reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.110 - Form of Application-Facing Page

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All applications for qualification of the offer and sale of
					 securities pursuant to Sections
					 25102(c),
					 25111,
					 25112,
					 25113 and
					 25121 of the Code shall have as
					 the first page thereof a facing page in the following form containing the
					 information therein specified:
(Department of Business Oversight Use Only)
							 ___________________________
DEPARTMENT OF BUSINESS OVERSIGHT
							 FILE NO.
Fee Paid $
							 ___________________________
(Insert file number of previous
							 filings of Applicant before the Department, if any)
Receipt No.
							 ___________________________
___________________________FEE:
(To be completed by Applicant)
Effective Date___________________________
___________________________Date of Application:
DEPARTMENT OF BUSINESS OVERSIGHT STATE OF
					 CALIFORNIA
FACING PAGE
Application for qualification of the offer and sale of
					 securities, under the Corporate Securities Law of 1968, by (check one):
( )
Coordination,
Section
							 25111
(
							 )
Post-Effective
)
Amendment
( )
Notification,
Section
							 25112
)
___________________________Number
( )
Permit,
Section
							 25113(b)(1)
)
To Application
( )
Permit (Small
							 Company),
Section
							 25113(b)(2)
( )
Permit,
Section
							 25121
)
Filed Under
( )
Negotiating
							 Permit,
)
___________________________Section
Section
							 25102(c)
(
							 )
Pre-Effective
)
___________________________Dated
This application is for an ( ) open or ( ) limited offering
					 qualification as defined in Section
					 260.001 of the rules (Check as
					 applicable).
1. Name of Applicant
______________________________________________________
2.
(a) Is
				  applicant a corporation, partnership, trust or other entity?
				  ___________________________
(b)
				  State of incorporation or jurisdiction under which organized?
				  ___________________________
(c) If
				  a corporation, is applicant in good standing in the State of its incorporation?
				  (Indicate "yes" or "no")___________________________
(d) Is applicant a registered investment
				  company? (Indicate "yes" or "no")
				  ___________________________
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.110.1 - Form of Application

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All applications for the offer and sale of securities shall
					 be typewritten or printed in the English language on one side only of either
					 legal or letter size paper.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.110.2 - Signing of Application

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An application for the qualification of the offer and sale
					 of securities pursuant to Section
					 25113(b)(2) shall
					 be reviewed and signed by each member of the board of directors of the small
					 company applicant. Any other application for the qualification of the offer and
					 sale of securities pursuant to Section
					 25102(c),
					 25111,
					 25112,
					 25113(b)(1),
					 25121 or
					 25131 of the Code should be signed
					 by an officer or general partner of the applicant; however, it may be signed by
					 another person holding a power of attorney for such purposes from the applicant
					 and, if signed on behalf of the applicant pursuant to such power of attorney,
					 should include as an additional exhibit a copy of said power of attorney or a
					 copy of the corporate resolution authorizing the person signing to act on
					 behalf of the applicant.
1. Amendment
					 and new NOTE filed 7-1-93; operative 7-1-93 (Register 93, No.
					 27).
Note: Authority cited: Section
						25610,
						Corporations Code. Reference: Sections
						25102(c),
						25111,
						25112,
						25113,
						25121
						and
						25131,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.110.3 - Incorporation by Reference

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In lieu of answering any specific item in any of the forms
					 in this Article, an applicant may incorporate the information called for by
					 reference to any attached document or to any document currently on file with
					 the Department. Such reference should indicate the pages or portion of the
					 document where the information is located.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.110.4 - Amendments to Applications

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An amendment to any application for qualification should
					 contain only the information being amended by item number and should be
					 verified in the form prescribed for the application. Each amendment should be
					 accompanied by a facing page in the form prescribed by Section
					 260.110 of these rules on which
					 the applicant shall insert the fact that the filing is an amendment and the
					 number of the amendment.
1. Amendment
					 filed 10-26-84; effective thirtieth day thereafter (Register 84, No.
					 43).
Note: Authority cited: Section
						25610,
						Corporations Code. Reference: Sections
						25160
						and
						25162,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.111.1 - Time for Filing Application

