NAC90.405. Application of statements of policy to offerings; offerings made with unreasonable amounts of underwriters’ and sellers’ compensation; aggregate amount of compensation.

     1. For the purposes of NRS 90.510:

     (a) Except as otherwise provided in paragraph (b), statements of policy adopted by the North American Securities Administrators Association may be used by the Administrator to determine whether an offering:

          (1) Is complete with respect to the disclosure provided;

          (2) Works or will tend to work a fraud upon purchasers; or

          (3) Is or will be made with unreasonable amounts of promoters’ profits or participation, or unreasonable amounts or kinds of options.

     (b) An offering is made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions or other compensation if the aggregate amount of that compensation, calculated as provided in subsection 2:

          (1) Is greater than 15 percent; or

          (2) When added to the total amount of expenses incurred or to be incurred in connection with the offering, is greater than 20 percent,

Ê of the aggregate offering price.

     2. Except as otherwise provided in this subsection, the aggregate amount of compensation includes the fair market value of any options or warrants given in connection with the offering to underwriters and sellers. If there is no evidence sufficient to establish a fair market value or other value, the value of these options and warrants shall be deemed to be not less than 20 percent of the public offering price of the stock to which they relate.

     (Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)