Virginia Administrative Code › Title 21 - SECURITIES AND RETAIL FRANCHISING › Agency 5 - STATE CORPORATION COMMISSION › Chapter 40 - EXEMPT SECURITIES AND TRANSACTIONS › Section 21VAC5-40-20 - Exchange and automated quotations system

Current through Register Vol. 40, No. 24, July 15, 2024
In accordance with § 13.1-514A 12 of the Act, the
				  National Association of Securities Dealers Automated Quotations System (NASDAQ)
				  is approved by the commission; provided, however, that the securities for which
				  the NASDAQ exemption is being claimed, and the issuer of such securities, meet
				  the following conditions:
1. If the
				issuer is not organized under the laws of the United States or a state, it has
				appointed a duly authorized agent in the United States for service of process
				and has set forth the name and address of such agent in its
				prospectus.
2. A class of the
				issuer's securities is required to be and is registered under § 12 of the
				Securities Exchange Act of 1934, and has been so registered for the three years
				immediately preceding the offering date.
3. Neither the issuer nor a significant
				subsidiary has had a material default during the last seven years (or the
				issuer's existence if less than seven years) in the payment of (i) principal,
				interest, dividend, or sinking fund installment on preferred stock or
				indebtedness for borrowed money, or (ii) rentals under leases with terms of
				three years or more.
4. The issuer
				has had consolidated net income (before extraordinary items and the cumulative
				effect of accounting changes) of at least $1 million in four of its last five
				fiscal years including its last fiscal year; and if the offering is of interest
				bearing securities, has had for its last fiscal year, such net income, but
				before deduction for income taxes and depreciation, of at least one and
				one-half times the issuer's annual interest expense, giving effect to the
				proposed offering and the intended use of the proceeds. "Last fiscal year"
				means the most recent year for which audited financial statements are
				available, provided that such statements cover a fiscal period ended not more
				than 15 months prior to the commencement of the offering.
5. If the offering is of stock or shares,
				other than preferred stock or shares, such securities have voting rights and
				such rights include (i) the right to have at least as many votes per share, and
				(ii) the rights to vote on at least as many general corporate decisions, as
				each of the issuer's outstanding classes of stock or shares, except as
				otherwise required by law.
6. If
				the offering is of stock or shares, other than preferred stock or shares, such
				securities are owned beneficially or of records, on any date within six months
				prior to the commencement of the offering, by at least 1,200 persons, and on
				such date there are at least 750,000 such shares outstanding with an aggregate
				market value, based on the average bid price for that day, of at least
				$3,750,000. In connection with the determination of the number of persons who
				are beneficial owners of the stock or shares of an issuer, the issuer or
				broker-dealer may rely in good faith for the purposes of this section upon
				written information furnished by the record owners.
7. Any securities issued or guaranteed as to
				both principal and interest by an international bank of which the United States
				is a member is so exempted without regard to the conditions in this
				section.
8. If the offering is of
				interest bearing securities of a finance company with liquid assets of at least
				105% of its liabilities (other than deferred income taxes, deferred investment
				tax credits, capital stock and surplus) at the end of each of its last five
				fiscal years, the applicable net income requirement of subdivision 4 of this
				section, but before deduction for interest expense, shall be one and
				one-quarter times the issuer's annual interest expense. "Finance company" means
				a company engaged primarily in the business of wholesale, retail, installment,
				mortgage, commercial, industrial or consumer financing, banking or factoring.
				"Liquid assets" means cash, receivables payable on demand or not more than 12
				years following the close of the company's last fiscal year, and readily
				marketable securities, in each case less applicable reserves and unearned
				income.
Statutory Authority
§§ 12.1-13 and 13.1-523 of the Code of Virginia.