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The time provided in Section
					 25111(b) of the
					 Code for the filing of an application for qualification of the offer and sale
					 of securities by coordination, provided such application has been on file with
					 the Commissioner for at least ten business days, is hereby extended to permit
					 the filing of such application on or before the twentieth business day
					 following filing of the registration statement with the Securities and Exchange
					 Commission. This time may be further extended by order of the Commissioner with
					 respect to a particular application.
1. New
					 section filed 11-23-70 as an emergency; designated effective 11-23-70 (Register
					 70, No. 48).
2. Certificate of Compliance--Sec.
					 11422.1, Gov. Code, filed 12-9-70
					 (Register 70, No. 50).
Note: Authority cited: Sections
						25102(i),
						25104(h),
						25105,
						25111(b),
						25507(b)
						and
						25610,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.111.2 - Application by Certain Investment Companies. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 8-12-80 as an emergency; designated effective 9-8-80 (Register
					 80, No. 33). A Certificate of Compliance must be transmitted to OAL within 120
					 days or emergency language will be repealed on 1-7-81.
2. A
					 Certificate of Compliance was transmitted to OAL on 10-22-80 and filed on
					 11-21-80 (Register 80, No. 47).
3. Amendment filed 2-24-83;
					 effective thirtieth day thereafter (Register 83, No. 9).
4.
					 Amendment of subsection (a) filed 10-26-84; effective thirtieth day thereafter
					 (Register 84, No. 43).
5. Change without regulatory effect repealing
					 section filed 6-3-99 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 99, No. 23).
Note: Authority cited: Section
						25610,
						Corporations Code. Reference: Sections
						25111
						and
						25160,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.113.1 - Form U-7 Disclosure Document

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) General. For the purpose of Section
				  25113(b)(2)(E) of
				  the Code, the offering shall be made pursuant to a Small Corporate Offering
				  Registration Form (Form U-7), as adopted by the North American Securities
				  Administrators Association, Inc. (NASAA) on April 29, 1989, and pursuant to the
				  additional instructions of this rule.
(b) Additional Instructions. Notwithstanding
				  any NASAA instruction to the contrary, additional instructions for use of Form
				  U-7 are as follows:
1. The applicant must be a
				  California Corporation or a foreign corporation, which at the time of filing
				  the application is subject to Corporations Code Section
				  2115
				  irrespective of the notice filing requirement under Section
				  2108. In addition:
(1) the applicant shall not be a "blind pool
				  company," which is defined as a development stage company that either (i) has
				  no specific business plan or purpose or (ii) has indicated that its business
				  plan is to engage in mergers or acquisitions with unidentified companies or
				  other entities;
(2) the applicant
				  shall not be engaged in oil and gas exploration or production, or mining or
				  other extractive industries;
(3) the
				  applicant shall not be an investment company subject to the Investment Company
				  Act of 1940; and
(4) the applicant
				  shall not be subject to the reporting requirements of Sections
				  13 or
				  15(d) of the
				  Securities and Exchange Act of 1934.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.115 - "Issuer" of Notes Secured by Real Property

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A licensed real estate broker, a licensed finance lender,
					 or licensed industrial loan company who engages in the offer and sale of notes
					 secured by real property of various makers, which are a series of notes or
					 notes in which undivided interests are offered and sold, is the issuer of such
					 notes and undivided interests if the notes of the various makers are offered
					 and sold pursuant to a plan or arrangement which is common as to the various
					 makers with respect to documentation and loan standards and which includes
					 provisions for servicing such notes on behalf of the
					 purchasers.
1. New
					 section filed 8-27-81 as an emergency; effective upon filing (Register 81, No.
					 37).
2. Order of Repeal of 8-27-81 emergency order filed 9-4-81 by
					 OAL pursuant to Government Code Section
					 11349.6
					 (Register 81, No. 37).
3. New section filed 6-24-82; effective
					 thirtieth day thereafter (Register 82, No. 26).
4. Amendment filed
					 8-6-98; operative 9-5-98 (Register 98, No. 32).
Note: Authority cited: Section
						25610,
						Corporations Code. Reference: Sections
						25010
						and
						25115,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 3 - Procedure for Qualification › Section 260.131 - Application for Qualification of Nonissuer Transaction by Notification

