Regulation D Rule 505

The main problem with Rule 505 is similar to Rule 504. You must file your Offering Documents under the State your investors are resident. Unlike Rule 506, the SEC requires you to provide the investor with "All Material Information" but does not require their approval of your Offering. Rule 505 requires the state to approve the Offering. This results in a significantly greater filing responsibility and cost. I would also point out that the "state" will require much greater disclosure requirements that you might argue have nothing to do with the risks associated with your Offering. Unfortunately, the greater the number of "risk disclosures" the more difficult it is to convince investors to write you a check.

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Shields Capital Partners

3606 Enterprise Avenue

Naples, FL 34104

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