REGULATION D - RULE 504:
Rule 504 of Regulation D provides an exemption from the registration requirements of the Federal Securities Laws for some companies when they offer and sell up to $5,000,000 of their securities in any 12-month period.
A company can use this exemption so long as it is not a blank check company and does not have to file reports under the Securities Exchange Act of 1934. Also, the exemption generally does not allow companies to solicit or advertise their securities to the public, and purchasers receive “restricted” securities, meaning that they may not sell the securities without registration or an applicable exemption.
Rule 504 does allow companies to solicit or advertise their securities to the public and to sell securities that are not restricted, if one of the following circumstances is met:
The company registers the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors;
A company registers and sells the offering in a state that requires registration and disclosure delivery and also sells in a state without those requirements, so long as the company delivers the disclosure documents required by the state where the company registered the offering to all purchasers (including those in the state that has no such requirements); or
The company sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as the company sells only to “accredited investors.”
Even if a company makes a private sale where there are no specific disclosure delivery requirements, a Private Placement Markets Regulation D - Rule 504 Offering Memorandum will provide sufficient information to investors to avoid violating the antifraud provisions of the securities laws. This means that the information your company provides to investors will be free from false or misleading statements (to the best of our knowledge).
While companies using the Rule 504 Exemption do not have to register their securities and usually do not have to file reports with the SEC, they must file what is known as a Form D after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s owners and stock promoters, but contains little other information about the company.
As an added service, Private Placement Markets will file all Form D's with the SEC for all Clients at no charge for the length of the Offering.
Bad Actor Disqualification
Rule 504 offerings are subject to the disqualification provisions found in Rule 506 of Regulation D. The “bad actor” disqualification provisions disqualify offerings from relying on Rule 504 if the issuer or other “covered persons” have experienced a disqualifying event, such as being convicted of, or sanctioned for, securities fraud or other violations of specified laws.
To Retain and Engage STEVE MUEHLER - SECURITIES for a Rule 504 Offering under Regulation D:
Since 2010, we have prepared hundreds (if not into the thousands) of Rule 504 Offerings, and have done so in nearly ever jurisdiction, for nearly all types of company structures, and all types of securities (from simple offerings of stock, to unit offerings, to structured finance offerings) and in every industry type.
Service(s) to be Provided:
Drafting & Preparation of a State & Federal Securities Laws Compliant Rule 504 Offering under Regulation D.
Our Custom Rule 504 under Regulation D Offering Preparation includes Offering Structuring, Development of a Presentation Grade Private Placement Memorandum ("PPM"), all SEC Filing(s) as required, State filing support (as required), State & Federal Securities Laws Compliance Review, and access to our Broker-Dealer Network & Institutional Investment Banking Network.
Registration of all Form D's with the United States Securities and Exchange Commission for the sale of all Securities by the Company.