Exempt Offerings  JOBS Act Solutions

advising on exempt offerings to find investors.  


Regulation S Restrictions Calibrated to the Level of Risk

Posted on March 12, 2019 at 10:30 PM Comments comments (0)

Under Rule 903 additional restrictions are calibrated to the level of risk that the Regulation S securities will flow back into the United States.

Rule 903 sets forth three categories of transactions.

Transactions by Category Category 1 transactions include offerings of securities by foreign issuers or, in the case of non-convertible debt securities, a U.S. issuer, in an “overseas directed offering.” There is no Category 1 distribution compliance period during which time the securities may not be resold.

Category 2 transactions include offerings of equity securities of a reporting foreign issuer; debt securities of a reporting U.S. or foreign issuer; and debt securities of a non-reporting foreign issuer. The Category 2 safe harbor is available even if there is a substantial U.S. market interest in the securities. Exempt category 2 debt securities include non-participating preferred stock and asset-backed securities.

Category 3 applies to all transactions not eligible for the Category 1 or Category 2 safe harbors. Category 3 transactions include debt or equity offerings by non-reporting U.S. issuers; equity offerings by U.S. reporting issuers; and equity offerings by non-reporting foreign issuers for which there is a substantial U.S. market interest. 

Why a business plan is not enough

Posted on March 21, 2018 at 1:10 AM Comments comments (0)

Many companies rely on a business plan or executive summary to serve as the basis for their investment. This does not provide the basis for compliance with state and Federal rules and any capital raised may be in violation of state or Federal rules.

Regulation D is an exemption that allows companies to raise capital though the sale of equity or debt securities without registering with the SEC. Start-ups typically choose the Rule 506(c program because it allows general advertising and solicitation. Companies can now execute a “public offering” of their private placements with straightforward compliance benefits of a traditional Regulation D offering.

The 506(c program allows a client to execute a public offering of securities while retaining the benefits of a Regulation D exempt private placement.

The 506(c exemption allows an issuer to engage in general advertising and solicitation of accredited investors for the securities offering. It is important to note that the current 506(b program is still available for issuers that do not need the capability to engage in general solicitation. The 506(c program allows a client to execute a public offering of securities while retaining the benefits of a Regulation D exempt private placement.

Unregistered Real Estate Exempt Offerings

Posted on May 13, 2017 at 12:50 AM Comments comments (0)


Unregistered Real Estate Exempt Offerings


Using our template for a general partnership with a specific purpose you do not need to pay and wait for Regulation D exemptions. Private Placement Advisors LLC employs a general partnership vehicle to avoid almost all review by regulators. With no limited partnership or other passive interest created, no security is formed. This particular template is designed for real estate lenders and borrowers. To learn more about the advantages of unregistered, non-exempt private placements, contact [email protected]

Crowdfunding Intermediaries

Posted on March 22, 2017 at 1:55 AM Comments comments (0)

A crowdfunding intermediary must register with the Securities and Exchange Commission (SEC) as a broker or as a funding portal and become a member of a national securities association (FINRA). The following crowdfunding intermediaries are registered with the SEC as funding portals and are funding portal members of FINRA.


Crowdboarders LLC

SEC File No.: 7-11

Other Name(s):

Website URL(s): https://crowdboarders.com

11625 Custer Road, Suite 110

Frisco, TX 75035


SEC File No.: 7-27

Other Name(s):

Website URL(s):

3753 North Pine Grove Ave., # 2

Chicago, IL 60613

DreamFunded Marketplace, LLC

SEC File No.: 7-37

Other Name(s):

Website URL(s): https://www.dreamfunded.com

425 Market Street, 22nd Floor, Suite 30

San Francisco, CA 94108

EquityBender LLC

SEC File No.: 7-92

Other Name(s): www.equitybender.com

Website URL(s):

12 Skysail Drive

Corona Del Mar, CA 92625

First Democracy VC

SEC File No.: 7-76

Other Name(s):

