Hawkin and Snead is a partnership located in South Dakota that specializes in documentary films.Hawkin and Snead feel that they need additional capital to expand and their personal assets are fully tapped.The partners envision a sale of common stock shares only to South Dakota residents and they need about $10,000,000.They also realize that their pool of investors is large,but shallow.That is,they can recruit many potential share purchasers,but their investment amounts will be small.They feel they do not have the money for a national offering and full-blown SEC registration.Which of the following exemptions will suit Hawkin and Snead's needs best?

Question

Quizplus · Accepted Answer

An intrastate offering would be the best choice for Hawkin and Snead's needs. This exemption allows them to sell securities only to residents of South Dakota, which is their target market. Additionally, the offering limit for intrastate offerings is $5,000,000, which is sufficient for their capital needs. They would also be exempt from SEC registration as long as they comply with state securities laws. This option suits their shallow pool of investors well, as they can target a large number of potential purchasers while limiting their investment amounts to meet the $5,000,000 offering limit.

Hawkin and Snead Is a Partnership Located in South Dakota