Washington Administrative Code › Title 460 - Financial Institutions, Department of (Securities Division) › Chapter 460-44A - Exempt transactions › Section 460-44A-504 - Exemption for limited offers and sales of securities not exceeding $1,000,000 to not more than twenty purchasers

Current through Register Vol. 24-14, July 15, 2024
(1) Exemption. Offers and sales of securities
			 by an issuer in compliance with the Securities Act of 1933, Regulation D, Rules
			 230.501 through 230.504 and 230.508 as made effective in Release No. 33-6389,
			 and as amended in Release Nos. 33-6437, 33-6663, 33-6758, 33-6825, 33-6863,
			 33-6949, 33-6996, 33-7300, 33-7644, and 33-8891, or in compliance with the
			 Securities Act of 1933, Rule 230.147 as made effective in Release No. 33-5450,
			 or in compliance with Securities Act of 1933, Rule 230.147A as made effective
			 in Release Nos. 33-10238 and 34-79161, that satisfy the conditions in
			 subsections (2) and (3) of this section shall be exempt under
			 RCW
			  21.20.320(9).
(2) General conditions to be met. To qualify
			 for exemption under this section, offers and sales must satisfy all the terms
			 and conditions of WAC
			 460-44A-501
			 through
			 460-44A-503
			 and
			 460-44A-508.
(3) Specific conditions to be met.
(a) Limitation on aggregate offering price.
			 The aggregate offering price for an offering of securities under this section,
			 as defined in WAC
			 460-44A-501(3),
			 shall not exceed $1,000,000, within or without this state, less the aggregate
			 offering price for all securities sold within the twelve months before the
			 start of and during the offering of securities under this section in reliance
			 on any exemption under
			 RCW
			  21.20.320(9) or sections 3
			 (a)(11) or 3(b) of the Securities Act of 1933 or in violation of
			 RCW
			  21.20.140 or section 5(a) of the Securities
			 Act of 1933.
(b) No commissions. No
			 commission, fee, or other remuneration shall be paid or given, directly or
			 indirectly, to any person for soliciting any prospective purchaser in the state
			 of Washington.
(c) Limitation on
			 number of purchasers. There are no more than or the issuer reasonably believes
			 that there are no more than twenty purchasers of securities in this state from
			 the issuer in any offering in reliance on this section.
(d) In all sales to nonaccredited investors
			 in this state under this section the issuer and any person acting on its behalf
			 shall have reasonable grounds to believe and after making reasonable inquiry
			 shall believe that, as to each purchaser, one of the following conditions, (i)
			 or (ii) of this subsection, is satisfied:
(i)
			 The investment is suitable for the purchaser upon the basis of the facts, if
			 any, disclosed by the purchaser as to his other security holdings and as to his
			 financial situation and needs. For the purpose of this condition only, it may
			 be presumed that if the investment does not exceed ten percent of the
			 purchaser's net worth, it is suitable. This presumption is rebuttable;
			 or
(ii) The purchaser either alone
			 or with his purchaser rep-resentative(s) has such knowledge and experience in
			 financial and business matters that he is or they are capable of evaluating the
			 merits and risks of the prospective investment.
(e) Disqualifications. No exemption under
			 this section shall be available for the securities of any issuer if any of the
			 parties described in the Securities Act of 1933, Regulation A, Rule 230.262 is
			 disqualified for any of the reasons listed in Securities Act of 1933,
			 Regulation D, Rule 230.506(d) or WAC
			 460-17A-040.
(f) Notice filing. The issuer shall file a
			 notice, with a consent to service of process, and pay a filing fee as set forth
			 in WAC
			 460-44A-503.
(g) Advice about the limitations on resale.
The issuer, at a reasonable time prior to the sale of
				securities, shall advise each purchaser of the limitations on resale in the
				manner contained in WAC
				460-44A-502(4)(b).