FAQ's About Exempt Offerings

All securities transactions, even exempt transactions, are subject to the antifraud provisions of the federal securities laws. This means that you and your company will be responsible for false or misleading statements that you or others on your behalf make regarding your company, the securities offered, or the offering. You and your company are responsible for any such statements, whether made by your company or on behalf of the company, and regardless of whether they are made orally or in writing.
  • A bank, insurance company, registered investment company, business development company, or small business investment company;
  • An employee benefit plan (within the meaning of the Employee Retirement Income Security Act) if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
  • A tax exempt charitable organization, corporation or partnership with assets in excess of $5 million;
  • A director, executive officer, or general partner of the company selling the securities;
  • An enterprise in which all the equity owners are accredited investors;
  • An individual with a net worth of at least $1 million, not including the value of his or her primary residence;
  • An individual with income exceeding $200,000 in each of the two most recent calendar years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or,
  • A trust with assets of at least $5 million, not formed only to acquire the securities offered, and whose purchases are directed by a person who meets the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment.

While the SEC regulates and enforces the federal securities laws, each state has its own securities regulator who enforces what are known as “blue sky” laws. If a company is selling securities, it must comply with both federal regulations and state securities laws and regulations in the states where securities are offered and sold (typically, the states where offerees and investors are based).

For the offerings that are potentially subject to state registration or qualification, each state’s securities laws have their own separate registration requirements and exemptions to registration requirements. Even if the offering is not subject to state registration or qualification, there may still be state notice filing requirements and fees.

“Restricted Securities” are previously-issued securities held by security holders that are not freely tradable. Securities Act Rule 144(a)(3) identifies what offerings produce restricted securities. After such a transaction, the security holders can only resell the securities into the market by using an effective registration statement under the Securities Act or a valid exemption from registration for the resale, such as Rule 144.

Rule 144 is a “safe harbor” under Section 4(a)(1) providing objective standards that a security holder can rely on to meet the requirements of that exemption. Rule 144 permits the resale of restricted securities if a number of conditions are met, including holding the securities for six months or one year, depending on whether the issuer has been filing reports under the Exchange Act. Rule 144 may limit the amount of securities that can be sold at one time and may restrict the manner of sale, depending on whether the security holder is an affiliate. An affiliate of a company is a person that, directly, or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the company.

An investor that is not affiliated with the issuer and wishes to sell securities that are not restricted must either register the transaction or have an exemption for the transaction. An exemption commonly relied upon for the resale of the securities is Section 4(a)(1) of the Securities Act which is available to any person other than an issuer, underwriter or dealer. Please be aware that several exemptions, including the exemptions under Regulation D, are only available for offers and sales by an issuer of securities to initial purchasers and are not available to any affiliate of the issuer or to any person for resales of the securities.

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  • Aenean lacinia bibendum nulla sed consectetur.
  • Cras justo odio, dapibus ac facilisis in, egestas eget quam.

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Sed cursus ante dapibus diam. Sed nisi. Nulla quis sem at nibh elementum imperdiet. Duis sagittis ipsum. Praesent mauris. Fusce nec tellus sed augue semper porta. Mauris massa. Vestibulum lacinia arcu eget nulla. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Morbi lectus risus, iaculis vel, suscipit quis luctus

  • Cras justo odio, dapibus ac facilisis in, egestas eget quam.
  • Etiam porta sem malesuada magna mollis euismod.
  • Aenean lacinia bibendum nulla sed consectetur.
  • Cras justo odio, dapibus ac facilisis in, egestas eget quam.

Nunc feugiat mi a tellus consequat imperdiet. Vestibulum sapien. Proin quam. Etiam ultrices. Suspendisse in justo eu magna luctus suscipit. Sed lectus. Integer euismod lacus luctus magna.

Sed cursus ante dapibus diam. Sed nisi. Nulla quis sem at nibh elementum imperdiet. Duis sagittis ipsum. Praesent mauris. Fusce nec tellus sed augue semper porta. Mauris massa. Vestibulum lacinia arcu eget nulla. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Morbi lectus risus, iaculis vel, suscipit quis luctus

  • Cras justo odio, dapibus ac facilisis in, egestas eget quam.
  • Etiam porta sem malesuada magna mollis euismod.
  • Aenean lacinia bibendum nulla sed consectetur.
  • Cras justo odio, dapibus ac facilisis in, egestas eget quam.

Nunc feugiat mi a tellus consequat imperdiet. Vestibulum sapien. Proin quam. Etiam ultrices. Suspendisse in justo eu magna luctus suscipit. Sed lectus. Integer euismod lacus luctus magna.