| (A) There is no ready market for the sale of the securities
acquired from this offering; it may be difficult or impossible for
an investor to sell or otherwise dispose of this investment. An investor
may be required to hold and bear the financial risks of this investment
indefinitely;
(B) The securities have not been registered under federal
or state securities laws and, therefore, cannot be resold unless the
securities are registered or qualify for an exemption from registration
under federal and state law;
(C) In making an investment decision, investors must
rely on their own examination of the issuer and the terms of the offering,
including the merits and risks involved; and
(D) No federal or state securities commission or regulatory
authority has confirmed the accuracy or determined the adequacy of
the disclosure statement or any other information on this Internet
website.
(3) Financial statements. Issuers must provide current
financial statements certified by the principal executive officer
to be true and complete in all material respects. If the issuer has
audited or reviewed financial statements, prepared within the last
three years, such financial statements must also be provided to investors.
(i) Notice filing. Before using any publicly available
Internet website in an offering of securities in reliance on this
section, the issuer shall file with the Securities Commissioner:
(1) Form 133.21, Crowdfunding Exemption Notice;
(2) the disclosure statement, required by subsection
(h) of this section;
(3) the summary of the offering, required by subsection
(g)(2)(B) of this section; and
(4) if investor funds are to be deposited into a segregated
account as permitted by subsection (e) of this section, a copy of
the written Account Agreement entered into between the issuer and
the registered general dealer or Texas crowdfunding portal that will
hold investor funds in the securities offering.
(j) Commissions and remuneration. A commission or other
remuneration shall not be paid or given, directly or indirectly, for
the offer or sale of the securities unless the person receiving such
compensation is registered in Texas as a dealer or agent or as a Texas
crowdfunding portal. The issuer may not list its securities on the
Internet website of a general dealer or portal that holds an interest
in the issuer. The issuer may not compensate a general dealer or a
portal by providing a financial interest in the issuer as compensation
for services provided to or on behalf of the issuer. A general dealer
or portal may not be affiliated with or under common control with
an issuer whose securities appear on its Internet website. Nothwithstanding
the foregoing, a Registered Small Business Development Entity, as
defined in §115.20 of this title (relating to Texas Crowdfunding
Portal Registration and Activities of Small Business Development Entities),
may have a financial interest in an issuer listed on its Crowdfunding
Web Portal, as defined in §115.20.
(k) Disqualifications.
(1) For purposes of this subsection, "control person"
means an officer; director; other person having the power, directly
or indirectly, to direct the management or policies of the issuer,
whether by contract or otherwise; or a person that owns 20% or more
of any class of the outstanding securities of the issuer.
(2) This exemption is not available if the issuer,
the issuer's predecessors, any affiliated issuer, or any control person
of the issuer:
(A) within the last five years, has filed a registration
statement which is the subject of a currently effective registration
stop order entered by any state securities administrator or the United
States Securities and Exchange Commission;
(B) within the last five years, has been convicted
of any criminal offense in connection with the offer, purchase, or
sale of any security, or involving fraud or deceit;
(C) is currently subject to any state or federal administrative
enforcement order or judgment, entered within the last five years,
finding fraud or deceit in connection with the purchase or sale of
any security; or
(D) is currently subject to any order, judgment, or
decree of any court of competent jurisdiction, entered within the
last five years, temporarily, preliminarily, or permanently restraining
or enjoining such party from engaging in or continuing to engage in
any conduct or practice involving fraud or deceit in connection with
the purchase or sale of any security.
(3) Paragraph (2) of this subsection shall not apply
if:
(A) the party subject to the disqualification is licensed
or registered to conduct securities-related business in the state
in which the order, judgment, or decree creating the disqualification
was entered against such party;
(B) before the first offer under this exemption, the
state securities administrator, or the court or regulatory authority
that entered the order, judgment, or decree, waives the disqualification;
or
(C) the issuer establishes it did not know and exercising
reasonable care, based on a factual inquiry, could not have known
that a disqualification existed under this subsection.
(4) This exemption is not available to an issuer if:
(A) a control person of the issuer is also a control
person of another issuer that has made a securities offering in Texas
within the previous 12-month period;
(B) a control person of the issuer is also a control
person of another issuer that is concurrently conducting a securities
offering in Texas; or
(C) the proceeds of the offering will be combined with
the proceeds of a securities offering by another issuer as part of
a single plan of financing.
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