Securities Lawyer's Deskbook
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General Rules and Regulations
under the
Securities Act of 1933

Rule 1001 -- Exemption for Transactions Exempt from Qualification Under Sec. 25102(n) of the California Corporations Code

Preliminary Notes:
  1. Nothing in this section is intended to be or should be construed as in any way relieving issuers or persons acting on behalf of issuers from providing disclosure to prospective investors necessary to satisfy the antifraud provisions of the federal securities laws. This section only provides an exemption from the registration requirements of the Securities Act of 1933 ("the Act").

  2. Nothing in this section obviates the need to comply with any applicable state law relating to the offer and sales of securities.

  3. Attempted compliance with this section does not act as an exclusive election; the issuer also can claim the availability of any other application exemption.

  4. This exemption is not available to any issuer for any transaction which, while in technical compliance with the provision of this section, is part of a plan or scheme to evade the registration provisions of the Act. In such cases, registration under the Act is required.

  1. Exemption.Offers and sales of securities that satisfy the conditions of paragraph (n) of Sec. 25102 of the California Corporations Code, and paragraph (b) of this section, shall be exempt from the provisions of Section 5 of the Securities Act of 1933 by virtue of Section 3(b) of that Act.

  2. Limitation of and computation of offering price.The sum of all cash and other consideration to be received for the securities shall not exceed $5,000,000, less the aggregate offering price for all other securities sold in the same offering of securities, whether pursuant to this or another exemption.

  3. Resale limitations.Securities issued pursuant to this rule are deemed to be "restricted securities" as defined in Securities Act Rule 144. Resales of such securities must be made in compliance with the registration requirements of the Act or an exemption therefrom.

Regulatory History

61 FR 21356, 21359, May 9, 1996

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