Regency Stamps, Ltd.
Regency Stamps conducts public auctions and online auctions of stamps
and items of postage history. The company had been founded by an avid
stamp collector in 1984 as a computer software business. Its sales
effort shifted in 1992 to focus on the sale of stamps through auctions
and the Internet.
By 1999, Regency Stamps had about 6,000 active customers, defined as
collectors who were bidding in auctions at least once a year. It needed
about $1 million to grow more rapidly, especially by being able to
acquire a much larger inventory of stamps for resale.
The offering was 200,000 shares at $5.00 each, with a minimum purchase
of 100 shares. With so few active customers, there needed to be some
major investors to lead the way. The prospectus cover announced:
Regency’s Directors have collectively agreed to buy a minimum of
shares at the initial offering price of $5 per share for a total of
|This commitment also meant that there was
no escrow required of monies received in the offering. Regency filed for
public offerings in its home state of Missouri and in California.
Approvals in those states would generally have been conditioned upon all
the share sales proceeds going into a bank escrow account until a
minimum amount had been sold in the offering. With the $260,000 promised
investments, Regency was able to receive and use the funds from the very
The founder passed the required test for an issuer agent and was
licensed to perform the selling functions permitted by Rule 3a4-1 under
the federal Securities Exchange Act of 1934. In addition to Missouri and
California, Regency filed for a public offering in New York and met the
exemption standards for other states. A total of $919,250 was sold in