Website URL(s): https://microventures.com

2905 San Gabriel Street, Suite 212

Austin, TX 78705

FlashFunders Funding Portal, LLC

SEC File No.: 7-9

Other Name(s):

Website URL(s): https://www.flashfunders.com

15260 Ventura Boulevard, 20TH FLOOR

Sherman Oaks, CA 91403

Funding Wonder Crowd, LLC

SEC File No.: 7-70

Other Name(s):

Website URL(s): https://fundingwonder.com/

175 SW 7th Street, Suite 1800

Miami, FL 33127

Fundpaas Inc

SEC File No.: 7-65

Other Name(s): FundpaaS, Inc. d/b/a Custvestor

Website URL(s): http://www.custvestor.com/

101 California Street, Ste 2710

San Francisco, CA 94111

Gridshare LLC

SEC File No.: 7-18

Other Name(s):

Website URL(s): http://gridshare.com/

2607 NE 13TH Avenue

Portland, OR 97212

GrowthFountain Capital, LLC

SEC File No.: 7-28

Other Name(s):

Website URL(s): www.growthfountain.com

75 Chambers Street, 6th Floor

New York, NY 10007

Indie Crowd Funder, LLC.

SEC File No.: 7-10

Other Name(s): IndieCrowdFunder.Com

Website URL(s): http://www.indiecrowdfunder.com

1901 Avenue Of The Stars, 2nd Floor

Los Angeles, CA 90067

Jumpstart Micro, Inc

SEC File No.: 7-8

Other Name(s):

Website URL(s): http://www.jumpstartmicro.com

101 Great Road

Bedford, MA 01730

Ksdaq Inc.

SEC File No.: 7-42

Other Name(s): Mr. Crowd

Website URL(s): https://www.MrCrowd.com

1046 West Kinzie Street, Suite 300 - #372

Chicago, IL 60642

MinnowCFunding LLC

SEC File No.: 7-20

Other Name(s):

Website URL(s): http://minnowcfunding.com

3550 Wilshire Blvd., #1926

Los Angeles, CA 90010

Neighbor Capital

SEC File No.: 7-36

Other Name(s):

Website URL(s): http://neighborcapital.org/

4622 3rd St.

San Francisco, CA 94124

NetCapital Funding Portal Inc.

SEC File No.: 7-35

Other Name(s):

Website URL(s): https://netcapital.com/

430 North Street

White Plains, NY 10605

NextSeed US LLC

SEC File No.: 7-23

Other Name(s):

Website URL(s): https://www.nextseed.com/

4101 Greenbriar DR, Suite #122K

Houston, TX 77098

NSSC Funding Portal, LLC

SEC File No.: 7-12

Other Name(s): Small Change

Website URL(s): https://smallchange.com/

945 Liberty Avenue, Unit 605

Pittsburgh, PA 15222

OpenDeal Inc.

SEC File No.: 7-46

Other Name(s): Republic

Website URL(s): www.republic.co

524 Broadway

New York, NY 10012

Razitall, Inc.

SEC File No.: 7-26

Other Name(s):

Website URL(s): https://www.razitall.com/

411 King George Rd, SUITE 101, #325

Basking Ridge, NJ 07920

SI Portal, LLC

SEC File No.: 7-29

Other Name(s):

Website URL(s): https://www.seedinvest.com

222 Broadway, 19th Floor

New York, NY 10038

Sprowtt CrowdFunding, Inc.

