[Code of Federal Regulations]
[Title 17, Volume 2]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR229.506]

[Page 423]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
 
 PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975--
REGULATION S-K--Table of Contents
 
    Subpart 229.500--Registration Statement and Prospectus Provisions
 
Sec. 229.506  (Item 506) Dilution.

    Where common equity securities are being registered and there is 
substantial disparity between the public offering price and the 
effective cash cost to officers, directors, promoters and affiliated 
persons of common equity acquired by them in transactions during the 
past five years, or which they have the right to acquire, and the 
registrant is not subject to the reporting requirements of section 13(a) 
or 15(d) of the Exchange Act immediately prior to filing of the 
registration statement, there shall be included a comparison of the 
public contribution under the proposed public offering and the effective 
cash contribution of such persons. In such cases, and in other instances 
where common equity securities are being registered by a registrant that 
has had losses in each of its last three fiscal years and there is a 
material dilution of the purchasers' equity interest, the following 
shall be disclosed:
    (a) The net tangible book value per share before and after the 
distribution;
    (b) 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
    (c) The amount of the immediate dilution from the public offering 
price which will be absorbed by such purchasers.