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Application for the qualification of the offer and sale of
					 securities by notification in a nonissuer transaction pursuant to Section
					 25131 of the Code shall be made on
					 the following form:
(Department of Business Oversight Use
							 only)
DEPARTMENT OF BUSINESS OVERSIGHT FILE NO.
Fee Paid
___________________________
___________________________$_______________ Receipt
							 No.
(Insert file number of previous filing of issuer before the
							 Department, if any.)
___________________________Effective Date
FEE: $100.00
Date of Application: __________
DEPARTMENT OF BUSINESS OVERSIGHTSTATE OF
					 CALIFORNIAFACING PAGE FOR QUALIFICATION OF NONISSUER TRANSACTION BY
					 NOTIFICATION
NOTE: Indicate the type of filing by checking the
					 appropriate original or amendment application heading shown below.
[ ] APPLICATION FOR QUALIFICATION OF SECURITIES UNDER
					 SECTION 25131 OF THE CORPORATE SECURITIES
					 LAW OF 1968
[ ] AMENDMENT NUMBER __________ TO APPLICATION
DATED__________
(Check and complete if applicable)
___________________________
1. Name of issuer
___________________________
2.
(a)
				  Address of principal executive office of issuer.
Number and
							 Street
City
State
ZIP Code
_________________________________________________________
(b)
				  Is the principal location of applicant's books and records at the address of
				  the principal executive office, above? (Indicate "yes" or "no") If "no,"
				  provide address:
Number and
							 Street
City
State
ZIP Code
_________________________________________________________
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Section 260.140 - Application of Standards

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The standards set forth in this Article are intended to
					 furnish guidelines in the situations covered for the exercise of the
					 Commissioner's discretion relating to the qualification of the offer and sale
					 of securities, based upon the usual or typical circumstances encountered.
					 However, it is impossible to foresee or provide for all of the variant
					 circumstances which may exist in a particular case, and these standards are not
					 intended to preclude the application of more liberal or more stringent
					 standards if the circumstances justify in either an open or a limited offering
					 qualification (unless the contrary is expressly stated in these rules).
					 Standards relating to additional types of companies or offerings may be added
					 to this Article or may be dealt with in interpretive opinions or releases from
					 time to time as these are developed by experience or new problems are
					 encountered.
A variation from the standards stated in this Article will
					 be granted at the request of the applicant in the case of a limited offering
					 qualification if it is possible to find that the offer and sale will not be
					 unfair, unjust or inequitable to the initial purchasers upon the basis of all
					 of the facts and circumstances of the case. See Section
					 260.141.10 of these
					 rules.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Section 260.140.05 - Securities of Speculative Business

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An application for an open qualification
				  normally will not be approved if the business in which the issuer is engaged is
				  not reasonably anticipated to produce profits within a reasonable period of
				  time. A period of time not exceeding twenty-four months after the date of the
				  approval of the application is presumptively reasonable; however a longer
				  period of time may be authorized in light of the nature and circumstances of
				  the proposed business, including the operational norms for the industry in
				  which the business will operate.
(b) Any prospective financial information
				  that an applicant submits to demonstrate a reasonable anticipation of profits
				  shall be prepared by the issuer and based upon appropriate and reasonable
				  assumptions. The Department may require a specified level of service to be
				  performed by an independent certified public accountant in accordance with
				  standards established by the American Institute of Certified Public Accountants
				  ("AICPA") and that any such prospective financial information submitted by an
				  applicant be examined by an independent certified public accountant. The
				  specified level of service to be performed by an independent certified public
				  accountant may include:
(1) examination of
				  prospective financial statements, either forecasted or projected;
(2) compilation of prospective financial
				  statements, either forecasted or projected;
(3) performing feasibility studies;
(4) providing assistance in developing
				  forecasting systems; and
(5)
				  identifying factors to be considered in developing prospective financial
				  statements, forecasts and projections.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.1 - Voting Rights of Common Stock

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Common shares and similar equity securities should
						normally carry equal voting rights on all matters where such vote is permitted
						by applicable law.
1.
						Editorial correction deleting misplaced text and HISTORIES (Register 96, No.
						23).
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.2 - Voting Rights of Preferred Stock