SEC File No.: 7-44

Other Name(s):

Website URL(s): https://www.sprowttcf.com/

500 E. Kennedy Blvd., Suite 3003

Tampa, FL 33602

StartEngine Capital LLC

SEC File No.: 7-7

Other Name(s): StartEngine

Website URL(s): https://www.startengine.com/

925 North La Brea Ave

Los Angeles, CA 90038

Trucrowd INC

SEC File No.: 7-15


Website URL(s): http://www.us.trucrowd.com/https://fundanna.com/

318 W Adams St, STE 1121

Chicago, IL 60606

Wefunder Portal LLC

SEC File No.: 7-33

Other Name(s): Wefunder

Website URL(s): https://www.Wefunder.com

1 Broadway, 14th Floor

Cambridge, MA 02142

Reg A versus Reg D

Posted on February 25, 2017 at 7:05 PM Comments comments (0)

Will Regulation A+ be a more popular choice for smaller companies than Regulation D?

Rule 506 of Regulation D is the most widely used capital raising exemptions under the US securities laws, largely due to its flexibility. Regulation A+ provides a new way for smaller companies to raise capital and get some liquidity in their securities. However, if a company is confident that it can raise money through the traditional Rule 506 private placement, it may still want to avoid the SEC review process, the hassle of Blue Sky compliance under Tier 1, and the ongoing reporting obligations of Tier 2. The new Regulation A, commonly referred to as Regulation A+, is a significant improvement over the old Regulation A, which was rarely used in any event.

The old Regulation A permitted exempt offerings up to $5 million in any 12-month period, including up to $1.5 million of securities offered by security holders of the company, while the thresholds of Regulation A+ are much higher. There are two tiers for Regulation A+: Tier 1, for offerings up to $20 million in a 12-month period, with not more than $6 million in offers by selling security-holders that are affiliates of the issuer; and Tier 2, for offerings up to $50 million in a 12-month period, with not more than $15 million in offers by selling security-holders that are affiliates of the issuer.

Although Rule 506 does not provide an opportunity for selling security holders to participate in the offering, it does not have any caps on the amounts that can be raised, and, while any company, public or private, US or foreign, can raise capital under Rule 506, under Regulation A+ only a US or Canadian issuer that is: a) not a reporting company under the Securities Exchange Act of 1934, b) not an investment company, and c) not a blank check company is considered an “eligible issuer.” Still, in some instances, Regulation A+ appears to be more accommodating than Rule 506.

For example, while Rule 506(b allows an unlimited number of accredited investors, it allows only 35 non-accredited investors. However, Tier 1 of Regulation A+ does not have any limitation on the number or type of investors, but Tier 2 imposes a per-investor cap for non-accredited investors of the aggregate purchase price to be paid by the purchaser for the securities to be no more than 10% of the greater of annual income or net worth for individual investors or revenue or net assets most recently completed fiscal year for entities.

In addition, Regulation A+ allows issuers to “test-the-waters” by trying to determine whether there is any interest in a contemplated securities offering (assuming such practice is allowed under applicable Blue Sky laws for Tier 1 offerings), Rule 506(b does not allow for general solicitation and advertising, though of course Rule 506(c does.

The biggest downside of Regulation A+ is that Blue Sky registration requirements are not preempted for Tier 1 offerings, which significantly limits offerings in multiple states, while such preemption does exist for Rule 506 offerings (as well as Tier 2 of Regulation A+ offerings.) But note that the welcomed flexibility of doing nationwide offerings under Tier 2 comes with a heavy price tag of ongoing reporting. After a Tier 2 offering, an issuer must file with the SEC annual reports on Form 1-K, semi-annual reports on Form 1-SA and current reports on Form 1-U (within 4 business days of the event). Interestingly, the SEC has observed that companies may “voluntarily” file quarterly financial statements on Form 1-U, but the practical effect of desired compliance with Rules 15c2-11 and Rule 144 to maintain placement of quotes by market makers and re-sales of securities, will lead to “voluntary” quarterly reporting becoming essentially mandatory.

