Summary of Intrastate Crowdfunding Exemptions

Any offer or sale of securities that uses the jurisdictional means (the mails, phones, internet) must be registered under the federal Securities Act of 1933 or be made in accordance with an exemption from that registration. The federal exemption most frequently relied on for intrastate offerings is Section 3(a)(11) of the Securities Act. Such exemptions apply ONLY to registration of the offering; issuers are still subject to liability under the federal antifraud laws. Similarly, if issuers acquire a specified number of equity holders, they will be required to register under the federal Securities Exchange Act of 1934. Any securities intermediaries used in the offerings must comply with applicable broker-dealer registration requirements. While exemptions at the federal level exist for brokerage activities that are purely in-state, it should be noted that the category of funding portals created by the JOBS Act relates only to offerings made in reliance on Section 4(a)(6) of the Securities Act. Separate state authorization is necessary for such non broker-dealer platforms to intermediate intrastate offerings. State Title Alabama Georgia Invest Georgia Exemption Kansas Invest Kansas Exemption Maine An Act to Increase Funding for Startups Michigan New Jersey North Carolina Invest NC Exemption Washington Allowing crowdfunding for certain small securities offerings Wis. Stat. 551.202(26) Wisconsin

Statute citation

GA Comp. R. & Regs. 5904-2-.08 Not yet enacted Section 3(a)(11) of the Securities Act* Only available to companies organized and doDecember 8, 2011 Section 3(a)(11) of the Securities Act* Only available to companies organized and do-

K.A.R. 81-521

32 MRSA 16304, sub6-A March 2, 2014 Rule 504 of Regulation D December 30, 2013 Section 3(a)(11) of the Securities Act* Only available to companies organized and doNot yet enacted Section 3(a)(11) of the Securities Act* Only available to companies organized and doNot yet enacted Section 3(a)(11) of the Securities Act* Only available to companies organized and doMarch 12, 2014 Section 3(a)(11) of the Securities Act* Only available to companies organized and do-

Date enacted

August 12, 2011 Section 3(a)(11) of the Securities Act* Only available to companies organized and do-

November 8, 2013 Section 3(a)(11) of the Securities Act* Only available to companies organized and do-

Exemption from federal registration relied upon Companies permitted to use the exemption

Available to foreign organized companies as well

ing business in the state; excludes investment companies, investment advisers, or SEC reporting companies

ing business in the state; excludes investment companies, or SEC reporting companies

ing business in the state; excludes investment companies, SEC reporting companies, or blank check companies

as those organized in the state, but must be doing business in the state; excludes SEC reporting companies or blank check companies $1,000,000

ing business in the state; excludes investment companies, or SEC reporting companies

ing business in the state

ing business in the state; excludes investment companies, SEC reporting companies, or blank check companies

ing business in the state

ing business in the state; excludes investment companies, or SEC reporting companies

Aggregate annual sales limit

$1,000,000

$1,000,000

$1,000,000

$1,000,000 or $1,000,000 $2,000,000 with independent CPA audit Filing required at least 10 days before any offer is made or any general solicitation None identified

$1,000,000 or $1,000,000 $2,000,000 with independent CPA audit Notice filing not less than 10 days prior to the commencement of the offering Filing required

$1,000,000 or $2,000,000 with independent CPA audit Filing required at least 10 days before any offer is made

State registration requirements

Form CF1 filed not less than 10 days before any general solicitation or within fifteen days after the first sale of a security No payment to any solicitor unless the person is registered as a broker-dealer

Form GA-1 filed before any general solicitation or the twentyfifth sale of a security

Form IKE filed before any general solicitation or the twenty-fifth sale of a security

Short form registration statement; Form D required to be filed with the SEC

Intermediary requirements or restrictions

Intermediary not specifically required

No payment to any solicitor unless the person is registered as a broker-dealer

Intermediary not specifically required

No payment to any solicitor unless the person is registered as a broker-dealer

Offering is made exclusively through one or more Internet sites; sites likely must be operated by registered

Offering may be made through an Internet site exempt from broker-dealer registration subject to certain limitations

Offering may be made through an Internet site exempt from broker-dealer registration subject to certain limitations