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The charter documents of a corporation proposing to issue
						preferred shares (which are not participating and not convertible on a fair and
						equitable basis) without full voting rights shall provide that the holders of
						such preferred shares shall have the right to reasonable representation on the
						board of directors upon a cumulative default, whether consecutive or not, of
						eight quarterly dividends and that such right shall continue until the full
						payment of all arrears in dividends on such preferred shares. The right to
						elect a majority of the board is presumptively reasonable.
1.
						Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.3 - Protective Provisions for Preferred Shares

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The charter documents of a corporation proposing to issue
						preferred shares which are not participating and are not convertible on a fair
						and equitable basis shall provide reasonable protective provisions for the
						preferred shareholders, including where appropriate (a) a provision that the
						dividends on such shares shall be cumulative, (b) a provision prohibiting any
						dividends on common stock during the existence of any arrears on the preferred
						shares, (c) a requirement for the approval by the vote or written consent of a
						specified percentage of the preferred shares of any adverse change in the
						rights of such shares and of the issuance of any shares having priority over
						such preferred shares, and (d) dividend restrictions on the common
						stock.
1.
						Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.4 - Debt Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If nonconvertible debt securities are proposed to be
						issued, the indenture or other instrument pursuant to which they are issued
						should normally provide for the following:
(a) A sinking fund provision whereby all or a
					 reasonable portion of the issue is to be retired in installments prior to
					 maturity. The deferral of sinking fund payments and the amount of the balloon
					 payment at maturity which will be permitted will depend upon the financial
					 condition and other circumstances of the issuer.
(b) An appropriate negative pledge or equal
					 protection clause restricting the creation of liens on the property of the
					 issuer.
(c) If the debt is
					 unsecured, an appropriate restriction on the creation of other funded
					 debt.
(d) An appropriate
					 restriction on the payment of dividends upon stock of the issuer.
Such protective provisions will not be required in
						connection with debt securities having a rating or quality making such
						provisions unnecessary.
1.
						Amendment filed 2-2-83; effective thirtieth day thereafter (Register 83, No.
						6).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.5 - Trust Indentures

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An open qualification will not normally be approved for
						the issuance of debt securities unless they are issued under a trust indenture
						complying with the provisions of the Trust Indenture Act of 1939, whether or
						not the indenture is required to be qualified under that Act. A limited
						offering qualification may be approved for the issuance of debt securities
						which are not accompanied by a trust indenture or which are issued under a
						trust indenture not complying with all of the provisions of the Trust Indenture
						Act of 1939, if the trust indenture or other instruments provide adequate
						protection to the holders of the debt securities under the circumstances of the
						particular case. The indenture should provide that the trustee or a co-trustee
						must be a bank or trust company, or if a bank or trust company is not a trustee
						or co-trustee that any person who is to act in that capacity must have the
						written approval of the Commissioner.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.6 - Convertible Senior Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If preferred or debt securities are proposed to be issued
						which are convertible, or are proposed to be issued in units with warrants or
						options (whether or not severable), the conversion rights, options or warrants
						(as the case may be) must be fair and equitable under the circumstances and
						should normally contain an appropriate antidilution provision providing for an
						adjustment of the number of shares into which such shares or units are
						convertible, or of the number of shares purchasable pursuant to such options or
						warrants, upon any stock split or stock dividend or other recapitalization of
						the issuer. Provision may also be made for a similar adjustment upon the
						issuance of additional shares of the class issuable upon conversion, or
						purchasable upon exercise, by the issuer for a consideration less than the
						conversion price or the exercise price of the options or warrants (as the case
						may be) or less than the then current market price for the class so
						issuable.
1.
						Amendment filed 2-2-83; effective thirtieth day thereafter (Register 83, No.
						6).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.7 - Assessments

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Securities should be nonassessable, except that issuers
						organized solely to supply services or property to their members on a
						continuing basis may provide for an equitable assessment corresponding to the
						services or property supplied.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.8 - Restrictions on Transfer