Rule 506 offerings are accompanied by private placement memoranda or PPMs, (even when offerings are solely to accredited investors) to protect issuers from Rule 10b-5 liability under the Exchange Act.. Still, there is no prescribed format for such PPMs and they are not reviewed by the SEC. With Regulation A+ offerings, an issuer must file Form 1-A (a “mini” registration statement) through EDGAR with the SEC. First-time issuers are eligible to initially do a non-public submission of a draft of Form 1-A. Such Forms 1-A are subject to the SEC review and comment process, which increases the cost of the transaction and extends the time from the beginning of the transaction and the closing.

Private Placement Advisors LLC


FREE Audio Handbooks on the JOBS Act and Exempt Offerings

Posted on February 23, 2017 at 7:55 PM Comments comments (0)

We are giving away any 3 of our 15 audio handbooks in exchange for reviews. All we ask is that you give the narration a 1 thru 5 star rating that is fair at Audible.com.


Choose any 3 of the audio handbooks below. Send an email to [email protected] and tell us your selections. We will email you the promotion codes and instructions on how to use them.


1) Crowdfunding on Steroids



2) Regulation Crowdfunding



3) How to Finance a Marijuana Business

http://www.audible.com/pd/Business/How-to-Finance-a-Marijuana-Business-Audiobook/B01N5JX7XR/ref=a_search_c4_1_6_srTtl?qid =1487627591&sr=1-6


4) Medical Marijuana Delivery Handbook



5) Hedge Funds for the Rest of Us




6) Crowdfunding Law



7) Business Brokers and Securities Laws



8) California Real Estate Exempt Offerings



9) California Real Estate Blind Pools



10) Crowdfinancing



11) Exempt Offerings

http://www.audible.com/pd/Business/Exempt-Offerings-Crowdfunding-and-BeyondAudiobook/B0170TCDG2/ref=a_search_c4_1_3_srImg?qid=1487560090&sr=1- 3


12) Securitized Real Estate and 1031 Exchanges



13) Guide to the JOBS Act



14) Marijuana Money



15) Health, Wellness & Cannabis: A Cookbook



Choose any 3 of the above audio handbooks. Just tell us what you want at [email protected] We will email you the promotion codes to listen to the 3 titles. This offer is limited to the first 25 requests for each handbook.


To purchase audio handbooks on the JOBS Act and exempt offerings go to



About the author:


Douglas Slain specializes in crowd financing under the JOBS Act. He helps small businesses identify and solicit sources of private equity. He also manages a LinkedIn discussion group, State Securities Regulation, with almost 1600 members. After getting a JD from Stanford Law School, Doug practiced law in San Francisco and founded four national appellate law-reporting services now owned and operated by Thomson-Reuters.


Connect with Douglas Slain:


LinkedIn: http://linkedin.com/in/douglasslain

Facebook: http://facebook.com/douglas.slain

Twitter: https://twitter.com/exemptofferings

Blog: http://www.privateplacementadvisors.com/apps/blog

Web site: http://privateplacementadvisors.com



Secondary Market

Posted on December 9, 2016 at 5:20 PM Comments comments (0)

Secondary Market in Exempt Offerings

The exempt offering secondary market, largely governed by Rule 144A, is growing rapidly.

What is Rule 144A?

The following transactions are conducted under Rule 144A: a) offerings of debt or preferred securities by public companies; b) offerings by foreign issuers that do not want to become subject to U.S. reporting requirements; and c) offerings of common securities by non-reporting issuers (i.e., “backdoor IPOs”). An issuer who intends to engage in multiple offerings often has a “Rule 144A program.” Rule 144A programs are established to offer debt securities on an ongoing basis. They are similar to “medium-term note programs,” but they are unregistered and can be designed for sales to QIBs.

