Rule 506(c) of Regulation D

Updated: Sep 27, 2020

The securities we are offering with our investment fund are 506(c) Regulation D Private investment offerings.

Here is what the SEC says about Regulation D, section 506(c) to give you a brief overview:

Rule 506 of Regulation D

Rule 506 of Regulation D provides two distinct exemptions from registration for companies when they offer and sell securities. Companies relying on the Rule 506 exemptions can raise an unlimited amount of money.

Under Rule 506(c), a company can broadly solicit and generally advertise the offering and still be deemed to be in compliance with the exemption’s requirements if:

The investors in the offering are all accredited investors; and The company takes reasonable steps to verify that the investors are accredited investors, which could include reviewing documentation, such as W-2s, tax returns, bank and brokerage statements, credit reports and the like.

Purchasers of securities offered pursuant to Rule 506 receive "restricted" securities, meaning that the securities cannot be sold for at least six months or a year without registering them.

Companies that comply with the requirements of Rule 506(b) or (c) do not have to register their offering of securities with the SEC, but they must file what is known as a "Form D" electronically with the SEC after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s promoters, executive officers and directors, and some details about the offering, but contains little other information about the company.  You can access the SEC’s EDGAR database to determine whether the company has filed a Form D.

Be sure to ask whether your state regulator has received notice of the offering for sale in your state.

For further education and research you can click below to visit the SEC website:

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