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
					 No open qualifications will be approved to issue securities if the transfer of
					 the securities is subject to any restrictions imposed by the issuer's charter
					 documents, indenture agreements or other instruments or agreements under which
					 the securities are to be issued.
(b) Limited offering qualifications may be
					 approved to issue securities subject to transfer restrictions if the
					 restrictions do not unfairly prejudice the opportunity of the holder(s) to
					 receive the fair value of the securities (Section
					 260.140.50).
(1) Provisions are presumptively reasonable
					 when there is no third-party offeror and the holder(s) desires to sell, if the
					 provisions base the price at which the issuer or other holder(s) may purchase
					 the securities upon either:
(A) an
					 independent appraised value; or
(B)
					 the book value of the securities (unless the business is one where the book
					 value is not a significant indication of value).
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.9 - Capital Structure of Unseasoned Corporations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Unseasoned corporations selling securities pursuant to an
						open qualification shall have a capital structure consisting of only common
						stock, or of common stock and preferred stock or debt which is convertible into
						common stock on a fair and equitable basis or is fully-participating and
						non-redeemable. A limited offering qualification may be approved for an
						unseasoned corporation to sell nonconvertible and nonparticipating senior
						securities if they are to be issued to the holders of the residual equity
						securities on a pro rata basis or if the circumstances otherwise
						justify.
1.
						Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 1 - Rights of Security Holders › Section 260.140.10 - Capital Structure of Seasoned Corporations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A seasoned corporation proposing to sell securities which
						are nonparticipating and nonconvertible on a fair and equitable basis must show
						its ability to meet the proposed dividend, interest and sinking fund
						requirements on all of its securities outstanding and proposed to be issued
						based upon its previous earnings or cash-flow history or demonstrated future
						earning or cash-flow capacity.
1.
						Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 2 - Selling Expenses and Options to Underwriters › Section 260.140.21 - Options to Underwriters

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Options granted by the issuer to underwriters or other
						persons as compensation, in whole or in part, for the sale of securities must
						be reasonable in amount and in terms and conditions under the circumstances of
						the particular issue. Options which meet the following requirements are
						presumptively reasonable:
(a) The
					 number of shares or units called for by such options does not exceed ten per
					 cent of the number of shares or units underwritten for the issuer in the
					 offering.
(b) The options do not
					 exceed five years in total duration.
(c) The options are exercisable at an
					 exercise price which is initially not less than the public offering price of
					 the securities underwritten and the options provide for an increase of the
					 exercise price by seven percent of the initial exercise price for each full
					 year such options are outstanding; or the options are exercisable at a price
					 which is not less than 120 percent of the public offering price of the
					 securities underwritten.
(d) The
					 options are not deliverable to the underwriters until the entire issue has been
					 sold, whether it is underwritten on a firm commitment or a best-efforts
					 arrangement.
(e) The options are
					 nontransferable other than by will or pursuant to the laws of descent and
					 distribution, except to a partner of the underwriter when the underwriter is a
					 partnership or to a stockholder, officer or director of the underwriter or
					 beneficiary of a trust which is a stockholder of such underwriter when the
					 underwriter is a corporation; however, after one year such a transfer may occur
					 providing the option is exercised immediately upon transfer. If not exercised
					 immediately upon transfer, the option shall lapse.
(f) Either the exercise of the options, or
					 the resale, transfer and assignment of the shares underlying the options, is
					 prohibited for a period of at least one year from the date of the
					 offering.
1.
						Amendment of subsection (f) filed 5-14-69; effective thirtieth day thereafter
						(Register 69, No. 20).
2. Amendment filed 9-19-73; effective
						thirtieth day thereafter (Register 73, No. 38).
3. Amendment filed
						5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 2 - Selling Expenses and Options to Underwriters › Section 260.140.22 - Nonissuer Transactions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An issuer should not normally pay or assume any liability
						for expenses, including options to underwriters, incurred in connection with
						the sale of securities made by or on behalf of a selling security holder,
						whether or not such expenses constitute selling expenses as defined in Section
						260.140.20 of these rules, except
						that the issuer may:
(a) Provide for
					 services customarily rendered to all security holders in connection with the
					 transfer of securities, including the services of transfer agents and
					 registrars;
(b) Provide audited
					 financial statements if such statements are needed by the issuer for its own
					 purposes; and
(c) Pay all expenses
					 in connection with the sale of securities.
(1)
					 made by a person who purchased such securities from the issuer pursuant to an
					 arm's-length agreement which required the issuer to pay such expenses in the
					 event of a resale by the original purchaser, or made by a transferee of such
					 purchaser, or
(2) made by a
					 security holder where there is no preexisting public market and the other
					 shareholders consent to such payment.
When an offering is made simultaneously by an issuer and
						one or more of its security holders, the expenses, except as provided above,
						should be apportioned among the issuer and the selling security holders in
						accordance with the aggregate offering price of the securities being sold by
						each party.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 3 - Promotional Shares › Section 260.140.30 - Promotional Shares Defined

