Sec. 02.02.04.11. MLOE: Local Issuer Exemption

A. Nature of Issuer.

(1) Exemption under MLOE and this regulation is available only to local issuers.

(2) The Commissioner may extend by order the exemption under this regulation to a limited liability company, partnership, or other entity that satisfies all of the elements of the definition of local issuer except that it is not a corporation, if the Commissioner determines that the order would be consistent with the public interest.

B. Definition.

(1) "Local issuer" means a corporation that:

(a) Is organized under the laws of Maryland or is organized under the laws of another jurisdiction and is qualified to do business in Maryland under Corporations and Associations Article, §7-203, Annotated Code of Maryland;

(b) Has its principal place of business in Maryland; and

(c) In the reasonable belief of the issuer, has 50 or fewer beneficial owners of its securities, both immediately before and immediately after the sale of securities under MLOE.

(2) For the purpose of calculating the number of beneficial owners under §B(1)(c) of this regulation:

(a) A corporation, limited liability company, partnership, or other entity is considered one beneficial owner, unless the corporation, limited liability company, partnership, or other entity was organized for the purpose of acquiring the securities of the issuer;

(b) If an owner that is a corporation, limited liability company, partnership, or other entity was organized for the purpose of acquiring the securities of the issuer, then each beneficial owner of an equity interest in the corporation, limited liability company, partnership, or other entity is considered a separate owner of the issuer;

(c) A relative, spouse, or relative of the spouse of a beneficial owner, who has the same principal residence as the beneficial owner, is considered together with the beneficial owner to be one beneficial owner of the issuer;

(d) A holder of a purchase money mortgage is excluded; and

(e) A person enumerated in 17 CFR §230.501(a)(1) (SEC Rule 501, Definitions and Terms Used in Regulation D) (1994), which is incorporated by reference, is excluded.

C. Number of Purchasers. In an offering under this regulation:

(1) There may be not more than, or the issuer shall have a reasonable belief that there are not more than, ten purchasers, wherever located, of securities from the issuer during any 12-month period; and

(2) The number of purchasers shall be calculated in accordance with Regulation .10F of this chapter.

D. Aggregate Offering Price. In an offering under this regulation, the aggregate offering price during any 12-month period may not exceed $150,000.

E. Disclosure. Availability of the exemption under this regulation does not depend upon the issuer's delivery to a purchaser of a specific disclosure document.