. Marketing is required. I like an S-1 IPO where there's a long, quiet period in a Regulation A+ you have to mark it all front. You're expected to, that's a part of the program in order as ways and limitations on it. But it's really very straightforward. Limitations are not too strict. In my view, it's straightforward to understand the process of getting a Regulation A+ through the SEC is much easier than an S-1 IPO. So, it's a lot less burdensome than you might expect. That's a big advantage of it. You are allowed to change the share price as you go. And if you change it within zero and 22%, you notify the SEC and then change it. You don't have to ask permission. It can be, it can be raised in small increments, as long as it's done in the proper manner, which is restricted as a, as a way to reward your early investors. And as a way to incentivize people who are sitting on the fence, spectating to invest as long as it's done properly. And if you want to, let's say your actual need is to raise 10 million, but that happens really easily for some great reasons. Then you say, you know what? Let's do 25. You can pause, do a share, split, or double the share price. You know, whichever you, whatever kind of approach you choose to take, then you go to the SEC requesting that change. You'll pause with the raise, but they don't judge the merits of the valuation or the share price. So that's typically a two- or three-week turnaround, as long as you don't change anything else. So don't change anything else. And you have great flexibility as to how much money you end up raising. If things go well, or if you have a bigger appetite because there's a need for capital that you haven't planned, that's it, there aren't many places you could do that. There aren't many offerings where you have that flexibility. You can use the proceeds of the raise to fund the ongoing costs of conducting the raise. As long as the offer is written. That's a nice thing, especially, you know, so few companies want, if the problem with buying an asset, let's say you need to raise 20 million to buy a company. You have to fund all the expenses until you hit 20 million. And then you close escrow. That's a very expensive journey, right? Whatever it costs, you know, if it's 10% or 12% cost of capital, that's a lot of money you have to shell out upfront. So, we don't have clients doing that. You know that's so expensive. The really positive thing, the positive side of having lots of investors as especially if you go about raising the money in the ways that I recommend, which is it's almost not a religion, but there's a lot of methods and techniques to this that I've found are really, really successful. When you do it the right way, they are a part of your team. They are a part of the team. They feel ownership beyond pure ownership. They love the journey. They love the company. They are your biggest brand ambassadors. They'll help you sell the product when it comes out. Right? Very, very valuable asset.
Obviously, if they can impact it because B2B purely in far, far, far isolated from consumer branding effect. And it won't, it won't work as easily and great liquidity options post offering, not just for investors, but for insiders too, which I'll touch on in more detail later. And, you know, unlike other methods of raising money, like venture capital, which I'll touch on you, don't give up as much control. You control the nature of the offering, and you make sure that you are not, there's no such thing as certainty, but you are less likely to lose control of your own company. Why is it better than venture capital? Valuations are substantially higher Regulation A+, and you're not giving away board seats. You're not building it. You're not, you're not bringing in one or two powerful investors who end up redirecting the company and maybe even firing you. Not that that's, you know, there are wonderful venture capitalists. I've worked with some of the best blue-chip, which implies the same thing, right? Blue-chip VCs in Silicon Valley with some of my companies. And I've had fantastic journeys where they were really, really great, but there's a heck of a lot of them that aren't that great. And I've seen companies driven off a cliff by the revised strategy that the VCs applied to the company after the fact, and it's better than a reg D in the following ways, it's easier to raise the money and the valuation substantially higher fewer restrictions. So, it's, you know, and your investors are public right afterward. You've got those liquidity advantages. However, you choose to utilize them. Why it's better than an S-1 conventional IPO is this. In an S-1, you have very expensive. Auditors' very expensive legal fees because, hey, it's a public offering now, you know, they, they charge giant fees in a Regulation A+ that becomes an IPO. You all pay much, much lower fees. It's like, one-third one-quarter the fees for audits and for legal, that matters greatly. And that's even if you go list, right? Cause you can, you can choose to list your Regulation A+ through the IPO process. Although probably most of you aren't intending that, but another advantage is that yeah, you can market it and take control of it. And you're not limited to, you know, will the underwriters do this for us? Because even in today's environment, which is really hot, it's so hot that the underwriters want the good deals delivered to them on a silver platter. This is a black microscopic platter, but you get the idea, right? We, we de-risk companies where, where a company wants to do an IPO with us. We de-risk the offering by raising a lot of money and getting more than enough investors. And then if we're going to use an underwriter that you don't have to do, but if you do it, we're delivering it to them on a silver platter. And it's more a matter of how much more money they will raise in the transaction being attractive. Okay. So those are good things. That's enough right there, I think. And you can market it, right. That's obviously a part of the program, but those are that same also does put you in a better position for MNA. You've got a higher evaluation. That's, that's a serious issue because the acquiring entity knows that's going to be the price or right. They're not, they're not going to get, they're going to get a lot of grief if they try and buy your company for less than the most recent valuation. And obviously you, you, if you're in it, or even afterward, you qualify with the SEC, you know, it's a more substantial business or comprehensive flare to it than if it had not. You know, those are obvious reasons MNA, I mentioned MNA companies that just announced they're doing a Regulation A+ or are doing or Regulation A+ with us. We lost one company just as they announced to all their interested parties, that they were doing a Regulation A+ with us. And the other one I mentioned is doing a Regulation A+ schedule theoretically, you could rush this, but it costs less if you don't rush it. I mean, the money-raising part, the first part being, preparing the offering documents and getting it through the SEC, the preparing the documents, as long as you don't have a complicated audit is going to be a back two months. It can be less, can be more, but in a typical situation, it's two months and two months to get through the SEC and we've done it in far less, but it doesn't plan to assume that so four months, and then we're ready to go live in the fifth month. And then we have 12 months in which to raise the money before this Regulation A+ expires. And we can buy the, do another one that's identical or different that starts back-to-back. You can do a Regulation A+ every year. Each of them has a maximum of $75 million.