Among the advantages of using Rule 144A programs are (1) no public disclosure of innovative structures or otherwise sensitive information; (2) fewer FINRA filing requirements; and (3) reduced liability exposure under the Securities Act. Rule 144A is a non-exclusive safe harbor. A reseller may rely upon any applicable exemption from the registration requirements of the Securities Act in connection with the re-sale of restricted securities. In addition, Rule 144A offerings often are made side-by-side with a Regulation S offering (targeted at foreign investors). This permits an issuer to do a multinational offering with a QIB tranche and a Regulation S tranche, and to sell to an initial purchaser outside the United States in reliance on Regulation S, even though the purchaser anticipates and intends immediate resale to QIBs, in reliance on Rule 144A. Rule 144A provides that re-offers and re-sales of exempt offerings or private placements in compliance with the rule are not “distributions” and that the re-seller is therefore not an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.

A re-seller who is not the issuer, an underwriter, or a dealer can rely on the exemption provided by Section 4(1) of the Securities Act. Re-sellers that are dealers can rely on the exemption provided by Section 4(3) of the Securities Act of 1933. Issuers must find another exemption for the offer and sale of unregistered securities. Typically they rely on Section 4(2), in reliance on Regulation, or on Regulation S. Affiliates of the issuer may rely on Rule 144A. Re-sellers not eligible for the safe harbor under Rule 144A need to rely on the Section 4(1½) exemption. What is a Section 4(1/2) exemption? If an accredited investor cannot qualify as a “QIB” under Rule 144A, it will seek to use the Section 4(1½) exemption for secondary sales. A Section 4(1½) exemption is a case law-derived exemption that allows private placement re-sales of private placement offerings. Re-sellers rely on Section 4(1), which provides an exemption for non-issuers, underwriters, and dealers, to avoid underwriter status by implementing restrictions that would be required in the case of a Section 4(2) offering by the issuer itself. The Section 4(1½) exemption typically applies to the resale of restricted securities to accredited investors who make appropriate representations. Section 4(1½) also is sometimes used to extend a Rule 144A offering to institutional accredited investors.

The Second Circuit has opined that a person purchasing restricted securities from an issuer is not an underwriter for purposes of Section 4(1) if the purchaser resells the restricted securities to persons who qualify as purchasers under Section 4(2) as described by the U.S. Supreme Court in SEC v. Ralston Purina Co., 346 U.S. 119 (1953), and who acquire the restricted securities in a private offering of the type contemplated by Section 4(2). Securities acquired in a Rule 144A transaction are deemed to be “restricted securities” within the meaning of Rule 144(a)(3) and remain restricted until the applicable holding period expires, and may only be publicly resold under Rule 144 pursuant to an effective registration statement or in reliance on another exemption. After a one- year holding period, re-sales of these securities by non- affiliates are not subject to any other conditions under Rule 144. For a reporting issuer, compliance with the adequate current public information condition requires the issuer to have filed all required reports under Section 13 or Section 15(d) of the Exchange Act.

For a non-reporting issuer, compliance with the adequate current public information condition requires the public availability of basic information about the issuer, including certain disclosure documents and financial statements. For affiliate holders of restricted securities, Rule 144 provides a safe harbor permitting re-sales of restricted securities, subject to the same six-month and one-year holding periods for non-affiliates and to other resale conditions of amended Rule 144. Other resale conditions include: (a) adequate current public information about the issuer, (b) volume limitations, (c) manner of sale requirements for equity securities, and (d) notice filings on Form 144.

What is a “QIB”?

A QIB is any entity included within one of the categories of “accredited investor” defined in Rule 501 of Regulation D, acting for its own account or the accounts of other QIBs, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers not affiliated with the entity ($10 million for a broker-dealer). In addition to the qualifications above, banks and savings and loan associations must have a net worth of at least $25 million to be deemed QIBs. QIBs can be foreign or domestic entities, but must be institutions. Individuals cannot be QIBs, no matter how wealthy or sophisticated.

A broker-dealer acting as a risk-less principal for an identified QIB will itself be deemed a QIB. Eligible purchasers under Rule 144A can be entities formed solely for the purpose of acquiring restricted securities if they satisfy the qualifying QIB tests. A reseller of restricted securities can rely on information other than that enumerated in Rule 144A for its belief that the prospective purchaser is a QIB. The bases for reliance enumerated in Rule 144A are non-exclusive; resellers may have reasonable belief of eligibility based on any number of factors.

