Section 26-B253. FILING REQUIREMENTS

 

253.1The issuer or applicant shall file the following documents with the Commissioner no later than 20 calendar days prior to offer or sale of any offering made in reliance on the exemption under this subsection.

 

253.2A written notice of claim of exemption from registration, specifying that the issuer will be conducting an offering in reliance on the exemption under this subsection, accompanied by the filing fee set forth in Section 249.

 

253.3A copy of the offering document to be provided to prospective investors in connection with the offering, containing all of the following: 

 

(a) A description of the company, the type of entity, the address and telephone number of its principal office, its history, its business plan, and the intended use of the offering proceeds, including any amounts to be paid, as compensation or otherwise, to any owner, executive officer, director, managing member, or other person occupying a similar status or performing similar functions on behalf of the issuer;

 

(b) The identity of all persons owning more than 10 percent of the ownership interests of any class of securities of the company;

 

(c) The identity of the executive officers, directors, managing members, and other persons occupying a similar status or performing similar functions in the name of and on behalf of the issuer, including their titles and their prior experience; 

 

(d) For persons reported in (a) and (b), each such individual will provide to the Department on a confidential basis, an affidavit in the form of Attachment A, which includes the date of birth, address and social security number of the individual and a statement signed under penalty of perjury that the individual is not disqualified from participating in this offering;

 

(e) The terms and conditions of the securities being offered and of any outstanding securities of the company; the amount of securities being offered; either the percentage ownership of the company represented by the offered securities or the valuation of the company implied by the price of the offered securities; the price per share, unit, or interest of the securities being offered; any restrictions on transfer of the securities being offered; and a disclosure of any anticipated future issuance of securities that might dilute the value of securities being offered;

 

(f) The identity of any person who has been or will be retained by the issuer to assist the issuer in conducting the offering and sale of the securities, excluding persons acting solely as accountants or attorneys and employees whose primary job responsibilities involve the operating business of the issuer rather than assisting the issuer in raising capital;

 

(g) For each person identified as required under subparagraph (ii)(E),  a description of the consideration being paid to the person for such assistance. Any such consideration must be paid into a registered bank account; 

 

(h) A description of any litigation, legal proceedings, or pending regulatory action involving the company or its executive officers;

 

(i) Any additional information material to the offering, including, if appropriate, a discussion of significant factors that make the specific offering speculative or risky. This discussion shall be concise and organized logically and may not be limited to risks that could apply to any issuer or any offering under this section. There must be set forth under an appropriate caption, a carefully organized series of short, concise paragraphs, summarizing the most significant factors that make the offering speculative or substantially risky. Issuers should avoid generalized statements and include only factors that are specific to the issuer; 

 

(j) The issuer’s business plan for the next five fiscal years;

 

(k) The  issuer’s financial statements, for the three most recent fiscal years, or for as much time as the issuer has been in existence, if less than three years;

 

(l) A statement of the issuer’s proposed use of funds to be derived from the offering; 

 

(m) All sales material that is distributed or made available to potential purchasers during the offering period;

 

(n) If any material change occurs in the information that an issuer submits to the Commissioner in a statement filed under subparagraph (ii), the issuer shall, within 5 calendar days of the change, notify the Commissioner and make corresponding changes to the disclosures in the offering document; and

 

(o) An escrow agreement with a bank, savings bank, savings and loan association, or credit union chartered under the laws of this  district or an agency of the federal government in which all investor funds will be deposited into an interest-bearing account, providing that all offering proceeds, plus accrued interest, will be released to the issuer only when the aggregate capital raised from all investors is equal to or greater than the offering amount specified in the disclosure document,  and all the funds so released are used in accordance with the disclosure document, provided,  if that target offering amount is not raised by the time stated in the disclosure document, the depository institution shall refund all investor funds raised in the offering, with accrued interest.

 

 

authority

Section 403 of the Securities Act of 2000 (Act), effective October 26, 2000 (D.C. Law 13-203, D.C. Official Code § 31-5604.03 (2012 Repl.)).

source

Final Rulemaking published at 61 DCR 11203 (October 24, 2014).