Okay. If you do the same mix, the second time around, it's easier to get through the SEC. And it’s less legal fees because guess what, you know, nothing much, the substance of the offering hasn't changed that much. Right? So, the point I wanted to make there is that if you decide you're raising megabucks, you're raising 50 million or so that gets into serious money. Trying to do that in three months is unless we're very, very lucky with institutional involvement. It's about impossible because when we go live in month five, approximately we are spending very modest amounts of money on advertising and adjusting the targeting and the content of the ads. You may even have two or three different landing pages that were driving different ads. Ads are driving investors to different ads for different messages, different landing pages. And until we figure out the mix until we get the efficiency high then is when we step up the spend you step up the spend on advertising, we are advising. And then is when the rate of capital raising accelerates, right? You don't expand that at the very beginning. Typically, a company will rent. We'll spend a modest amount in the first month and raised three to five times that that's the norm that we see in the first month, which frankly, I didn't really expect before I started doing these, but we've had better than that, but I wouldn't want to imply that it's always that easy. Okay. So, it's going to take you a year to raise a large number and trying to rush it. It's going to cost more. It's going to make it more expensive because the advertising outlets, don't give you volume discounts. They raise the price unless we can figure out ways to, prevent them from doing it, which is one of the things that I am researching and testing as we speak, they tend to raise their prices when you, when you really Jack up the spend rate. So, we have to work very diligently to find ways to limit that effect. Yeah. That's one of the things, as I said, that I'm pushing for, okay. Listing options. This is interesting stuff because you don't actually have to list anywhere. A lot of people think because I did a Regulation A+ I have to list absolutely not. You don't have to list anywhere. In fact, you can establish a direct liquidity program for your investors. There are better options than that in my opinion, but you can do so. It's, it's a burdensome thing in some ways, but you can do that. It becomes a part of the offering documents. And it's done in a number of the real estate offerings that never intend to go public anyway, the ones that do it that way you can, you can list nowhere. That's the first one, nowhere at all, you can list on an alternative rating system, which I'll explain. You can list all the OTC, QB, or QX. And the, if you go on the only difference between them realistically is the U.S. Gap audit every year and, on the OTC QX, once every quarter management financials, if you, if you go to the QB six-monthly financials, and obviously if you go to the NASDAQ LAN quarterly PCA or B the finance audit's and you know, the rest of it shooting match. If you do a Regulation A+ IPO to the NASDAQ, when you arrive there, the next quarter will be a PCA or be an audit. And there are a series of other subsequent filings that adjust the Regulation A+ up to the full that's one SPAC is a routine vise that is made easy, but it has some expense, you know, say 60 K illegal to get to the, to the point that you listed and then say 30 K of legal to get all that. Okay. So where would you list a lot of things, companies that we talk with, or I talk with they're not ready for the rigors? You know, if you're years away from having a product it's seriously challenging to keep the market excited. And actually, you've got amazing marketing going on, which some people do. And this is possible to do the problem with NASDAQ and the NYSE and with the OTC markets is that it's altogether too easy for brokers to put naked shorts on stocks. And that's what they do. So if you're flapping in the breeze unprepared, and it's a long time until you have product shipping revenues and profits to report, you are vulnerable to having your share price hammered in those markets.
