(a) Audited financial statements. Except as provided
in subsection (b) of this section, all financial statements submitted
to the Securities Commissioner pursuant to the Texas Securities Act, §§4003.002,
4003.003 or 4003.004 (including all financial statements of the issuer
and any entity that is being taken over by an issuer which has not
been operating) must be audited, and an opinion must be expressed
by an independent certified public accountant or an independent public
accountant. Such opinion shall be one acceptable to the Commissioner.
(b) Reviewed financial statements. Financial statements,
prepared in accordance with generally accepted accounting principles,
submitted by a small business issuer in connection with a small business
offering may be reviewed by an independent certified public accountant
in accordance with the standards for reviewed financial statements
promulgated by the American Institute of Certified Public Accountants.
(c) Small business issuer. For purposes of subsection
(b) of this section, the term "small business issuer" shall mean any
corporation:
(1) that has not previously sold securities by means
of an offering involving public solicitation or advertising unless
such offering was made in compliance with:
(A) former §139.25 of this title (relating to
Intrastate Crowdfunding Exemption);
(B) §139.26 of this title (relating to Intrastate
Crowdfunding Exemption for SEC Rule 147A Offerings);
(C) §139.16 of this title (relating to Sales to
Individual Accredited Investors);
(D) §139.19 of this title (relating to Accredited
Investor Exemption);
(E) §109.4 of this title (relating to Securities
Registration Exemption for Sales to Financial Institutions and Certain
Institutional Investors); or
(F) the Texas Securities Act, §4005.011;
(2) that has not been previously required under federal
or state securities law to provide audited financial statements in
connection with any sale of its securities;
(3) that is not an investment company (including any
mutual fund);
(4) that does not engage or propose to engage in petroleum
exploration or production or other extractive industries;
(5) that is not subject to the reporting requirements
of the Securities Exchange Act of 1934, §13 or §15(d);
(6) that has its principal place of business in Texas
and employs at least 50% of its full-time employees in Texas; and
(7) whose previous sales of securities (exclusive of
debt financing with banks and similar commercial lenders) does not
exceed $1 million.
(d) Parent corporations. If a corporation otherwise
meeting the criteria specified in subsection (c) of this section is
a majority-owned subsidiary of another corporation, the subsidiary
shall not be considered a "small business issuer" for purposes of
subsection (b) of this section unless its parent corporation also
meets the criteria specified in subsection (c) of this section.
(e) Small business offering. For purposes of subsection
(b) of this section, the term "small business offering" shall mean
that the amount of the offering must not exceed $5 million.
|
Source Note: The provisions of this §113.5 adopted to be effective January 1, 1976; amended to be effective November 28, 1977, 2 TexReg 4414; amended to be effective September 22, 1995, 20 TexReg 7188; amended to be effective December 6, 1998, 23 TexReg 12293; amended to be effective January 8, 2006, 30 TexReg 8865; amended to be effective November 17, 2014, 39 TexReg 8960; amended to be effective December 23, 2018, 43 TexReg 8088; amended to be effective April 7, 2024, 49 TexReg 2062 |