[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR228.506]

[Page 337-338]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
PART 228--INTEGRATED DISCLOSURE SYSTEM FOR SMALL BUSINESS ISSUERS--Table of Contents
 
                        Subpart A--Regulation S-B
 
Sec. 228.506  (Item 506) Dilution.

    (a) If the small business issuer is not a reporting company and is 
selling common equity at a price significantly more than the price paid 
by officers, directors, promoters and affiliated persons for common 
equity purchased by them during the past five years (or which they have 
rights to purchase), compare these prices.
    (b) If paragraph (a) of this Item applies and the issuer had losses 
in each of its last three fiscal years, or since its inception, 
whichever period is shorter, and there is a material dilution of the 
purchasers' equity interest, disclose the following:
    (1) The net tangible book value per share before and after the 
distribution;

[[Page 338]]

    (2) The amount of the increase in such net tangible book value per 
share attributable to the cash payments made by purchasers of the shares 
being offered; and
    (3) The amount of the immediate dilution from the public offering 
price which will be absorbed by such purchasers.