So, you know, I don't want you to do that, that if you're not geared up and ready for it, because it seriously hampers the company being public. There are so many companies that are public like that, where it's a serious disadvantage of my opinion. So, I don't want you to do what you choose to do, but my recommendation is only to take on a listing on one of those exchanges if you're ready to handle the rigors of being there. Okay. That's where the ATS comes in to be as being a lovely thing. ATS leads, alternative trading system. It's a new development regulation that has changed over the last few years. There was one more regulation change about a year ago. I think it's a broken deal. Can establish an ATS that is a number of them. Now they're still early and young, and you can list your security on those exchanges for a modest price, probably about 10 K a year and 10 K a year to file with the states to get the ability to resell it or security for its liquidity. So you've got 20 K a year expense for that, but all of the investors are liquid then, and it's just a matter of buying and selling with no shorts and no naked shorts. So you don't have to mess with worrying about, you know, you've got a strategic meeting coming up, imagine this, you know, the company is kicking and doing great, but you got hammered in the stock market. And now you're having a strategic meeting with a partner you really need, and you have to spend the first half-hour defending your share price, or really explaining why or share price got decimated over the last three months. You don't want that, right? Unless, you know, you just don't want that. In my opinion, having quiet trading on an ATS, the enthusiasm for the company will determine its price. Unless, you know, if you're really concerned, you market it, you could even do a tiny Regulation A+ every year. And the selling price of Regulation A+ then will determine the selling price on the alternative trading system. Right? That sounds like a very self-centered idea, but I don't need it to be there. The point is that it's, there's no naked shorting. You know, it's a simpler life and your investors do get liquidity. It's that, that's the main thing. When they're putting in their money, they don't expect that they'll need it, but they would like the option. They love it. If you go in public to the NASDAQ and they're going to get an obscene, high valuation, they don't love it. If you go out there and get hammered to death. Right? Okay. So the other thing which isn't really widely known is that post-completion, all of the insiders and long-term investors are liquid, as far as the SEC is concerned. So, the company could choose to lock those people up. It's prudent to do so in a balanced way. In many cases, that's a choice, but if you do nothing, the SEC says they're all liquid. It doesn't list them for you, right? Because if you've got this common stock that you produced, you created a new class with common for the Regulation A+ say, then that class is what you listed. And if you want to list other classes to make it easier on your founders or on your past investors, then you can do so, or you can offer them an option to convert the class stock that they own, right? You can one way or the other, they could be liquid with constraints. So, the insiders and the investors who are more than 10% are limited as to how and how much they can sell and when they can. So, after the company's reported its management financials, and after it's reported, it's an audit, they have a month in which they can sell securities. And then there's a limit on the volume, the volume, which they can sell per day.
So, you know, if you don't have much liquidity, it's going to be a slow sale process for them, but being liquid, you know, a lot of these, a lot of companies, one of my favorite expressions is it's, it's a way it's an overnight success that took eight years in the making that describes my company. It feels like we're kicking right now. Every great thing with so many great things happening, happening, it took more than six years to reach this point, you know, and you call people, who've been with you for a very long time to give them away to be liquid is a nice thing, right? So these are good things about Regulation A+ how does succeed in Regulation A+ I touched on some of these, of course, understanding that you're dealing with mostly optimists. Now we're getting institutions. There are things we can do in the offering to make it appealing to institutions because they want a special deal. So you build it into the offering, okay? Because the fact that anybody can buy-in for a thousand dollars or less tends to put them off, they want, you know, they're putting in $4 million or more, they don't really want the same treatment. And you can do that. As long as it's built into the offer. Social media advertising is the primary source. If you don't have a giant following, which most of us don't when we haven't got a product out there yet, then we're down to creating demand by one means or another generally it's social media advertising internationally. It can be a bit of a different mix constantly learning, but basically, that's what it is. And having a social media presence helps if you've got a large fan base that you took the time to build, doesn't actually cost that much. That's a good thing to do ahead of time. We can arrange that during the raise it isn't as cost-effective. Then when you're rushing to do it, as it is to spend money on advertising, but it helps now we're getting institutional interest, actually targeting institutions helps to have a special mention of that for them about a special packet of information you send to institutions, things of that type. You cannot walk, you cannot provide more information to anyone invested on the rest though. So you will be taking the same available information and packaging it up in a way that's presented differently for institutions, you cannot provide unequal information. That's something that the SEC cares greatly about. You can evoke broker-dealers to help raise the money. And in an IPO, you can evoke broker-dealers really underwriters. In that case. It's important to know that they won't add any value at all at the beginning almost without exception, because even if the president of the broker-dealer, intends it, the reps of its Salesforce, aren't going to take a risk with their client relationships and an offering that hasn't yet succeeded at the beginning. When you need that help the most, they're going to do absolutely nothing. No, they are not going to dial up their favorite clients because they're afraid understandably that the company will never raise money for reason, in which case they burned their client relationship. And that's the most valuable asset that they have, right? When we proved it's already successful, then they want to be on board. We can get a better deal if we need that. We can add to that. But we got, we got to do the work to generate the momentum, to earn their involvement with actually add value. Okay. One of the ways to raise money to fund the expenses of doing or Regulation A+ is to raise money in Regulation D which is a convertible note that converts into Regulation A+. And you can give hefty discounts to those investors because they are taking a bigger risk. Then there's no guarantee the Regulation A+ will ever exist. So, you have to have an alternative exit route, which would, which is normally a Regulation D valuation investment. But you can give them a discount over the Regulation A+ offering price, having decided what it is. And you state that these investors, so that convertible notes upon going live with the Regulation A+ let's say their cost per share was $3. And you're going live at eight. Their cost was three, and they're getting $8 worth of liquid securities in Regulation A+. And you can give them a scale of discounts as they go in order to motivate those investors, to participate in the pre–Regulation A+ funding, right? As long as it's done it can be done well. So, a lot of companies have investors who were sort of on the periphery that is, that, that need a nudge.