No payment to any solicitor unless the person is registered as a broker-dealer

brokerdealers Investor limitation and Individual per issuer or annual investor limits Limited to Alabama residents; $5,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D Limited to Georgia residents; $10,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D Limited to Kansas residents; $1,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D $5,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D Limited to Michigan residents; $10,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D Limited to New Jersey residents; $5,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D Limited to North Carolina residents; $2,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D Limited to Washington residents; greater of $2,000 or 5% of income or net worth of investor if less than $100,000, or 10% of income or net worth of investor if greater than $100,000, up to $100,000 invested Identifying information about the Issuer Description of the company Intended use of proceeds Current litigation or legal proceedings Any information material to the Limited to Wisconsin residents; $10,000 per Issuer, unless investors qualifies as an Accredited investors under Rule 501 of Regulation D

Required disclosure to investors

Identifying information about the Issuer Restriction on transfer

Identifying information about the Issuer Restriction on transfer

Identifying information about the Issuer Restriction on transfer

Identifying information about the Issuer Financial condition Financial statements certified by Issuer executive, reviewed by CPA, or audited by CPA for raises of less than $100,000,

Identifying information about the Issuer Description of the company Terms and conditions of the securities Target amount and deadline Identificatio n of solicitors and intermediaries, along

Identifying information about the Issuer Description of the company Terms and conditions of the securities Target amount and deadline Identificatio n of solicitors and intermediaries, along

Identifying information about the Issuer Description of the company Terms and conditions of the securities Target amount and deadline Identificatio n of solicitors and intermediaries, along

Identifying information about the Issuer Description of the company Terms and conditions of the securities Identificatio n of solicitors and intermediaries, along with compensation Current

between $100,000 and $500,000, and greater than $500,000, respectively Intended use of proceeds Terms of the securities Target amount and deadline Valuation Current capitalization of the issuer Risks to purchasers Restriction on transfer Restrictions on advertising and communications General solicitation permitted after filing Form CF1 General solicitation permitted after filing Form GA-1 General solicitation permitted after filing Form IKE General solicitation not permitted

with compensation Current litigation or legal proceedings Restriction on resale

with compensation Current litigation or legal proceedings Any information material to the offering Restriction on resale

with compensation Current litigation or legal proceedings Any information material to the offering Restriction on resale

offering Restriction on resale

litigation or legal proceedings Any information material to the offering Restriction on resale

General solicitation permitted after filing with state

Public communication restricted to Internet site

General solicitation not prohibited

General solicitation not prohibited

General solicitation only permitted after approval by State Quarterly reports to investors covering business operations, financial condition, and

Ongoing reporting requirements

None

None

None

None

Quarterly reports to investors covering business operations, financial condition, and

Quarterly reports to investors covering business operations, financial condition, and

Quarterly reports to investors covering business operations, financial condition, and

Quarterly reports to investors covering business operations, financial condition, and

compensation to directors and officers Disqualification from exemption Applicable state securities law liability Bad Actor disqualification Potential liabilities include 8-617 of the Alabama Securities Act Bad Actor disqualification Potential liabilities include 10-5-12 of the Georgia Securities Act Bad Actor disqualification Potential liabilities include 1712a501 or 17-12a505 of the Kansas Securities Act Bad Actor disqualification Potential liabilities include Title 32 16501 or Title 32 16505 of the Maine Revised Statutes Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities sold are "restricted securities" Bad Actor disqualification Potential liabilities include 451.2501, 451.2504, or 451.2505 of the Michigan Uniform Securities Act Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

compensation to directors and officers None identified

compensation to directors and officers Bad Actor disqualification Potential liabilities include 78A-8 or 78A-9 of the North Carolina Securities Act

compensation to directors and officers Bad Actor disqualification Potential liabilities include RCW 21.20.010 or RCW 21.20.020

compensation to directors and officers Bad Actor disqualification Potential liabilities include Wis. Stat. 551.501 or 551.505

Potential liabilities include 49:352 or 49:354 of the New Jersey Uniform Securities Act

Applicable federal securities law liability

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Potential liabilities include antifraud liability under 12(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act; no exemptions Securities must come to rest in the state (9 month requirement under SEC

Restrictions on resale

Rule 147)

Rule 147)

Rule 147)

Rule 147)

Rule 147)

Rule 147)

Rule 147)

Rule 147)

* The Section 3(a)(11) exemption from federal registration is generally known as the "intrastate offering exemption." To qualify for this exemption, the company must: (1) be organized in the state where it is offering the securities; (2) carry out a significant amount of its business in that state; and (3) make offers and sales only to residents of that state. For instance, a corporation organized under the laws of Delaware and does business in Georgia would not qualify for the exemption. Additionally, issuers engaging in general solicitation under the exemptions must take care that they do not make offers of securities outside the state. SEC Rule 147 provides a safe harbor from federal regulation for issuers relying on the Section 3(a)(11) intrastate offering exemption.