Securities Filing — Form D & California § 25102(f) LOEN

CALIFORNIA SECURITIES NOTICE FILINGS

SEC Form D (Federal) and California DFPI Notice Filings for Private Offerings

CALIFORNIA SECURITIES LAW OVERVIEW FOR ISSUERS

California securities regulation is governed by the Corporate Securities Law of 1968, Cal. Corp. Code §§ 25000 et seq. ("CSL"). The CSL is administered by the California Department of Financial Protection and Innovation (DFPI), the successor to the Department of Business Oversight and, before that, the Department of Corporations.

Unlike federal law, which provides that a registered offering or a Rule 506 offering preempts state qualification requirements, the CSL still imposes state-level notice filing and fee obligations on issuers that offer or sell securities to California residents.

Two Distinct California Filings

Issuers must understand which filing applies:

1. California Limited Offering Exemption Notice ("LOEN") — § 25102(f). For offerings relying on the California state limited offering exemption under Cal. Corp. Code § 25102(f). Filed on Form 260.102.14 with DFPI within 15 calendar days after the first sale in California. Cal. Code Regs. tit. 10 § 260.102.14. This exemption generally applies to offerings to 35 or fewer non-accredited California purchasers with preexisting relationships or sufficient sophistication.

2. Federal Covered Securities Notice — § 25102.1(d). For offerings relying on federal Rule 506 of Regulation D, which are "covered securities" under § 18 of the Securities Act of 1933 and therefore preempt state qualification. California's notice filing requirement under § 25102.1(d) is filed on Form 260.102.14 with DFPI within 15 calendar days after the first sale in California. (The same form is used for both filings in practice.) The filing must be accompanied by (i) a copy of the federal Form D, (ii) a consent to service of process (if applicable), and (iii) the prescribed fee.

Federal Form D

Federal Form D is filed electronically via the SEC EDGAR system under Rule 503 within 15 days after the first sale of securities.

PART I — ISSUER INFORMATION WORKSHEET

(Use to gather information prior to EDGAR filing and California DFPI LOEN filing)

Issuer Identification

• Exact Name of Issuer: [________________________________]
• Previous Names (last 5 years): [________________________________]
• Jurisdiction of Organization: [________________________________]

• Entity Type:
  ☐ California Corporation (Cal. Corp. Code § 200)
  ☐ California LLC (Cal. Corp. Code § 17701.01)
  ☐ California Limited Partnership (Cal. Corp. Code § 15900)
  ☐ Delaware Corporation (qualified in California under § 2105)
  ☐ Other: [________________________________]

• Year of Formation: [____]

• SEC CIK Number: [________________________________]
• California Secretary of State File Number: [________________________________]
• California Franchise Tax Board Account Number: [________________________________]

Principal Place of Business

• Address: [________________________________]
• City / State / ZIP: [________________________________]
• California Phone: [____________]
• Email: [________________________________]

Related Persons (Officers, Directors, Managers, Promoters, 10%+ Beneficial Owners)

PART II — EXEMPTION ANALYSIS AND ELECTION

Federal Exemption Claimed (Select One)

☐ Rule 506(b) — Unlimited accredited investors + up to 35 sophisticated non-accredited investors. No general solicitation.

☐ Rule 506(c) — Unlimited accredited investors only. General solicitation permitted. Reasonable steps to verify accredited status required under 17 C.F.R. § 230.506(c)(2)(ii).

☐ Rule 504 — Aggregate $10 million cap; state blue-sky qualification generally required; not a "covered security" under § 18 of the 1933 Act.

California Exemption / Notice Claimed (Select One)

☐ § 25102(f) LOEN — California limited offering exemption. Requires:

(a) sales to not more than 35 non-accredited California persons (accredited investors do not count toward the limit);
(b) each non-accredited purchaser must have a preexisting relationship with the issuer or a director/officer, OR have sufficient business/financial experience to protect their own interests (the "sophistication" alternative);
(c) each purchaser represents they are purchasing for their own account, not with a view to distribution;
(d) no offer or sale accomplished through advertising or public solicitation; and
(e) timely filing of Form 260.102.14 with DFPI within 15 days of first sale in California.

☐ § 25102.1(d) Federal Covered Securities Notice — For Rule 506 offerings that are federal "covered securities" under § 18 of the 1933 Act. Filed on Form 260.102.14 with DFPI within 15 days of first sale in California. Must include a copy of the federal Form D.

☐ § 25102(n) — California public offering exemption (rare; requires specific conditions).

☐ § 25100 Exempt Securities — specific securities categories exempt from qualification.