Otherwise, they'll stay on the fence, waiting for something great to happen. So this is an example where Regulation A+ can be really good for the company. And it's a good reason for them to invest because they get the prospect of a rapid turnaround with a nice marker. Took me a long time to find a securities attorney that even believe we could do such a thing and would write one. And the first one was 90 pages. The new one is about 12. So, you know, now it's deeply good, right? But it, nobody could understand how you could do a convertible note into an instrument for an offering that might not occur. It's not that big a leap, but you know, attorneys aren't known for their innovative innovations, more tips, and techniques to succeed. I told you, you can change the share price. You can do a zero-minimum raise. So, you're raising money right away, avoid big auditors because they charge too much. Sometimes they can't get their act together in time because you're not a big enough priority. And some of them will Jack up their price three or four X, right at the end when you can't leave them anyway because you have to start fresh with a new auditor. I have a blacklist of such because, you know, we got to avoid that. Keep the term simple, keep the offerings that the security that's being sold. And the nature of the offering is simple because the last thing you want is an investor that loves it being confused. And then some other thing comes along and they, oh, I'll come back later. And then they don't. Then you lost them. Keep it simple. Avoid. You can do a test, the waters, which I actually suggested to the SEC in 2012 when they were looking for input. And it's a great facility in some respects, but don't, if you do a test, the orders don't expect to get lots of revenue or capital brought in that way, and really marketing it early is a bad idea. Now, in my opinion, because you get people bored, you can't invest. It's like, you know, endless flirtation waste of time, right? They want to move fast. They don't want to be sure of what it would look like if they could invest. But then cannot. There are exceptions only for testing purposes, but not for actually keeping it out there, getting people excited because they get bored. They don't get more excited to get bored, keep them in their room per investor, low enough that when these people come in and they were doing something else, they saw an advertisement. How am I doing on time here? Okay. They saw an advertisement. They were doing something else, minding their own business. And they see an ad that catches their attention. They come in to look at the offering page. We've got to grab their attention right away. So they stay for 10 seconds. And then if they stay for 10, we got to keep them interested. So, they stay for 30 and then maybe get him to come back or get them to stay for a couple of minutes. If one of the first things they see is the minimum is $5,000. That'll go away right away. Cause this is casual. They just soar. 5K is casual money for a retail investor. So you keep them at the minimum low enough that they stay you don't lose them. And then they may invest $5,000 later. But at least you got the warm, the hook. We got them to give us their email. They're part of the audience and they're investing or they actually invest because they can do it because it's playing money right now use a small marketing agency. We do that all the time. Of course, that's part of what we do is bring the service providers that are successful and cost-efficient that we involve them. Not only them, the bigger, but the big marketing agencies also have seemingly high expectations of how much the advertising should cost, and their fees and their hourly rates are far too high. You just can't afford to use them. So, we never do anything against them personally, but you know, there's just excessively expensive. It's like a, it's like a production line. You know, we bring in agencies that are really talented, but something to prove, and then they get too big for their boots sometimes. And then they go, we let them go and move to the next because we can't afford their prices anymore.
Scott Pantel:
Not broadcast your question. Yeah. Just while you're on the subject here you know, we're, we're talking to med-tech, medical device, larger audience. And one of the things that attracted me to what you guys were doing is the fact that we're all obviously doing business and trying to make money, but we're, we're trying to make a difference as well. And it's my belief. And many of those on this call that med-tech and healthcare, it is the original and the best impact investment. And that's to steal a line from my friend and one of the innovators in our space, Chris Bellis, who says it all time, that tech is the original and best impact investment. Talk to us about how the fact that what we are all doing here on this call is largely impact technologies. How that factor into that investor, that's sitting at his or her desk that sees an opportunity about maybe a technology that would touch his life, his nephew's life or somebody's life and impact, impact investing. Right.
