Exempt Offerings Part 1

Dr. Henri Duvalier

504

REGULATION D

Regulation D 504

3. State Securities Laws: Companies must comply with the securities laws of the individual states where they are offering and selling the securities. Some states have additional requirements or limitations on Rule 504 offerings.

4. No Disqualification: Companies and certain individuals associated with the company (such as officers, directors, and significant shareholders) must not be disqualified from relying on Rule 504 due to certain securities law violations.

5. Transfer Restrictions: Securities issued under Rule 504 are typically restricted from resale for a period of time to prevent immediate trading on secondary markets.

It's important to note that while Rule 504 provides an exemption from federal registration, companies must still be aware of and comply with state securities laws, which can vary widely. Additionally, they should consider the potential for future fundraising rounds and how Rule 504 may affect their ability to raise capital under other exemptions in the future.

Companies seeking to use Rule 504 should consult with legal counsel and consider the specific circumstances and requirements applicable to their fundraising efforts to ensure compliance with both federal and state securities laws.