Exempt securities are securities that qualify under exemptions from the Securities and Exchange Commission’s (SEC) registration requirements. All securities must be registered unless an exemption in met. Registration means the listing of securities on an exchange — this is often referred to as “going public.” If exempt, the securities do not need to be registered and listed on a such an exchange, so they may be offered and sold as long as the purchase and sale is in compliance with an exemption. One common and well known exemption is the exemption for private placements. Private placements do not involve any public offering. This means that the offering of the securities is made only to a certain group of qualified investors. To qualify under this particular exemption, the purchasers of the securities must (1) either have enough knowledge and experience in finance and business matters to be so-called“sophisticated investors” — they must be able to evaluate the risks and merits of the investment — or be able to bear the investment’s economic risk; (2) have access to the type of information normally provided in a prospectus for a registered securities offering; and (3) agree not to resell or distribute the securities to the public. In general, public advertising of the securities offering, and the general solicitation of the offering to investors, make the offering incompatible with the requirements of the exemption.