PART III — OFFERING DETAILS

Type of Security Being Offered

☐ Common Stock (Cal. Corp. Code § 400)
☐ Preferred Stock
☐ Convertible Note / Debt Security
☐ SAFE (Simple Agreement for Future Equity)
☐ LLC Membership Interest
☐ Limited Partnership Interest
☐ Warrant / Option
☐ Other: [________________________________]

Offering Amount

• Total Offering Amount: $[____________]
• Total Amount Sold to Date: $[____________]
• Amount Sold to California Residents: $[____________]
• Number of California Purchasers to Date: [____]
• Minimum Investment per Investor: $[____________]

Date of First Sale

• Federal First Sale Date: [__/__/____]
• First Sale to California Resident: [__/__/____]
• Form D Filing Deadline (15 days after federal first sale): [__/__/____]
• DFPI LOEN Deadline (15 days after first California sale): [__/__/____]

Investor Composition

• Number of accredited investors: [____]
• Number of non-accredited investors (must be ≤ 35 for § 25102(f)): [____]
• Number that are California residents: [____]

Use of Proceeds

[________________________________]

Sales Compensation

Is any person being paid commissions or finders' fees for California sales? ☐ Yes ☐ No

If yes, broker-dealer name and CRD number: [________________________________]

NOTE: California generally requires that any person receiving transaction-based compensation for selling securities to California residents be licensed as a broker-dealer or properly exempted. Finders' fee arrangements are heavily scrutinized under Cal. Corp. Code § 25210.

PART IV — DFPI FORM 260.102.14 FILING INSTRUCTIONS

Where to File

California Department of Financial Protection and Innovation (DFPI) — Securities Section

Submit electronically via DocQnet (DFPI's electronic filing portal) at https://docqnet.dfpi.ca.gov/, or by mail to:

Department of Financial Protection and Innovation
Attn: Securities Regulation Division
2101 Arena Boulevard
Sacramento, CA 95834

What to File

☐ Form 260.102.14 — Limited Offering Exemption Notice, signed by an authorized officer or managing member

☐ Copy of the Federal Form D (if a § 25102.1(d) notice filing for a Rule 506 offering)

☐ Filing Fee — calculated under Cal. Corp. Code § 25608 and DFPI fee schedule (graduated based on the value of California sales):

(Verify current fee schedule with DFPI before filing.)

☐ Consent to Service of Process — Form 260.165, required for issuers not organized under California law that have not previously filed a consent, pursuant to Cal. Corp. Code § 25165.

When to File

Within 15 calendar days after the first sale in California. Cal. Code Regs. tit. 10 § 260.102.14(b).

Consequence of Late Filing

Late filing does not automatically void the exemption, but it:

• Subjects the issuer to a penalty under Cal. Corp. Code § 25608 (typically 5× the filing fee, or other statutory amounts);
• May support civil liability to investors under Cal. Corp. Code § 25503 (rescission) and § 25501 (antifraud);
• May disqualify the issuer's directors/officers from subsequent § 25102(f) exemptions under DFPI disciplinary authority.

See San Diego Corporate Law, discussion of LOEN penalties.

PART V — ISSUER REPRESENTATIONS AND COVENANTS

The Issuer, by authorized signature below, represents and warrants as of the filing date:

5.1 Accuracy of Disclosure. All information in the Form D (federal) and Form 260.102.14 (California) is true, complete, and not misleading in any material respect to the best of the Issuer's knowledge.

5.2 § 25102(f) Compliance. The Issuer has complied with each element of Cal. Corp. Code § 25102(f) and Cal. Code Regs. tit. 10 § 260.102.14, including the limitation on non-accredited purchasers, preexisting relationship or sophistication requirement, and prohibition on general solicitation.

5.3 No Bad Actor Disqualification. No Issuer, predecessor, affiliated issuer, director, executive officer, other officer participating in the offering, general partner, managing member, 20% beneficial owner, promoter, compensated solicitor, or any of its directors/executive officers is subject to a Rule 506(d) "bad actor" disqualification.

5.4 California Securities Antifraud Compliance. The Issuer has not made any untrue statement of a material fact or omitted to state a material fact in connection with the offer or sale of securities in California, consistent with Cal. Corp. Code § 25401.

5.5 Preexisting Relationship Documentation. For each non-accredited California purchaser, the Issuer maintains documentation of the preexisting relationship or the business/financial sophistication of the purchaser.

5.6 Advertising Prohibition Compliance. The Issuer has not used any form of general advertising or general solicitation in California in connection with the § 25102(f) offering (unless relying on § 25102.1(d) / Rule 506(c), in which case reasonable verification of accredited status under 17 C.F.R. § 230.506(c)(2)(ii) has been performed).