Rod Turner:
All right. So before I do I want to say that I am predisposed to do companies that improve the world and improve people's health. I am predisposed to do that. That is who I am. So, I love it when we bring companies to market to do this right. And that's a big part of why most of our offerings are biotech and med-tech is because it's not, it's not just my opinion. It's because they engage with retail investors who want to do things. They want to help Ethel that on who's suffering from agonizing pain and killing herself with regular painkillers, right. Or they want to help people who were addicted to opioid-based painkillers, as we know, that's a big thing. So, it's huge to me personally, to be able to do good while doing well, if you know what I mean. And that's the nature of human beings. We've provided them a way to vote with their feet, right? So, imagine, I don't have to imagine this. We, we brought a company in the market that was doing a, a had a very good biotech product to treat people who have what's a stock metastatic cancer, and the most valuable use of it is for triple-negative breast cancer. And anyone who's experienced or been exposed to people that get triple-negative breast cancer knows how malignant it is. So a method stopping metastases of breast cancer is vitally important. You know, it's that kind of offering, which gets people who there are so many people that know how severe it is. That's biotech. I know med-tech when it's affecting people's lives. That's one of our most successful offerings right now as a med-tech company, right. In terms of the rate at which they're raising money, the efficiency, and the interest they're getting from the right quarters, because they have huge commercial potential because of the value of what they're doing and the scale of the need and at the retail level because people care. Right. And being able to say to yourself, yeah, I'm not just watching, I'm voting with my feet. It doesn't matter that it can't happen right now. I don't have anywhere else. I can put my money into good work. Right. That's a huge part of the successful offerings, in a Regulation A+ situation and my actual experience. So, I thank you very much, Scott, for bringing that up. And I'm sorry, I didn't already convey it. Cause it's, it's a, it's a key thing when it gets when it's less when it doesn't work as well, is when people don't understand, you know, if you've got an ailment that we're going to be dealing with, that is not known, then it's a more of a challenging sale. Right. But that's always the case in life is okay. But if you were to use a broker platform dunk, because they charge lots of money and they don't add any value for the money, you don't get the return. We are an auto broker-dealer out of, out of deliberate as, as a deliberate strategy, because it seems to me just like Amazon's display has been for decades, displacing brick and mortar stores. You know, one could say too much. So in recent times, what are we doing? We are taking what used to be done in a brick-and-mortar manner, you know, with pounding the pavement and things and converting it to an online, online basis. So, in the long run, I think that broker-dealers will transmogrify into different types of outfits. So, my intention is to do what we already do, which did bring the cost of access to capital down because that's what we should be doing, right? So that is a part of it. And being able to do IPO's is another part of it. I'm making it easier to invest so that if we were a broken dealer, every investor who signed up who was new, who was a new investor, most of them are new would have to answer the FINRA required the broker, the FINRA regulator questions, which takes about 45 minutes to an hour. No one wants to put that level of effort into making an investment. They don't need another brokerage. You can't anyway, you know, anyway, so voice avoid broker-dealer avoid tier one, a Regulation A+ there's a lot of confusion with it. Tier one is irrelevant. It doesn't, it isn't useful. It's too expensive is so few examples that it works in probably one or 2% of capital raised this year in Regulation A+ will be tier one, tier two starts at zero. Does it start at 20 million or 22 million? It starts at zero and goes to 75 million. That's the one to go with. So mistakes to avoid an escrow minimum of any kind of half a million, a million and a half, as long as it's logistical. That's if you have to have that much money to do something then okay. But otherwise, avoid it. Avoid capping your res number, give yourself a latitude to raise it as you go. If things go well if you go public to the NASDAQ using Regulation A+ the NASDAQ requires two years of operating history or most, most med tech companies have been operating for a long time before they reached the point that they're ready, but that's a requirement. Make sure that your company is going to resonate with investors. That's a big piece of what we do both with knowledge, as well as tests where relevant we do tests if needed, avoid an expensive law firm or a big auditor. I mentioned that already. Don't think you need to limit yourself to the USS especially if you have a strong presence for some reason elsewhere a lot of non-U.S. Investors are tromping at the bit to invest in health feeds from exciting our companies. They'll if you have a footprint somewhere, bring it to bear, let us, you know, make sure that we advertise to them because that will be successful in many cases.
Scott Pantel:
The other question for you, sorry to interrupt the flow, but I know we're coming up on time and we have a lot of questions that are stacking up, but one that I get asked and you've touched on it at the beginning. But I'd like you to address it briefly if you can. Because we have a, we have a lot of really early-stage companies here. You've talked about it, but we have others that are later stage. So, talk a little bit about the wheelhouse in terms of the stage of development for these companies.
Rod Turner:
Yeah. Okay. So, if the further along you are, the easier it is typically to raise money in a different light because now the con the, a lot of it's been de-risked. So that's important to know. I want to touch on the types of securities. You can offer those securities that are not limited to equity securities. You can offer equity securities with dividends. You know, you've got a lot of latitude as to what you're offering. Any legitimate security can be used, even bonds. Typically, it's equity or debt a high-interest debt instrument is sometimes appropriate. I'm not sure if I'm getting your question though. I missed
Scott Pantel:
I'll, I'll be more direct about it. And I see a lot of questions stacking up. So, I'm going to, I'm going to suggest we go to those when you, when you're ready, but I guess I'll be more direct with that question. We have a lot of pre-revenue companies that are curious if they can run a Regulation A+ and this is sort of a loaded question. The answer is yes, but I won't confirm that.
Rod Turner:
Yeah. So yeah, I touched on that at the beginning to make sure you, those of you who should be interested would be, but I'll, I'll be happy to revamp that.
Scott Pantel:
I'm at the end here. I had a couple of questions come up. So anyway, I'll, I'll turn it back over to you.