A reseller cannot rely on certifications that it knows, or is reckless in not knowing, are false. However, a seller has no duty of verification. In other words, unless the circumstances give a re-seller reason to question the veracity of the information relied on, the reseller does not have a duty to verify the information. The seller must make the purchaser aware that it is acquiring restricted securities and that he securities may only be re-sold pursuant to an exemption from or registration under the Securities Act.

The investor is entitled to know that the securities may be subject to reduced liquidity. Usually the warning is given by placing a legend on the security itself. For example, the note or stock certificate representing securities re-sold under Rule 144A must include a legend (or a notation if using electronic record keeping) stating that the securities have not been registered and, therefore, they may not be re-sold or otherwise disposed of in the absence of such registration or unless such transaction is exempt from, or not subject to, registration.

In addition, the PPM or other offering memorandum used in connection with the Rule 144A offering must include an appropriate notice to investors, such as the following: “Each purchaser of the securities will be deemed to have represented and agreed that it is acquiring the securities for its own account or for an account with respect to which it exercises sole investment discretion, and that it or such account is a QIB and is aware that the sale is being made to it in reliance on Rule 144A.” The offering documents must inform the purchaser that the securities to be acquired can only be re-offered and re-sold pursuant to an exemption from, or registration under, the Securities Act, and that the resold securities have a restricted CUSIP number.

Securities offered under Rule 144A must not be “fungible” with, or substantially identical to, a class of securities listed on a national securities exchange or quoted in an automated inter-dealer quotation system (“listed securities”). Common stock is deemed to be of the “same class” if it is of substantially similar character and the holders enjoy substantially similar rights and privileges. American Depository Receipts (“ADRs”) are considered to be of the same class as the underlying equity security. Preferred stock is deemed to be of the same class if its terms relating to dividend rate, liquidation preference, voting rights, convertibility, call, redemption, and other similar material matters are substantially identical. Debt securities are deemed to be of the same class if the terms relating to interest rate, maturity, subordination, convertibility, call, redemption, and other material terms are substantially the same. Information must be “reasonably current” in relation to the date of re-sale under Rule 144A. This delivery obligation can continue for some time.

To be reasonably current the information must be as of a date within 12 months prior to the re-sale; the most recent balance sheet must be as of a date within 16 months prior to the re-sale; and the most recent profit and loss and retained earnings statements must be for the 12 months preceding the date of the balance sheet. The issuer will prepare an offering memorandum with disclosures normally exceeding the disclosures required to be made available under Rule 144A -- because the offering memorandum often is used as a marketing document. Also, in general, robust disclosure of the issuer’s business and finances reduces liabilities of the issuer and the initial purchasers. Broker-dealers re-offer and re-sell the securities using the exemption provided by Rule 144A. Rule 144A permits the broker-dealer to immediately re-offer and re-sell the restricted securities, even though it has purchased the securities with a view to their distribution.

The availability of Rule 144A does not depend on how much time has expired since the securities were issued or on whether the reseller had investment intent when it purchased the securities. Re-sales under Rule 144A are completely separated from the issuer’s original offering—no matter how quickly thereafter they occur. The documentation used in a Rule 144A transaction is similar to that used in registered offerings, including an offering memorandum and a purchase agreement between the issuer and the initial purchasers (i.e., broker-dealers).

The offering memorandum will contain a detailed description of the issuer, including its financial statements, and the securities to be offered. The form, organization, and content of a purchase agreement for a Rule 144A offering often resembles an underwriting agreement for a public offering but is modified to reflect the manner of offering. In the case of a Rule 144A offering that is combined with a Regulation S offering, the Regulation S offering may be conducted using documents that are based on the country-specific practices of the relevant non-U.S. jurisdiction or jurisdictions. However, the disclosure documents in such a case generally will contain the same substantive information so that investors have the same “disclosure package.”

