Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 1 - Banking, Securities, Small Loans and Corporations › Chapter 08 - Securities › Article 2 - Registration and Notice of Securities › 3 AAC 08.130 - Maximum commissions and expenses

Current through May 31, 2024
(a) The
				  administrator will, in the administrator's discretion, disallow an offer or
				  sale of securities if the underwriting expenses to be incurred exceed 17
				  percent of the gross proceeds from the public offering.
(b) Underwriting expenses consist of
(1) commissions to underwriters or
				  broker-dealers;
(2) non-accountable
				  fees or expenses to be paid to the underwriter or broker-dealer;
(3) underwriter's warrants and options;
				  underwriter's warrants and options must be valued as follows:
(A) the warrant value is calculated using the
				  following formula: warrant value = [165 % x (aggregate offering price)] -
				  [(exercise price) x (number of shares offered to the public)] 2} x [(number of
				  shares underlying the warrant) (number of shares offered to the
				  public)]
(B) the value calculated
				  under (A) of this paragraph is reduced by 20 percent if the exercise period of
				  the warrants is extended from one year after the public offering to two years
				  after the public offering and by 40 percent if the exercise period of the
				  warrants is extended from one year after the public offering to three years
				  after the public offering; a reduction under this subparagraph applies if the
				  warrants granted to underwriters are subject to the following restrictions:
(i) the underwriter must be a managing
				  underwriter;
(ii) the public
				  offering must be either a firmly underwritten offering or a "minimum-maximum"
				  offering, and options or warrants may be issued in a "minimum-maximum" public
				  offering only if the options or warrants are issued on a pro rata basis and the
				  minimum amount of securities has been sold;
(iii) the exercise price of the warrants must
				  be at least equal to the public offering price;
(iv) the number of shares covered by
				  underwriter's options or warrants may not exceed 10 percent of the shares of
				  common stock actually sold in the public offering;
(v) the life of the options or warrants may
				  not exceed a period of five years from the completion date of the public
				  offering;
(vi) the options or
				  warrants may not be exercisable for the first year after the completion date of
				  the public offering;
(vii) options
				  or warrants may not be transferable, except to partners of the underwriter, if
				  the underwriter is a partnership, to officers and employees of the underwriter
				  who are also shareholders of the underwriter, if the underwriter is a
				  corporation, by will, under the laws of descent and distribution, or by the
				  operation of law;
(viii) the
				  warrant agreement may not allow for a reduction in the exercise price of the
				  options or warrants resulting from a subsequent issuance of shares by the
				  issuer except if that issuance is under a stock dividend or stock split,
				  merger, consolidation, reclassification, reorganization, recapitalization, or
				  sale of assets;
(C) in
				  this paragraph, "aggregate offering price" means the sum of all cash and other
				  consideration to be received for issuance of the securities;
(4) rights of first refusal,
				  rights of first refusal must be valued at
(A)
				  one percent of the public offering; or
(B) the amount payable to the underwriter if
				  the issuer terminates the right of first refusal;
(5) solicitation fees payable to the
				  underwriter; solicitation fees must be valued at the lesser of
(A) actual cost; or
(B) one percent of the public offering, if
				  the fees are payable within one year of the offering;
(6) financial consulting or financial
				  advisory agreements with an underwriter or any other similar type of agreement
				  or fee, however designated; those agreements must be valued at actual
				  cost;
(7) expenses that the
				  underwriter incurs to meet due diligence obligations;
(8) payments either made within six months
				  before or required to be made within six months after the public offering to
				  investor relations firms designated by the underwriter; and
(9) other underwriting expenses incurred in
				  connection with the public offering of securities as determined by the
				  administrator.