Rod Turner:
Yeah. Yeah. So, so you don't have to have revenue. It is not about revenue. In many cases, it's harder to finance a company that has revenue because the investors want to see how fast it's growing now, now, now, but besides the point, it's about the appeal of the company. It's about the appeal of the size of the market. How uniquely well you are how uniquely, well you are solving the needs in that market and how uniquely strong when you get there, you will be to prevent others knocking you off, you know, in three weeks, obviously that's an extremely extreme example. Those are the factors that matter. And, and frankly, they only matter some of those only matter to the institutions and the main street investors care the most about you doing something they care about. They don't mind that it'll take a long time. They don't know. They don't mind that you don't have revenue. They're not expecting you to have revenue. They don't mind that you're spending money. They expect you to be able to do this out of thin air. Is that clear enough? If it's a compelling company that is all we need, that is all we need is a compelling company, which has got to appeal to mainstream investors. And if it's, if it's only going to appeal to institutions, because the scale is so huge, great, where usually we're used to dealing mostly with main street investors. So let me just make sure none of the other tips I have on my list are particularly strong. Yes. Yeah. Don't prepay a marketing agency. You don't want to be able to, you don't want to get stuck with an agency. That's no good. And they've got lots and lots of your money. We had that happen recently where the client didn't ask my opinion. And I would've said do not use that agency and he gave them huge dollars and they didn't deliver and then, you know, waste the wasted money. Okay. So, so Scott, please feel free to ask questions. I'm going to start it on the list, the top of the list, if you would like to ask them, that's fine.
Scott Pantel:
I think they're pretty sequential. Why don't you start at the top and jam through them to team up for you? No, I'm good. I'm good. Get past our stuff
Rod Turner:
Here. The fees that are associated with this process, you've got an audit and that expense varies hugely with the nature of the complexity of your company for the past two years. So that's very hard to predict securities attorneys range from, for a non-IPO thirties, probably the lowest 30 K is probably the lowest. 60 K is the highest I would want you to pay for the securities attorney. There are attorneys that charge a lot more than that. Hideously more than that, but I wouldn't want you using this for that purpose. So, the other component, parts, service, and fees to us, we charge $10,000 a month for consulting for nine months with warrants that match that. And if it's confusing, just ask later, we'll get into that. And while listed 5,000 a month. While, while alive on our site, we charged a $25 admin fee for each investor. The biggest expenses in advertising by far, that is where the money gets spent because you know, you can't put an offer together and put it up there and hope people will come. You know, it's like having a party, nobody gets there unless you've invited them leaving, then some of them won't come. Right? So it's all about the marketing efficiency and spends that is where the biggest expense lies. The lowest, the most efficient advertising spend. We have achieved not in month one, but after scaling it for a while was $3 and 30 cents per $100 raised. That is the best I think probably in the industry. And we haven't repeated that the best in recent time was $6 and 50 cents per a hundred dollars raised. But it doesn't start off at that level. It starts off more expensive. So that is where the big expense is. And in the beginning, it is efficient, which is why we don't want you to spend too much money on advertising. I think you should expect that the upfront costs to get to the point that you are alive will be around 260 K ish. That's sort of a broad number. The audit is a huge variable, right? And then when we're live raising money, it's all about that marketing efficiency and getting the costs of it, of the advertising down as low as humanly possible. So we taint you contain the expense, cause I don't, I'm not going to be recommending to you that you step up to a huge span until we get the efficiency, right? So it's incrementally improving in the first two months, maybe even in the first, in the first three months and you're gradually ramping up the spend and then accelerating the ramp-up as we go. I would say if you raise 20 or so million that the total cost is going to end up being 10, 12 is as high as 14% cost of capital, but we're fighting it all times to bring it lower. And the best we've done is total costs of six and a half percent. That's the best ever. But again, you know, the best ever doesn't repeat very often, right?
Scott Pantel:
Rod, why don't we go through rapid-fire if it's okay, I'm going to go through some of the questions and tee them up for you. Okay. I'll go through some of the brief ones here. Roadshow requirements, question mark, or just online platform, attracting investors
Rod Turner:
Online platform. And we use a webinar instead of a roadshow, and then we use the recording of the webinar, and then we do updates.
Scott Pantel:
Okay. how is initial valuation determined? And before you answer that, I put a link into the chat cause we're running out of time and there's a ton of questions for a more detailed assessment. The set up the calendar with Steven Brock and he can very quickly go through all of these in detail, but how his initial evaluation determined high level,
Rod Turner:
Just use this rule of thumb. You know what your dilution will be in a reg D scenario. It's about a little bit better than half is diluted to do a Regulation A+ just use that as a rule of thumb as a guideline. I'm not a valuation professional, but that's what I see working.
Scott Pantel:
Okay. question is valuation via 409A sufficient.
