Definitions

Accredited Investors

Rule 504 Exemption for Limited Offerings and Sales of Securities Not Exceeding $1,000,000

One of the most common ways for small businesses to raise capital is via an exemption from registration requirements imposed by the Securities and Exchange Commission.

The Rule 504 exemption is authorized by Regulation D promulgated under the 1933 Act and allows an issuer to raise up to $1,000,000 in a 12 month period. Therefore no registration statement is required so long as certain other criteria are met.

Call 310-275-3055 to discuss your plan with Kenneth G. Eade, securities lawyer. Email: keneade93101@yahoo.com

Rule 505 -- Exemption for Limited Offers and Sales of Securities Not Exceeding $5,000,000

The specific conditions of this exemption are:

Limitation on aggregate offering price. The aggregate offering price for an offering of securities under this Rule 505, as defined in Rule 501(c), shall not exceed $5,000,000, less the aggregate offering price for all securities sold within the twelve months before the start of and during the offering of securities under this Rule 505 in reliance on any exemption under section 3(b) of the Act or in violation of section 5(a) of the Act.

Contact 310-275-3055 to discuss your plan of capitalization with Kenneth G. Eade, securities lawyer. Our address is 190 North Canon Drive, Suite 420, Beverly Hills, California 90210 Fax: 310-275-3105. Email: keneade93101@yahoo.com.

Rule 506 of Regulation D

Under this rule a company can raise unlimited capital so long as investors are sophisticated and receive restricted securities which cannot be sold for at least one year. Discuss what information is allowed to be given to potential investors so as not to violate anti-fraud provisions of security laws.