(3) A development stage company that either has no specific business
plan or purpose or has indicated that its
business plan is to engage in a merger or acquisition with an
unidentified company or companies, or other entity or person, shall be exempt from the provision of section 5 of the Act under section 3(b) of the
(b)Conditions to be met—(1) General conditions. To qualify for exemption
under this § 230.504, offers and sales must
satisfy the terms and conditions of §§ 230.501 and
230.502 (a), (c) and (d), except that the provisions of § 230.502 (c) and (d) will not apply to offers and sales of securities under this § 230.504 that are made:
(i) Exclusively in one or more states that provide for the registration of
the securities, and require the public filing and delivery to investors of a
substantive disclosure document before sale, and are made in accordance with
those state provisions;
(ii) In one or more states that have no provision for the registration of the
securities or the public filing or delivery of a disclosure document before
sale, if the securities have been registered in at least one state that provides for such registration, public filing
and delivery before sale, offers and sales are made in that state in accordance with such provisions, and the
disclosure document is delivered before sale to all purchasers (including
those in the states that have no such procedure); or
(iii) Exclusively according to state law exemptions from registration that permit
general solicitation and general advertising so long as sales are made only
to “accredited investors” as defined in § 230.501(a).
The calculation of the aggregate offering price is illustrated as follows:
If an issuer sold $900,000 on June 1, 1987 under this § 230.504 and an additional $4,100,000 on December 1, 1987 under § 230.505, the issuer could not sell any of its securities under this
§ 230.504 until December 1, 1988. Until then the issuer must count the December 1, 1987 sale towards the
$1,000,000 limit within the preceding twelve months.
If a transaction under § 230.504 fails to meet the limitation on the aggregate offering price, it does not affect the availability of
this § 230.504 for the other transactions considered in applying such limitation.
For example, if an issuer sold $1,000,000 worth of its securities on January
1, 1988 under this § 230.504 and an additional $500,000 worth on July 1, 1988, this § 230.504 would not be available for the later sale, but would still be
applicable to the January 1, 1988 sale.