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
"Promotional shares" means any securities which are (a)
						issued in consideration for services rendered in connection with the founding
						or organizing of a business enterprise, or (b) issued to a promoter in
						consideration for any tangible or intangible property, such as patents,
						copyrights or goodwill, to the extent that the value has not been
						satisfactorily established, or (c) issued to a promoter in the recent past or
						proposed to be issued at a price substantially lower than the price at which
						other securities of the same class or substantially similar class have been or
						are to be sold without any change in the conditions of the market or in the
						circumstances of the issuer which would justify such different
						price.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 3 - Promotional Shares › Section 260.140.31 - Amount of Promotional Shares

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In connection with the financing of an
					 unseasoned corporation, a number of promotional shares (considered in
					 conjunction with any selling expenses paid to promoters) may be issued which is
					 not unreasonable. A number of promotional shares which does not exceed 25% of
					 all of the common shares issued and proposed to be issued by the corporation is
					 presumptively reasonable. However, additional promotional shares may be
					 authorized in the light of the services rendered and other consideration given
					 to the corporation by the promoters, the nature and circumstances of the
					 business enterprise being promoted, and the identity of the
					 investors.
(b) Where the issuer is
					 a small business issuer and meets the conditions for filing under Section
					 25113(b)(2), a
					 number of promotional shares which does not exceed 50% of all of the common
					 shares issued and proposed to be issued by the corporation is presumptively
					 reasonable.
(c) Normally, no
					 promotional shares may be issued in connection with the financing of a seasoned
					 corporation.
1. New
						subsection (a) and (c) designators, new subsection (b) and new NOTE filed
						12-19-95; operative 1-18-96 (Register 95, No.
						51).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Sections
						  25113(b)(2)
						  and
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 3 - Promotional Shares › Section 260.140.32 - Rights of Promotional Shares

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Promotional shares shall be equity securities without
						preference as to dividends, assets, or voting rights and shall have no greater
						rights per share than the securities issued for cash or its equivalent.
						Normally promotional shares should be subject to the waivers of dividends and
						assets as provided in Section
						260.141 of these rules and to the
						legend condition restricting their transfer as provided in Section
						260.141.1 of these
						rules.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 3 - Promotional Shares › Section 260.140.33 - Reimbursement to Promoters

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A promoter may be reimbursed for actual and necessary
						expenses paid to found a business and offer its securities. Selling expenses
						are subject to the limitation contained in Section
						260.140.20 of these rules,
						however.
1.
						Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.40 - PRO Rata Rights to Shareholders

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Rights may be issued to all of the shareholders of an
						issuer (or all the holders of a particular class of stock) to purchase
						additional shares on a pro rata basis and having a term of no more than 90 days
						following the date of issuance, provided the exercise price is not so low in
						relation to the price as calculated in Section
						260.140.50 of these rules as to be
						unreasonably prejudicial to those shareholders unable to exercise or sell their
						rights and provided that the relative equity positions of different classes of
						outstanding shares shall not be unfairly prejudiced thereby. An exercise price,
						which is not more than 15% below the price as calculated in Section
						260.140.50, is presumptively
						reasonable under this section. Such rights to shareholders shall be freely
						transferable.
1.
						Amendment filed 5-3-83; effective thirtieth day thereafter (Register 83, No.
						19).
2. Amendment filed 2-11-85; effective thirtieth day thereafter
						(Register 85, No. 7).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.41 - Compensatory Option Plans

