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The Alternatives to Registration Chart has been created to fit on 11x17 inch paper,
duplex printed, set-up to open to the left and on the short side. The Chart and Notes
have been prepared so the introductory notes section prints on the back of the Chart.
When the Chart is folded in half, the Notes will be the front cover of an 8.5x11 inch
booklet and the crease will be the left hand margin and the binding of the booklet.
When the front cover is opened, the Chart is on the inside and will fold out to an 11x17
inch single page.
We usually print the Chart on a high-speed, multi-functional device (MFD) that we
access from the firms network. The MFD device is loaded with several different types
of paper, including 11x17 inch paper.
The MFD printing options are controlled from individual users PCs. When a user
initiates the print command, the printer properties dialogue box appears on the users
PC. The user may select/change various properties, including paper size (11x17 inches),
page orientation (landscape), duplex printing (or print on both sides) and duplex
opening to the left (or flip on short side). If individual users are not able to modify or
select these printing options, your printer may lack the appropriate features or you may
need to have your support staff make these printing options functional on your printer. If
you are unfamiliar with the capabilities of an MFD or other printer and have questions,
please contact your appropriate support staff for assistance.
We recommend using an MFD for printing because smaller convenience printers
typically do not have 11x17 inch paper stored in them and may not have the features
necessary to print the Chart properly. Most convenience printers support duplex (or
double-side printing). Typically, users will be required to hand feed the 11x17 page
twice printing on one side of the page on each pass to get the desired duplex outcome.
Feeding the paper improperly on the second pass can result in a booklet with upside
down pages. This is the result of operator error that is remedied by changing the
orientation of the paper for the second pass.
We hope these tips make the printing of the Chart easier for all.
Last updated: April 2015
Nature of Issuer
Dollar Limit
Rule 506(b)
Regulation D
____
Tier 1
_____
Tier 2
Section
3(a)(11)
____
Rule 147
Rule 701
Filing Requirement
Restriction on Resale
Blue Sky
Other Factors
None.
No limitation.
No general solicitation.
No requirements.
No requirements.
No general solicitation.
None.
Rule 506(b)
No general solicitation.
Rule 505
No purchaser qualifications. 35 nonaccredited investors, unlimited accredited
investors.1
Rule 506(c)
General solicitation permitted if all
purchasers are accredited investors
and issuer takes reasonable steps to
verify their status as such.2
Rule 506(c)
Regulation D
Regulation A
Information Required
None.
Section 4(a)(5)
Rule 505
Regulation D
Section 4(a)(2)
Rule 504
Regulation D
Manner of Offering
Tier 1: $20,000,000
Tier 2: $50,000,000 within
prior 12 months, but no more
than 6,000,000 (Tier 1),
$15,000,000 (Tier 2) by
affiliate selling security
holders, subject to aggregate
30% offering price cap for all
selling security holders in
initial Reg. A offering and
any Reg. A offering within 12
months.
None.
Section 3(a)(11)
No limitation other than to maintain
intrastate character of offering which
includes resales.
Section 3(a)(11)
Interpreted to mean substantial
operations in state and
proceeds used for intrastate
purposes
Rule 506(b)
35 non-accredited investors, each of which
must be sophisticated alone or with
purchaser representatives. Unlimited
accredited investors.
Rule 506(c)
Non-accredited investors not permitted;
unlimited accredited investors.
Rule 147
No limitation other than to maintain
intrastate character of offering.
No requirements.
None.
None.
Section 3(a)(11)
Residence interpreted as domicile.
Rule 147
Residence is principal office of business or
principal residence of individuals.
Rule 147
Means 80% of gross revenues
and assets, net proceeds used
and principal office all in state.
Not available to 1934 Act
reporting companies or
investment companies. (Form
S-8 available to reporting
companies.).
Accredited investors" include certain institutions; directors, executive officers and general partners of the issuer; natural persons who with spouse meet $1,000,000 net worth (excluding value of primary residence, net of debt secured by the residence up to the value of the residence) or meet $200,000 income test alone or $300,000 income test with spouse; and entities with
over $5,000,000 total assets or owned solely by accredited investors. For the net worth test, an investors net worth must be decreased by the amount of any debt secured by the principal residence incurred within 60 days prior to the date on which the investment is made, unless the debt was incurred in the acquisition of the residence (in which case the amount of the debt
not in excess of the fair value of the residence does not decrease the investors net worth).
