Hardline Global — Capital Operations

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RESTRICTED — Material Non-Public Information

This brief contains material non-public information about Hardline Global LLC's capital raise. Distribution to unauthorized persons is strictly prohibited under §4(a)(2) and FL §517.061(11). Any unauthorized disclosure may constitute a violation of federal securities law.

Severity: Critical · Classification: Restricted · Always Active

Form D Filing — 15-Day Window from First Sale

Regulation D Rule 503 requires electronic Form D filing with the SEC via EDGAR within 15 calendar days of the date of first sale of securities. Missing this window does not invalidate the exemption but triggers a bad actor risk and potential SEC inquiry. Designate counsel to monitor and file immediately upon first close.

Severity: High · Trigger: First Sale Date · Action: Assign Counsel

83(b) Election Window — 30 Days from RSA Grant Date

IRC §83(b) elections must be filed with the IRS within 30 days of the RSA grant date to lock in current FMV for tax purposes. Missing this window permanently forecloses the QSBS exclusion window optimization. Confirm both founder elections have been timely filed and retain copies with corporate records.

Severity: Medium · Status: Monitoring · Action: Confirm Receipt

Legal Framework — Exemption Structure

Phase 1 · Active

§4(a)(2) Private Placement Exemption

Securities Act 1933 — Federal Private Placement

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Exempts offers to persons with pre-existing substantive relationship with issuer
Qualifying investors possess full access to all material company information
No PPM required — insider knowledge standard satisfies disclosure obligations
No general solicitation or advertising permitted
Securities are "restricted" — 12-month Rule 144 holding period for resale
Issuer must reasonably believe purchasers have sufficient financial sophistication

KEY: Qualifying investors already have all information a PPM would provide. No separate disclosure document is legally required under this exemption.

Phase 1 · Active

FL §517.061(11) Accredited Only Exemption

FL Securities Act — State Level Exemption (SB 532, Oct 2024)

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Exempts sales exclusively to Accredited Investors per 17 CFR §230.501(a)
No cap on offering amount or number of accredited investors
Limited general announcement permitted (factual only — no inducement)
No dealer/broker registration required for issuer-direct sales
Rule 144A safe harbor preserved for subsequent QIB resales
Pairs with §4(a)(2) for complete federal + state exemption stack

Phase 2 · Q1 2026

Reg D Rule 506(c) Accredited Campaign

17 CFR §230.506(c) — General Solicitation Permitted

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All purchasers must be Accredited Investors under §230.501(a)
Issuer must take "reasonable steps" to verify accredited status
Acceptable: IRS W-2, brokerage statements, attorney/CPA letter, 3rd-party platform
General solicitation and advertising explicitly permitted
Form D filing required within 15 days of first sale via EDGAR
Bad actor disqualification check required under Rule 506(d)
State registration preempted; blue sky limited to notice filings only

Phase 3 · Q3 2026

Reg A+ Tier 1 Public Marketing

17 CFR §230.251 — SEC-Qualified Mini-Registration · Tier 1

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Maximum raise: $20M per 12-month period (Tier 1 cap)
SEC-qualified Offering Circular required (Form 1-A) — SEC review required
"Testing the waters" solicitations permitted pre-qualification
Non-accredited retail investors permitted — no per-investor percentage cap
State law NOT preempted — must register or qualify in each offering state
Reviewed financial statements acceptable — no PCAOB audit required
No ongoing periodic reporting obligations after offering completion
Securities may carry resale restrictions — limited secondary market liquidity
Bad actor disqualification check required under Rule 262

Tier 1 vs Tier 2: Tier 1 avoids the PCAOB audit burden (~$50–150K) and ongoing SEC reporting, but requires state-by-state blue sky compliance. Appropriate for a targeted $20M expansion round.

All Phases

QSBS — IRC §1202 / OBBBA 2025

Qualified Small Business Stock — Tax Exclusion

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Up to 100% federal capital gains exclusion on QSBS held 5+ years
Florida C-Corp required entity type — Hardline Global qualified (domestic C-Corp)
OBBBA 2025 raised gross assets threshold: $50M → $100M
OBBBA 2025 raised per-taxpayer exclusion: $10M → $15M
80% of assets must be used in qualified active trade or business
Issuer must provide §1202 certification at time of issuance

Each qualifying investor may exclude up to $15M in capital gains — significant upside for Phase 1 founders.

Phase 1 Governance

Founder RSA & Subscription Framework

Equity Structure · Corporate Governance

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XXX shares authorized — Florida C-Corp (FL §607)
Founder RSA executed — vesting schedule TBD
4-year vest / 1-year cliff on all founder shares
83(b) election required within 30 days of RSA execution
Subscription Agreement replaces PPM — investor reps & warranties
Board governance memo: fiduciary duties, D&O indemnification, conflicts policy
KYC/AML governance procedure — FL and federal compliance