What is meant by a “Private Offering” or “Private Placement?”

The whole point of the private offering is to avoid burdensome registration and prospectus delivery requirements of the Federal Securities Laws. A “private offering” is exempted from such compliance.

Regulation D provides the “safe harbor” provisions which, if complied with, will have the effect of exempting the private offering from compliance with the registration and prospectus delivery requirements of the Federal Securities Laws. It does not exempt the offering and persons associated therewith from compliance with the fraud provisions of the Federal Securities Laws or compliance with the various State Securities Laws. However, pursuant to recent federal legislation, states are prohibited from imposing their blue sky regulation on securities offered pursuant to Rule 506 of Regulation D except for the filing of the Form D or a substantially similar form and the payment of filing fees.