Rod Turner:
It isn't necessary. The SEC isn't going to second. Guess the valuation, it's a bag. What is going to make the investors happy three years from now, right? It's about not jacking up the price too high because you can actually getaway. We don't want that. We wouldn't do it with you. We wouldn't do an excessive valuation deal because it's so important to all of us that three years from now, the investors are celebrating, but that rule of thumb I gave you just now says it's an attractive valuation. That's a good, a better way to go in my opinion. But valuations in some Regulation A+ have been too hard. In my opinion, not very often. And
Scott Pantel:
Rod, I see a lot of questions about costs and I know it, it really varies. It's a difficult question to answer. It depends on the situation and there's an opportunity to set up a call and get a detailed analysis, but you want to at a high-level talk about costs very high level.
Rod Turner:
Yeah. So the front-end cost is the thing that most people worry about. And I covered that about two 60 K, but the biggest variable here is the audit. And then the ongoing expense, you know, realistically, if you shouldn't do Regulation A+ for a 2 million raise, it's too big. It's too, it's expensive. It's too much upfront work, but at a 10 million raise level, you know, 10, 12, 14, maybe 16% total cost of capital is the range. Plus, some warrants, if we bring in broker-dealers, the warranted part goes up on the costs will be higher, but that's without heavy broker-dealer involvement. Right. So I realized that there's a range there, but that's real life. Right. And I can't tell you exactly what it's going to be without knowing the specifics.
Scott Pantel:
Right. sounds like you can issue a common class in the Regulation A+ while, maintaining your founder's preferred stock class. Do the common Regulation A+ shares have voting rights?
Rod Turner:
Yes. They, they have what you give them. Typically, companies will allocate better, more volume rights to the founders and the investors, but that's a choice of yours too. You choose the new security and what it's, you know, what, if it's preferred, you choose the preferences that it has, and so forth.
Scott Pantel:
Okay. is there a market for debt? Can we issue shares with a fixed dividend?
Rod Turner:
Yes, you can. And that then, you know, that's a different puppy with a different left type of appealable obviously, cause that's a different group of investors, but yes you can.
Scott Pantel:
Okay. Here's an interesting question. My relationships in larger, strong well-known legal firms that have little or no experience in Regulation A+ have a strong bias against the Regulation A+ approach. Do you have a list of law firms who have good experience in supporting clients in these filings and I'm not laughing? Cause I think it's funny. I'm just, I think it's an interesting question. A great question.
Rod Turner:
Yeah. I actually, don't have a list there are so many you know, I have the, we have the ones that we work with, right. The list is rather long. If you would send me an email and you know, it'd be a bit better sense of what you need. I'll give you some names and you can reach out to them. My email is, well, hopefully, you can read it on my, on my video window here, but it's already, it's also in the chatbox, rod Turner at manhattanstreetcapital.com spelled the way it's
Scott Pantel:
Rod, a follow-on question. Can you talk a little bit or share some experience with companies who've raised capital in a Regulation A+ and have been successful, have had successful exits so that the Regulation A+ investors got a liquidity event?
Rod Turner:
Yes. So obviously these days it's changed a lot in terms of the better liquidity options with ATS is that we didn't have before. So this isn't a med-tech company, but there was a cycle of IPO's and Regulation A+ which came to help in funny 18, 20, beginning 2018 because one company cheated and that slowed things down to a standstill, it's now re picking back up. We have two or three clients doing Regulation A+ IPOs with us now. So, we're going to be reopening that channel if nobody else does. But in terms of liquidity like that, we were the offering platform involved with Arcimoto's Regulation A+ IPO. They raised 19 and a half million of which 15 and a half came from the underwriters’ syndicates. And 4 million came through our offering platform in Regulation A+. So, the marketing and offering process raised 4 billion in four weeks, which is actually a record. Nobody's done that in an IPO with a Regulation A+ yet, except for us that isn't a med-tech company though. And there aren't that many biotech or med-tech companies out there. It's, it's hard to know who we are, that those that we are talking with. Right. So, I don't have off the top of my head, other med-tech companies and the ones that we have. It's taken a while. I can't tell you how many biotech and MedTech companies I've had meetings with where we could have kicked and then they decided to do something else. And I don't think it was the best decision for them, forget us. So, it's been extremely frustrating, but that seems to be changing now. So I can't say that there's a bazillion of them. I don't actually know in order for us. We're the only company that takes the time to find out the extent of Regulation A+ raises by going to the ed to filings. It's a time-consuming process. We do that. We'll be doing it for the last year of 2020 soon. And we'll see then how many companies succeeded, but I don't know. I would say it's a hell of a lot less than it could have been.
Scott Pantel:
Okay. Rod, we're running up on time and I know we want to respect everyone's time, but could we do just a real quick hit on a couple more questions here before you make final conclusions. And again, I want to encourage everybody to schedule a call with Steven Brock. I put the Calendly link in the chat. We can go through a detailed assessment because I, I didn't want to miss questions quickie advertising, go ahead, go ahead, reg. A have to comply with FDA regulations. Again, something we can talk about in detail, but the high high-level response to that. Yes.
