[Vineyard Development] A community group in Montana wanted to revitalize the area and held a meeting urging residents to invest in local businesses. After the meeting, Mai and Trent, who own Valley Vineyard, decide to expand by adding a spa and first-class restaurant to the property to attract tourists. They plan to raise capital for the vineyard development by issuing securities to local investors. All of Valley Vineyard's property and assets are in Montana and their wine sales are about 85% to stores, consumers, or distributors within the state. Once the spa and restaurant are running, they would like to use their profits to open a small wine-bar in Florida.
-Are the Valley Vineyard securities exempt from registration with the SEC?

Question

Quizplus · Accepted Answer

The securities are exempt from registration with the SEC under the intrastate offering exemption, Rule 147, which requires that the offer or sale of securities be made only to residents of the state where the issuer is doing business, and the issuer must do a significant amount of its business in that state. Since Valley Vineyard's operations and sales are primarily within Montana, and they plan to use at least 80% of the profits within Montana, they meet the criteria for this exemption.

[Vineyard Development] a Community Group in Montana Wanted to Revitalize