In connection with offers of debt securities, it is very common to have a Rule 144A tranche offered to QIBs, and a Regulation S tranche offered to non-U.S. persons. However, while Rule 144A securities generally have a restricted period of six months to one year, Regulation S debt securities have a restricted period of only 40 days. Therefore, these tranches are represented by separate certificates to ensure their lawful transfer in the secondary market. The Rule 144A global certificate with a Rule 144A restrictive legend is deposited with DTC, while the Regulation S global certificate with a Regulation S restrictive legend is deposited with a European clearing system. These two securities have different CUSIP numbers and other security identification numbers.

The Rule 144A securities can be re-sold to non-U.S. persons if the buyer certifies that it is not a U.S. person, and the sale otherwise complies with Regulation S. The Regulation S securities can be re-sold in the United States to QIBs if the re-sale complies with Rule 144A. A registration rights agreement would only be applicable to Rule 144A transactions in which the issuer has agreed to register under the Securities Act the securities re-sold in the Rule 144A transaction. The Rule 144A offering process is often similar to the public offering process. The features of this process typically include: solicitation of orders using a “red herring” or preliminary offering memorandum; preparation and delivery of a working term sheet; confirmation of terms with a final offering memorandum; execution of the purchase agreement at pricing; delivery of a comfort letter (if any) from the issuer’s auditing firm at pricing; and closing three to five days after pricing.

Rule 144A offerings do not subject the issuer and the initial purchasers to liability under Section 11 of the Securities Act. Accordingly, the initial purchasers are not entitled to the “due diligence” defense that may be established under Section 11. Liquidity is the primary benefit that comes from holding freely tradable securities rather than restricted securities. Plus some states prohibit some mutual funds and insurance companies from investing more than a certain percentage of their assets in restricted securities. Some investment partnerships and similar entities are subject to comparable restrictions under their organizational documents. Absent an issuer’s agreement to register Rule 144A securities, these entities are limited in their ability to purchase securities in Rule 144A transactions.

Exxon Capital versus Shelf Registrations

The two principal methods to register Rule 144A securities under the Securities Act are “Exxon Capital” exchange offers and Shelf registrations under Rule 415 of the Securities Act. An Exxon Capital exchange offering is a procedure under which securities are privately placed pursuant to Rule 144A and then promptly exchanged for similar securities that have been registered under the Securities Act. This is the preferred means for providing holders of Rule 144A securities with freely tradable securities. It eliminates the need to continuously update a shelf registration statement over its lifetime if any of the investors in the Rule 144A offering are affiliates of the issuer. However, affiliates of the issuer may not participate in an Exxon Capital exchange offer, and broker-dealers also may not participate in these exchange offers.

In addition, all exchanging holders will be required to represent that they acquired the securities in the ordinary course of their business and have no arrangements or understandings with respect to the distribution of the security that is the subject of the exchange offer. Under Rule 415(a)(1)(i), issuers of Rule 144A securities may register the resale of the restricted securities that were sold in the Rule 144A transaction. Registered offerings under Rule 415 are known as shelf registrations. Rule 415(a)(1)(i) permits either a delayed or continuous offering of securities “which are to be offered or sold solely by or on behalf of a person or persons other than the registrant . . . .” The persons covered by this rule include re-sellers holding Rule 144A securities.

Although shelf registrations offer potential liquidity to buyers of Rule 144A securities, the securities remain restricted until they are re-sold under the shelf registration statement. In shelf registrations, the issuer must covenant to keep the shelf registration statement continuously effective for no less than one year in order to ensure the holder liquidity until the resale exemption under Rule 144 becomes available without any limitations on non-affiliates. “Exxon Capital” exchange offers are the preferred means for providing holders of Rule 144A securities with freely tradable securities.

