Regulation D

C is correct. Rule 506(c) specifically permits general solicitation and advertising (including social media) for private placements, provided that all purchasers are accredited investors and the issuer takes reasonable steps to verify their accredited status. This matches Marcus's plan to advertise publicly and require accredited investor documentation.

A is incorrect because Rule 504 has a maximum offering limit of $10 million in a 12-month period, which is far below the $75 million Marcus wants to raise. B is incorrect because Rule 506(b) prohibits general solicitation and advertising; Marcus cannot use social media marketing under 506(b). D is incorrect because Regulation D Rule 506(c) was specifically created to allow general solicitation in private placements when properly structured with verified accredited investors.

B is correct. Rule 506(b) permits up to 35 non-accredited investors to participate in a private placement, provided these investors are "sophisticated" - meaning they have sufficient knowledge and experience in financial matters to evaluate the risks and merits of the investment. The offering can also include an unlimited number of accredited investors.

A is incorrect because this describes Rule 506(c), which requires all investors to be accredited when general solicitation is used. B correctly identifies the 506(b) limit. C is incorrect because the limit is specifically 35 non-accredited investors, not 100. D is incorrect because it confuses Rule 504 (which has a $10 million limit) with Rule 506(b) (which has no dollar limit but restricts non-accredited investors to 35 sophisticated investors).

A is correct. Rule 504 limits offerings to $10 million in any 12-month period. Calculate: $10 million (maximum) - $8 million (already raised) = $2 million remaining capacity. The 12-month period starts from the first sale in the March 15, 2026 offering, so until March 15, 2027, the company can only raise an additional $2 million under Rule 504.

B ($8 million) incorrectly assumes the company can raise the same amount again without considering the 12-month aggregate limit. C ($10 million) incorrectly suggests the company gets a fresh $10 million limit for each new offering, but the limit is cumulative over the 12-month period. D ($18 million) incorrectly adds the amounts together rather than recognizing the $10 million ceiling applies to all Rule 504 offerings combined in a 12-month period.

D is correct (the EXCEPT answer). This statement is FALSE. Rule 506(b) offerings specifically prohibit general solicitation and advertising, regardless of whether sales are limited to accredited investors. If an issuer wants to use general solicitation, they must use Rule 506(c), which permits advertising but requires all purchasers (not just a majority) to be verified accredited investors.

A is accurate: Regulation D securities are restricted securities with resale limitations, typically requiring a 6-12 month holding period and compliance with Rule 144 volume limits. B is accurate: Form D must be filed electronically with the SEC within 15 days after the first sale of securities in the offering. C is accurate: While Regulation D provides a federal exemption, issuers may still need to register with states or rely on state exemptions; federal covered securities under Rule 506(b) and 506(c) are exempt from state registration but still require state notice filings.

B is correct. Statements 1, 2, and 4 are accurate for Rule 506(c) offerings.

Statement 1 is TRUE: Rule 506(c) requires all purchasers to be accredited investors, and the issuer must take reasonable steps to verify their accredited status (such as reviewing tax returns, W-2s, or third-party verification letters). This is more stringent than Rule 506(b).

Statement 2 is TRUE: Rule 506(c) offerings are exempt from federal securities registration under the Securities Act of 1933, allowing issuers to raise unlimited capital without SEC registration. However, they are still subject to anti-fraud provisions.

Statement 3 is FALSE: This describes Rule 506(b), not Rule 506(c). Because Rule 506(c) permits general solicitation, it compensates by requiring all investors to be accredited - no sophisticated but non-accredited investors are permitted under 506(c).

Statement 4 is TRUE: All Regulation D offerings, including Rule 506(c), require the issuer to file Form D electronically with the SEC within 15 days of the first sale of securities.