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Options granted to employees [including insurance agents
						who are employees for purposes of Rule 701(c) under the Securities Act of 1933,
						as amended (17 C.F.R.
						230.701(c)], officers,
						directors, general partners, trustees (where the issuer is a business trust),
						managers, advisors or consultants of the issuer, its parents, its
						majority-owned subsidiaries or majority-owned subsidiaries of the issuer's
						parent as part of a compensatory benefit plan shall be pursuant to a plan or
						agreement that provides for all of the following:
(a) The total number of securities (which may
					 be expressed as a specific number of securities or as a percentage of the total
					 number of securities outstanding from time to time) which may be issued and the
					 persons eligible to receive options to purchase these securities.
(b) An exercise period of not more than 120
					 months from the date the option is granted.
(c) The non-transferability of the options,
					 provided that the plan or agreement may permit transfer by will, by the laws of
					 descent and distribution, to a revocable trust, or as permitted by Rule 701 of
					 the Securities Act of 1933, as amended (17 C.F.R. 230.701).
(d) The proportionate adjustment of the
					 number of securities purchasable and the exercise price thereof under the
					 option in the event of a stock split, reverse stock split, stock dividend,
					 recapitalization, combination, reclassification or other distribution of the
					 issuer's equity securities without the receipt of consideration by the issuer,
					 of or on the issuer's class or series of securities underlying the
					 option.
(e) Unless employment is
					 terminated for cause as defined by applicable law, the terms of the plan or
					 option grant or a contract of employment, the right to exercise in the event of
					 termination of employment, to the extent that the optionee is entitled to
					 exercise on the date employment terminates, continues until the earlier of the
					 option expiration date or:
(1) At least 6
					 months from the date of termination if termination was caused by death or
					 disability.
(2) At least 30 days
					 from the date of termination if termination was caused by other than death or
					 disability.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.41.1 - Employee Options Other than Qualified Stock Options. [Renumbered]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
						section filed 7-20-72; effective thirtieth day thereafter (Register 72, No.
						30).
2. Renumbering and amendment of Section
						260.140.41.1 to Section
						260.140.42 filed 5-3-83; effective
						thirtieth day thereafter (Register 83, No.
						19).
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.41.2 - Information to Employees. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
						section filed 10-20-83; effective thirtieth day thereafter (Register 83, No.
						43).
2. Repealer filed 12-5-91; operative 1-6-92 (Register 92, No.
						9).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.43 - Warrants to Purchasers of Debt Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Warrants to purchase equity securities may be issued to
						the purchasers of debt securities provided their issuance is necessary in order
						to obtain the debt financing and provided further:
(a) the term of the warrant does not exceed
					 the life of the debt securities or 15 years, whichever is less;
(b) the number of shares of equity securities
					 issuable upon exercise of the warrants does not exceed the number that could be
					 purchased at the exercise price with the debt securities at face amount;
					 and
(c) the exercise price is at
					 least equal to the value of the equity securities calculated in the manner
					 described in Section
					 260.140.50 of these rules on the
					 date the warrant is issued.
1.
						Renumbering and amendment of former Section
						260.140.43 to Section
						260.140.44, and renumbering and
						amendment of former Section
						260.140.42 to Section
						260.140.43 filed 5-3-83; effective
						thirtieth day thereafter (Register 83, No. 19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 4 - Rights, Warrants and Options › Section 260.140.44 - Warrants to Purchasers of Equity Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Warrants to purchase equity securities may be issued to
						purchasers of equity securities provided their issuance is necessary to obtain
						the equity financing, and provided further that the term of the warrant does
						not exceed 5 years, the number of equity securities issuable upon exercise of
						the warrants does not exceed the number of equity securities purchased together
						with the warrants and the exercise price is at least equal to the value of the
						equity securities calculated in the manner described in Section
						260.140.50 of these rules at the
						date the warrant is issued.
1.
						Renumbering and amendment of former Section
						260.140.44 to Section
						260.140.45, and renumbering and
						amendment of former Section
						260.140.43 to Section
						260.140.44 filed 5-3-83; effective
						thirtieth day thereafter (Register 83, No. 19).
Note: Authority cited: Section
						  25610,
						  Corporations Code. Reference: Section
						  25140,
						  Corporations Code.