In purchasing securities through a 506(c) Offering, the Company is obligated to verify any participating investor’s status as an accredited investor in accordance with Rule 501 of Regulation D. There are three primary methods the Company may employ to comply with the verification standards. Note – most issuers use third party verification (broker-dealer letter, attorney letter, CPA letter, or a third party speciality services like verifyinvestor.com) to obtain proper and suitable verification. It is possible for the investor to provide bank statements and/or IRS tax forms – however most clients do not want the responsibility of reviewing those types of records and forms.
Investors in the offering will need to provide the Company with verification that meets the standards and form using one or multiple methods as listed below:
Income: The Company may verify an individual’s status as an accredited investor on the basis of income by reviewing copies of any IRS form that reports net income, such as Forms W-2 or 1099 (which are typically filed by an employer or other third party payor), or Forms 1040 filed by the prospective purchaser (with non-relevant information permitted to be redacted). Under this method, the Company must review IRS forms for the two most recent years and obtain a written representation from the prospective purchaser that he or she has a reasonable expectation of attaining the necessary income level for the current year. Where accredited investor status is based on joint income with the person’s spouse, the IRS forms and representation must be provided with respect to both the purchaser and the spouse.
Net Worth: Under this method, the Company will need to review bank or brokerage statements or third-party appraisal reports to verify the purchaser’s assets and a credit report to verify liabilities, in each case dated within the prior three months, and will need to obtain a written representation from the prospective purchaser that all liabilities have been disclosed. Where accredited investor status is based on joint net worth with the person’s spouse, the asset and liability documentation and representation must be provided with respect to both the purchaser and the spouse.
Reliance on Determination by Specified Third Parties to Provide Verification: The Company may satisfy the verification requirement if it obtains a written confirmation from a registered broker-dealer (who the investor has had an account with longer than 6 months), an SEC-registered investment adviser, a licensed attorney, or a certified public accountant that within the prior three months such person or entity has taken reasonable steps to verify that the purchaser is an accredited investor and has determined that the purchaser is an accredited investor. Third party services, such as verifyinvestor.com (managed by an attorney) are also qualified third party providers of verifications.
Proper verification must be submitted with the subscription for securities in order for the Company to verify the investor’s suitability for investment and accept the subscription.
Any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000.
By use of this web portal software application (the “portal” or the “software application”), the person creating an account on the portal (the “User”) shall hereby agree to and acknowledge the following Agreement;
Use of the software application in managing certain processes related to the securities offering is provided to the Issuer company executing the securities offering under a license provided by Regulation D Resources Enterprises, Inc. (“RDR”). RDR makes no representations whatsoever regarding the investment opportunity or securities offering whose processes are, in part, being managed through the software application. RDR is not a broker of securities and RDR does not provide or intend to provide any recommendation to purchase securities from the offering.
RDR is not responsible or liable for Issuer content that has been uploaded to the software application. This shall include, but not be limited to; memorandum documentation, subscription agreements, SEC filings, investor statements, supporting materials, and any other information, data, or documents uploaded by the Issuer into the portal. Any statements made by the Issuer on the portal regarding the Issuer company, its operations, or the securities offering is content provided by the Issuer and has not been reviewed, approved, or vetted by RDR.
Transfer of any subscription funds shall occur off-portal and RDR is not responsible or involved in any manner for the tracking or delivery of such funds. Subscription funds shall be delivered directly to the Issuer company from the investor and said funds do not transit through RDR’s software application in any manner. Data and statistics regarding the offering, such as the amount of total subscriptions for the offering, are managed by the Issuer company, and subject to inputs by the Issuer company, and RDR does not track, guarantee or ensure the reliability of such data.
It is the responsibility of the Issuer company to engage in any necessary back-ups of data or documents that may reside on the portal including User uploaded data and documents. RDR is not responsible for any loss of data or documents uploaded onto the software application and portal.
Effective as of the date of account creation on the portal, the User shall indemnify RDR and hold RDR harmless with regard to any damages, losses, obligations (whether known or unknown, or due or to become due or otherwise), judgments, fines, fees, penalties, interest obligations, investment losses, deficiencies, other actual losses (for example, verifiable lost income related to time spent defending such claim or action) and reasonable expenses (including, without limitation amounts paid in settlement, interest, court costs, costs of investigators, reasonable fees and expenses of attorneys, accountants, financial advisors and other experts) incurred or suffered by User in connection with use of the RDR software application or investment in any offering of securities by an Issuer using the software application.
The indemnification contained in this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation, liquidation or otherwise to all or substantially all of the business and/or assets of the Company), spouses, heirs and personal and legal representatives.
If this Agreement or any portion hereof shall be found to be invalid on any ground by any court of competent jurisdiction, then the User shall nevertheless indemnify and hold harmless RDR, as to costs, charges and expenses (including court costs and attorneys’ fees), judgments, fines, penalties and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, and in any appeal in such action, suit or proceeding, and in any inquiry or investigation that could lead to such an action, suit or proceeding, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the fullest extent permitted by applicable law.
This Agreement shall be governed by the laws of the State of North Carolina. Any controversy, dispute or claim arising out of or relating to the software services provided by RDR, this Agreement, or the breach thereof, shall be settled exclusively by arbitration administered by the American Arbitration Association. The number of arbitrators shall be three (3) and the place of arbitration shall be Wilmington, North Carolina with North Carolina law applicable for the arbitration process subject to the specific terms of this Dispute Resolution clause.
User hereby agrees to waive any right they may have to pursue legal recourse or legal action against RDR or its Officers, Directors, or Employees, in a court of general jurisdiction regarding any controversy, dispute or claim of negligence arising out of or relating to the software services provided by RDR, any materials that may have been produced for the offering through RDR, consulting provided by RDR, this Agreement, or any claimed breach thereof. User shall relinquish any right to request an alternate venue for arbitration in any other jurisdiction other than Wilmington, North Carolina.