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 Private Placement Markets 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 (See www.PPMEquity.com & www.PPMDebt.com)

  • Registration of all Form D's with the United States Securities and Exchange Commission for the sale of all Securities by the Company.

To engage us for a Custom Rule 504 - Regulation D Offering Preparation:

  1. Private Placement Markets is very selective about the Reg D 504 Clients it engages with. Please call our Capital Markets Team or email us as the contact listed to the left, and we will schedule a time to speak regarding your Reg D 504 needs.

  2. If there is a mutual interest to engage for the Drafting of your Reg D 504, we will forward you an engagement letter to be signed, at which time you will be required to submit a retainer equal to 50% of our service charge for the drafting of the Offering Memorandum. Our estimated total cost for a Rule 504 Offering under Regulation D is a Flat $1,750 USD (50% = $875 USD). NOTE: The balance of $875 will be due and payable 30 days net from retaining services or upon delivery of a final PPM document whichever comes first.

  3. Once complete, we will send you an email with information detailing the necessary information we need to get started working on your offering.

  4. General Time from Start-to-Finish, given the vast number of Offerings we have done over the past ten plus years, just a few days. 

Mr. Steve Muehler

Founder & Managing Member

Private Placement Markets

101 California Street

San Francisco, CA 94111

Email: Steve@PPMSecurities.com

Phone: (877) 259-8066

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Private Placement Markets, LLC (a Delaware Limited Liability Company) provides no depository services and is not insured by the FDIC. Private Placement Markets is an Investment Banking Industry Document Preparation Company and Capital Markets Advisor. Private Placement Markets does not offer, and does not offer to provide any broker dealer or market maker services. Private Placement Markets operates this website (referred to as the “Website”). By accessing this Website and any pages thereof, you agree to be bound by its Terms of Use and Privacy Policy. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Private Placement Markets does not provide financial planning services. Private Placement Markets does not provide tax advice and does not represent in any manner that the outcomes described herein will result in any particular tax consequence.

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