Questions? Contact [email protected]

Start Up Money Using the JOBS Act

Posted on July 27, 2016 at 2:15 AM Comments comments (0)

Want to use SEC Rule 506(c), Rule 506(b, Rule 504, or Regulation A to raise start up money?


Our turnkey documentation includes:


· Private Placement Memorandum with topic-specific “Risk Factors” and “Forward-Looking Statements”

· Professional subscription agreement

· Accredited Investor Verification Letter

· Non-Disclosure Agreement


Private Placement Advisors LLC provides JOBS Act solutions for both start ups and investors

Handbook and crowdfunding platforms

Posted on September 28, 2015 at 3:25 PM Comments comments (0)

Handbooks: http://www.privateplacementadvisors.com/handbooks

Crowdfunding platforms: http://www.sanfranciscofunding

Connect with Douglas Slain

Email: [email protected]

LinkedIn: http://linkedin.com/in/douglasslain

Twitter: https://twitter.com/exemptofferings

Blog: http://www.privateplacementadvisors.com/apps/blog

Seven common mistakes of property flippers

Posted on September 12, 2015 at 10:05 PM Comments comments (0)

1) Overpaying Buying a property that has solid value is the most important thing, but finding that property usually takes time and patience. The most common mistake is overpaying. You may want to start with a low-ball offer and work up to a price point before settling your deals.

2) Lack of in-depth knowledge of after-repair market values Most people find distressed properties either via foreclosures or short sales; that does not mean you are buying for less than the fair market value. Before bidding you need to understand the after-repair market value of the property or you may overpay Being patient while you search is key. The profitability of your rehab depends directly on the initial price at which you buy your property.

3) Property is not a “rehab” Some properties lack sufficient upside to make them viable fix-and-flippers. A house, for instance, that just needs some yard work, new paint and other cosmetic work leaves little opportunity to add value. Unless that house was obtained at a foreclosure sale or under unusual circumstances, it is unlikely to be discounted much and the brokerage commissions will eat into limited profits. At the other end of the continuum are properties that are close to being “teardowns.” Flawed foundations, systemic drainage issues, major roof problems, or environmental problems including mold – these are some problems that can be “beyond repair” economically.

Sweet spot? Ideal fixers often have poor curb appeal, bad landscaping, minor structural problems, and perhaps extensive interior problems. An ugly property often offers the most profit potential. Do not get overoptimistic about the economics of the renovations. Do not overestimate the increase in market value of the proposed improvements and do not underestimate the out-of pocket cost of those repairs. Cutting down view-obstructing trees or landscaping a backyard—these are kind of improvements that may make economic sense. You need to analyze how much value is added by each renovation (or other added value feature), and compare that value to the costs, while keeping in mind the value of comparable houses in the neighborhood.

4) Failure to have a well thought-out budget before bidding Estimating the acquisition costs and the interest payments on any borrowed money is straightforward, but rehab costs must be guessed at (and then tightly controlled). Property flippers are project managers as well as investors. Timeframes for the project must be estimated and understood. A realistic budget not only helps you get organized but can serve to make sure that each contractor is bidding on work you want. Try to get line-item bids with each sub-project broken out separately.

5) Not using the best sources of financing Try banks and savings and loans, crowdfunding portals, angel investors, friends and family—in that order.

6) Failure to keep the project on time and on budget No matter whom you hire, you must be in control of all the details, including scheduling, budgeting, and monitoring workmanship. You are the one with the “vision” of the renovation so you will often have to be on-site to answer last-minute questions. Tasks performed out of order throw a wrench into the schedule that you have developed. You may want to set up incentives for the contractors in exchange for meeting project completion dates. You need to have a schedule.

7) Not having alternative exit strategies. Exit strategies are crucial when the market turns against you. Exit strategies include: lease with a purchase option; wholesale to another investor; rent out the property.