Rod Turner:
I mean, it has to edit, it has to support any regulator that's involved. So, I see a question about liability. The liabilities of raising funds are heavily impacted by well, how well the offering is prepared. You put risk factors in for everything and the investors have to click to observe that they've read the offering documents so far. There has been no legal activity that I'm aware of from investors or bad Regulation A+ offerings that isn't to say that it'll never happen. But so far it has not happened. It's a major focus of our efforts, both to stay clean with the regulators on, make sure we're not liable with the investors, no guarantees, but so far, it's been good.
Scott Pantel:
Scott, do you want to ask? Yeah. high-level comment. Can you provide high-level comments on SPAC for facts? We didn't touch on them.
Rod Turner:
Oh yeah. Right. So, but there's a question there. You have to have your headquarters for the entity raising money in the US or in Canada, can't be non-offshore. You can form an entity here as long as it has real people and it's to use Regulation A+. SPAC. So, the relevance of SPAC is there someone out there that wants to buy your company really? Right. That's really you, you're not really going to go out and suddenly do a stack of your own, although you could theoretically more likely the question is, can you find a company that would love to buy you? And there's a stack of SPACs out there that are funded, that are looking on our homepage. We have the SPAC finder/matchmaker service, which is currently free. Won't be free forever, but we're building momentum there. It's free. Just go and use it. It helps. And if you can find, you know, find a company that says, they're looking for what you do, approach them. Maybe they'll buy the company. Then that's the, to me, that's the real use of SPAC right now. You could do your own SPAC. We can do a SPAC with you, but if you do it in a Regulation A+ it's, it's actually an attractive option to pursue. You know, it's certainly not something it's different than a regular SPAC, the way you would do it. But you could do a SPAC given that you already have a business in the first place, that's the restriction. And then using Regulation A+ for a SPAC, you can't do it where nothing is done in the company yet only be buying stuff. You could do that in an S-1 format, in a Regulation A+ format. You have to have a business already. You guess what? Or you do otherwise you wouldn't be on the call.
Scott Pantel:
Does that answer the question on the spot? Sorry. Yeah. I'm sure that folks are dropping off as to as time requires, but for folks that do want to stick around. That's great. And thank you. And we'll continue going through the questions. There's a, there's another question regarding marketing spend. I don't know if you have any visibility to this that you can share, but what is the average marketing spend per $100? In general. Yeah, yeah,
Rod Turner:
Yeah. Average Christ. Yeah. I don't know that. I don't even have an average. We track everything, but I wouldn't say 8%. Okay. The thing you need to know is that whatever number it is, we are working to get it lower, right? Maybe not the advertising agency, but I am. And my people are challenging the agency to get it as low as it possibly can. And that's how he hits $3 and 70 cents on the 3.3% with that company, it was already working well, but that doesn't guarantee that it's going to be a low rate. Right. You know, that's a fact, that's a function of making sure we're doing the accompany that we should do with an offering. That's going to resonate. That's the front-end load. And then of course it's about excellence in marketing with the right people, which is what we do. Do you want to ask another couple of questions? I'm happy to answer them going
Scott Pantel:
Through the list here. I think out of respect for everyone's time, we should, we should wrap this up. If you have any final comments, rod, and any open questions that weren't answered, we'll go through them and we'll either address them directly if they're private nature or generally if they're public in nature, but any final comments, Rob, thank you so much for your time and expertise. And we're trying to bring this new vehicle to med-tech and health tech. And this is just a, this is a starting point. Any final comments for us?
Rod Turner:
Well, firstly, thanks, Scott. And thank you, Steven, for putting this on. I recommend that you get in touch with Steven who's email is in there. He's great at helping you get the company sorted and figure out the right way forward. And I'm happy to talk with you as well, of course, but I hope this has been helpful. I really do. That's what it's about. Right? And if you have follow-up questions, don't hesitate to ping us to ping me and I'll be happy to respond. If I get too many at once, I won't respond instantly because you know, I'm a finite resource, but we'll get back to you. I'll get back to you. I won't, I won't delegate it to somebody else. And you know, I love what you're doing. You're helping humankind. That's that, that just resonates deeply with me and with Scott and Steven, you know, you don't know us, but we're all we're over Ken. You know what I mean? We're good people. Scott's a great guy. Stephen is a great guy, you know, it's, it's, it's a good thing. You know what I mean? I love it when I'm working with humble people that that are good. And we have that here. Thank you very much. I'm mad. Stop man. Use Stephen. Thanks a lot. Thanks, everyone for being here. Thank you for listening to me all this time. I love to speak as you've gathered already and I wish I could see you in person, but I'm sure that'll happen maybe next year at the event. And I suppose we should wrap up eventually then. Hey yes. Thank you, guys. Thanks for the appreciation. Thank
Scott Pantel:
You everyone for your time. It's been great. Yeah. So
Rod Turner:
We'll shut down now and have a great day and much success. Thanks. Thanks, bye. Cheers.
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