N.J. Admin. Code § 13:47A-12A.2

Current through Register Vol. 56, No. 24, December 18, 2024

Section 13:47A-12A.2 - Offering conditions to qualify for intrastate offering (crowdfunding) exemption; disqualifying criteria

(a) For an offering to qualify for the transaction exemption set forth in N.J.S.A. 49:3-50(b)(14), the following conditions shall be met:

1. The issuer is a business entity organized under the laws of this State and authorized to do business in this State;

2. The transaction meets the requirements for the Federal exemption for intrastate offerings in section 3(a)(11) of the Federal Securities Act of 1933 (15 U.S.C. § 77c(a)(11)), and Rule 147 adopted under the Securities Act of 1933 (17 CFR 230.147);

3. The sum of all cash and other consideration to be received for all sales of the security in reliance on the exemption under N.J.S.A. 49:3-50(b)(14), excluding sales to any accredited investor or institutional investor, does not exceed $ 1,000,000;

i. An offer or sale to an officer, director, partner, trustee, or individual occupying similar status or performing similar functions with the issuer or to a person owning 10 percent or more of the outstanding securities of the issuer shall not be counted toward the aggregate monetary limitation of shares to be issued as established in this paragraph;

4. The offering is not a blind pool;

5. The offering by the issuer is made exclusively through a single Internet site operator that meets the requirements of N.J.A.C. 13:47A-12A.4;

6. The issuer does not accept an investment of more than $ 5,000 from any single investor, unless the investor is an accredited investor or institutional buyer;

7. The investor in the security is a resident of this State;

i. The Bureau shall deem as sufficient evidence that a prospective investor is a New Jersey resident an affirmative representation made by the prospective investor that the prospective investor is a New Jersey resident; and

(1) For an individual, one of the following:

(A) A property tax bill, deed, lease, and other evidence of current property ownership, tenancy, or residency;

(B) A valid New Jersey driver license or official non-driver personal identification card issued by the State of New Jersey; or

(C) A current utility bill;

(2) For an entity, documentation evidencing that the entity's principle place of business is in New Jersey.

8. The issuer has never previously sold securities pursuant to N.J.S.A. 49:3-50(b)(14); and

9. The issuer shall comply with the exemption filing requirements set forth in N.J.A.C. 13:47A-12A.3.

(b) An issuer shall not claim the exemption from registration pursuant to N.J.S.A. 49:3-50(b)(14) if the issuer or any predecessor of the issuer, officer, director, partner, trustee, or individual occupying similar status or performing similar functions with the issuer, or a person owning 10 percent or more of the outstanding securities of the issuer is subject to any of the following disqualifying events:

1. Criminal convictions in connection with the purchase or sale of a security, or involving the making of a false filing related to the offer or sale of a security;

2. Injunctions and court orders against engaging in or continuing conduct or practices in connection with the purchase or sale of securities or involving the making of a false filing related to the offer or sale of a security or any criminal conviction as described in N.J.S.A. 49:3-56(k);

3. United States Postal Service false representation orders; and

4. The issuer or any predecessor of the issuer, officer, director, partner, trustee, or individual occupying similar status or performing similar functions with the issuer, or a person owning 10 percent or more of the outstanding securities of the issuer is subject to a Bureau stop order.

N.J. Admin. Code § 13:47A-12A.2

Adopted by 48 N.J.R. 1964(a), effective 9/19/2016

Adopted by 49 N.J.R. 2538(b), effective 8/7/2017