District of Columbia Summary of Terms of Proposed Private Placement Offering

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US-ENTREP-0064-1
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This Term Sheet summarizes the principal terms with respect to a potential private placement of equity securities of a "Company") by a group of investors ("Investors") led by a Venture Fund. This Term Sheet is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation except as provided under "Confidentiality," "Exclusivity", and "Expenses" below. No other legally binding obligation will be created, implied or inferred until a document in final form entitled "Stock Purchase Agreement" is executed and delivered by all parties. Without limiting the generality of the foregoing, it is the parties intent that, until that event, no agreement shall exist among them and there shall be no obligations whatsoever based on such things as parol evidence, extended negotiations, "handshakes," oral understandings, courses of conduct (including reliance and changes of position), except as provided under "Confidentiality," "Exclusivity", and "Expenses" below.
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FAQ

Rule 5123 requires firms to file offering documents that were used to sell the private placement, which can include the private placement memorandum, term sheet or other offering documents.

An offering memorandum is a document issued to potential investors in a private placement deal. The offering memorandum spells out the private placement's objectives, risks, financials, and deal terms.

Section 4(a)(2) Issuer Private Placements Section 4(a)(2) of the Securities Act exempts from registration offers and sales by the issuer that do not involve a public offering or distribution. It is a transactional exemption and only exempts the particular offer and sale of unregistered securities by the issuer.

A general exemption from registration for private offerings of securities. The exemption allows the issuer to offer or sell only to sophisticated investors who do not need the protections provided under the SEC's registration and disclosure regulations.

Private placements are unregistered, non-public securities offerings that rely on an available exemption from registration with the Securities and Exchange Commission (SEC).

Technically, when raising funds under Regulation D or any other SEC exemption, there's no strict requirement to utilize a Private Placement Memorandum (PPM).

FINRA Rule 5123 (Private Placements of Securities) requires firms to file with FINRA's Corporate Financing Department within 15 calendar days of the date of first sale of a private placement, a private placement memorandum, term sheet or other offering document, or indicate that no such offerings documents were used.

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District of Columbia Summary of Terms of Proposed Private Placement Offering