As used in this chapter, the following terms shall have the meanings indicated:

Act shall mean the Securities Act of 2000, effective September 29, 2000 (D.C. Law 13-203; 47 DCR 7837; D.C. Official Code §§ 31-5601.01 et seq. (2001 ed.)).

Affiliate of, or person "affiliated" with, a specified person, is a person who directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

Agent has the same meaning as in the Act.

Audit shall mean an examination of the financial statements by an independent accountant in accordance with generally accepted auditing standards, as may be modified or supplemented by the Commission, for the purpose of expressing an opinion thereon.

Issuer agent means an agent, other than a broker-dealer agent, who represents an issuer in effecting or attempting to effect the purchase or sale of securities, and who is not exempt from registration under Title II of the Act.

Blind pool offering means an offering in which either:

1. (A) The offering materials do not describe specific operational plans.
2. (B) Eighty per cent or more of the net offering proceeds are not specifically allocated for the purchase, construction, or development of identified property or products, for the payment of indebtedness or overhead expenses, or for other activities set forth in the issuer's business plan.

Control (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

Director means any director of a corporation or any person performing similar functions with respect to any organization whether incorporated or unincorporated.

Equity security means any:

(A) Stock or similar security;

(B) Security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or

(C) Such warrant or right.

Executive officer means the president, any vice president in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy making function, or any other person who performs similar policy making functions for the issuer. Executive officers of subsidiaries may be deemed executive officers of the issuer if they perform such policy making functions for the issuer.

Financial Review means a limited inquiry and analytical procedure of much narrower scope than an audit, undertaken by a CPA for the purpose of expressing limited assurance that financial statements are presented in accordance with generally accepted accounting principles (“GAAP”).

Funding portal means any person acting as an intermediary in a transaction involving the offer or sale of securities for the account of others, solely pursuant to Section 4(6) of the Securities Act of 1933 (15 U.S.C. § 77d(6)), that does not—

(A) Offer investment advice or recommendations;

(B) Solicit purchases, sales, or offers to buy the securities offered or displayed on its website or portal;

(C) Compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on its website or portal;

(D) Hold, manage, possess, or otherwise handle investor funds or securities; or

(E) Engage in such other activities as the Securities Exchange Commission, by rule, determines appropriate.”

Material when used to qualify a requirement for the furnishing of information as to any subject, limits the information required to those matters as to which an average prudent investor reasonably ought to be informed before

purchasing the security registered.

Officer means a president, vice-president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any other person performing similar functions with respect to any organization, whether incorporated or unincorporated.

Predecessor means a person, the major portion of the business and assets of which another person acquired in a single succession, or in a series of related successions, in each of which the acquiring person acquired the major portion of the business and assets of the acquired person.

Principal office means the location of the primary office of a business where the business and financial records are kept and/or where executive level management employees work.

Promoter includes any person who:

1. (A) Acting alone or in conjunction with one or more other persons, directly or indirectly takes initiative in founding and organizing the business or enterprise of an issuer;
2. (B) In connection with the founding and organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both services and property, 10 percent or more of any class of securities of the issuer or 10 percent or more of the proceeds from the sale of any class of securities. However, a person who receives the securities or proceeds either solely as underwriting commissions or solely in consideration of property may not be deemed a promoter within the meaning of this subsection if the person does not otherwise take part in founding and organizing the enterprise.

Significant subsidiary means a subsidiary meeting any one of the following conditions:

1. (A) The assets of the subsidiary, or the investments in and advances to the subsidiary by its parent and the parent's other subsidiaries, if any, exceed 15 percent of the assets of the parent and its subsidiaries on a consolidated basis.
2. (B) The sales and operating revenues of the subsidiary exceed fifteen percent (15 %) of the sales and operating revenues of its parent and the parent's subsidiaries on a consolidated basis;

(C) The subsidiary is a parent of one or more subsidiaries and, together with the subsidiaries would, if considered in the aggregate, constitute a significant subsidiary.

Subsidiary of a specified person is an affiliate controlled by that person directly, or indirectly through one or more intermediaries.

Succession means the direct acquisition of the assets comprising a going business, whether by merger, consolidation, purchase, or other direct transfer. The term does not include the acquisition of control of a business, unless followed by the direct acquisition of its assets. The terms 'succeed' and 'successor' have meanings correlative to the foregoing.

SOURCE: Emergency Rulemaking published at 47 DCR 9910 (December 15, 2000) [EXPIRED]; as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Emergency and Proposed Rulemaking published at 48 DCR 3952 (May 4, 2001) [EXPIRED]; as amended by Emergency and Proposed Rulemaking published at 48 DCR 9177 (October 5, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 10879 (November 30, 2001); as amended by Final Rulemaking published at 61 DCR 11203 (October 24, 2014).