2
Non-exclusive verification safe harbors for natural persons: If based on income, review IRS forms and obtain certification on current year expectations; if based on net worth, review both (i) third-party statements as to assets and (ii) credit report and written representations that all liabilities are disclosed; third-party certification from specified regulated professionals; and for
existing investors who invested under Rule 506 before the effective date of Rule 506(c), an investor certification.
Stanley Keller
Locke Lord LLP
Richard M. Leisner
Trenam Kemker, P.A.
Preliminary Notes
The chart that follows is intended for use as a tool to aid business lawyers generally familiar with federal and state securities laws
in making threshold analyses and decisions concerning various alternatives to federal securities registration for capital formation
and equity compensation awards. It should be used with the following limitations and assumptions in mind:
1.
Descriptions of various federal and state securities requirements are of necessity summaries and must not be relied upon as
complete and accurate statements of all the conditions required to comply with applicable law. Practitioners should consult
the actual laws, regulations and forms to refine threshold analyses made with the assistance of the chart.
2.
All securities transactions are subject to various antifraud rules that generally operate to prohibit persons engaged in the
offer and sale of securities from making materially misleading statements or omissions or engaging in conduct that tends to
work a fraud on purchasers or sellers of securities. A securities transaction may comply with applicable registration
exemptions or registration requirements and nevertheless still violate one or more antifraud rules.
3.
The chart does not address compliance with the specific requirements of applicable state securities registration or exemption
provisions. Compliance with individual state securities law can be assured only by reference to the specific state statutes
and rules that apply to a particular transaction and such compliance may require pre-offer or pre-sale state filings, payment
of fees and filing of offering materials. The capital formation alternatives described in the chart relate principally to federal
securities registration exemptions. For comparison purposes, information is provided with respect to certain provisions of the
Uniform Securities Act, both the 1956 version (USA 1956) and comparable provisions of the 2002 version (USA 2002), and
certain statements or policy positions of the North American Securities Administrators Association (NASAA). The National
Securities Markets Improvement Act of 1996 made substantive state blue sky registration requirements generally
inapplicable to covered securities, which include national securities exchange and Nasdaq Capital Market listed securities
and securities exempt under Rule 506.
4.
The chart does not address federal or state regulatory requirements applicable to persons engaged in the business of
effecting purchases and sales of securities. These persons may be required to register federally and in various states as
securities broker-dealers or agents. In some cases, the involvement of an unregistered person in the purchase and sales
process may jeopardize the availability of a securities registration exemption. In others, a transaction that otherwise
complies with the securities registration or exemption requirements of applicable federal and state law may nevertheless fail
to comply with federal or state law governing the conduct of persons involved in the purchase and sales process. This
failure may give rise to its own violation of law.
5.
The chart is not intended to cover all securities registration alternatives and exemptions. The alternatives are intended
primarily for capital formation activities by start-up and growing non-public companies. Accordingly, for example, the
securities registration exemptions provided by Section 3(a)(2), Section 3(a)(9) and Section 3(a)(10) of the Securities Act of
1933 are not covered in the chart because these exemptions are not generally used in the foregoing capital formation
activities. For simplicity, (i) the chart also does not cover exemptions provided for Rule 144A transactions or Regulation S
offshore offerings and (ii) references to general solicitation include both general solicitation and general advertising.
6.
The chart does not include registration alternatives to full Form S-1 registration, such as Form S-3 available to smaller public
companies, subject to certain limitations. Moreover, the chart does not reflect the provisions of the Jumpstart Our Business
Startups Act (JOBS Act) that, among other things, afford certain smaller companies known as Emerging Growth
Companies reduced disclosures in registered public offerings and public company reporting for up to 5 years.
7.
Except where specifically noted, the chart does not address alternatives for resales. References to securities being "freely
resalable" relate only to the restrictions imposed by the specific offering alternative. Other limitations may affect resales,
such as those applicable to resales by affiliates or statutory underwriters and those imposed by state securities laws.
8.
The chart reflects the law in effect on April 22, 2015, giving effect to the amendments to Regulation A adopted by the SEC
on March 25, 2015 and effective on June 19, 2015 and revisions of Regulation D adopted by the SEC in 2013. It does not
reflect the additional changes to Regulation D proposed by the SEC at that time or the new exemption contemplated by the
JOBS Act for crowdfunding transactions for up to $1 million in any 12-month period (and permitting general solicitation) for
which the SEC proposed rules on October 23, 2013. In addition, the chart does not reflect state crowdfunding exemptions
adopted or proposed by a number of states.