5.7 Timely Filing Commitment. The Issuer shall file the required federal Form D and California Form 260.102.14 within the applicable 15-day windows and shall amend any filing promptly upon becoming aware of material inaccuracies.

5.8 Record Retention. The Issuer shall maintain records of all subscribers, subscription agreements, investor questionnaires, wire confirmations, and sales compensation for at least five (5) years following the last sale.

PART VI — RISK OF LIABILITY FOR NON-COMPLIANCE

6.1 Cal. Corp. Code § 25503 — Rescission. If the Issuer sells a security in violation of § 25110 (qualification requirement), the purchaser may sue for rescission or damages within the limitations period specified in § 25507.

6.2 Cal. Corp. Code § 25501 — Fraud Liability. Antifraud liability under § 25401 and § 25501 applies even to exempt offerings; disclosure requirements are not eliminated by exemption.

6.3 Cal. Corp. Code § 25504 — Control-Person Liability. Directors, officers, and controlling persons may be jointly and severally liable for violations.

6.4 DFPI Administrative Action. DFPI may issue desist-and-refrain orders under Cal. Corp. Code § 25532, seek administrative penalties under § 25612, or refer matters to the California Attorney General for criminal prosecution under § 25540.

6.5 SEC and Federal Enforcement. A defective federal Form D filing or non-compliance with Rule 506 may expose the Issuer to SEC enforcement, loss of the federal exemption, and liability under § 12 of the 1933 Act.

PART VII — AMENDMENTS AND ANNUAL UPDATES

7.1 Amendment Triggers. An amended Form D must be filed with the SEC under Rule 503 promptly upon (a) discovery of a material mistake, (b) material change, or (c) annually for continuing offerings.

7.2 California Amendment. DFPI does not require annual amendments to Form 260.102.14, but an amended notice should be filed if material information in the original filing becomes inaccurate or upon termination of the offering.

7.3 Termination of Offering. Upon termination of the offering, the Issuer should document termination in its records and file any final amendment to the federal Form D.

PART VIII — SIGNATURE AND AUTHORIZATION

ISSUER:

[________________________________]

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

By signing above, the signatory affirms that: (a) they are duly authorized to execute filings on behalf of the Issuer; (b) the Issuer has reviewed applicable federal and California securities laws; and (c) the information submitted is true, complete, and not misleading.

EXHIBIT A — California Purchaser List (Confidential — Retain in Issuer Records)

EXHIBIT B — Subscription Document Checklist

☐ Executed subscription agreement
☐ Investor questionnaire / suitability statement
☐ Accredited investor verification (Rule 506(c) offerings)
☐ California preexisting relationship documentation (§ 25102(f) offerings)
☐ Wire confirmation / payment evidence
☐ Securities legends on certificates (Cal. Corp. Code § 418)

BOARD RESOLUTION (OPTIONAL)

"RESOLVED, that the Board of Directors hereby authorizes and directs the officers of the Issuer to prepare, execute, and file with the U.S. Securities and Exchange Commission a Form D and with the California Department of Financial Protection and Innovation a Form 260.102.14 (Limited Offering Exemption Notice), pay the applicable filing fees, and take all further actions necessary to effect the offering of securities in compliance with Regulation D under the Securities Act of 1933 and Cal. Corp. Code § 25102(f) or § 25102.1, as applicable."

Sources and References

• California Corporate Securities Law of 1968, Cal. Corp. Code § 25000 et seq.: https://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml?tocCode=CORP&division=1.&title=4.
• Cal. Corp. Code § 25102(f): https://leginfo.legislature.ca.gov/
• Cal. Code Regs. tit. 10 § 260.102.14 (LOEN): https://www.law.cornell.edu/regulations/california/10-CCR-260.102.14
• California Department of Financial Protection and Innovation — Securities: https://dfpi.ca.gov/regulated-industries/securities/
• DFPI Form 260.102.14: https://dfpi.ca.gov/wp-content/uploads/sites/337/forms/Securities/DFPI-260.102.14c.pdf
• DFPI DocQnet Electronic Filing Portal: https://docqnet.dfpi.ca.gov/
• SEC Regulation D, 17 C.F.R. §§ 230.500–230.508: https://www.ecfr.gov/current/title-17/chapter-II/part-230
• SEC EDGAR Form D filing: https://www.sec.gov/edgar
• Rule 506(b) and 506(c): 17 C.F.R. § 230.506
• Rule 503 (filing requirement): 17 C.F.R. § 230.503
• Cal. Corp. Code §§ 25401, 25501, 25503, 25504, 25507 (antifraud and rescission)
• Cal. Corp. Code § 25165 (consent to service of process; Form 260.165)