As used in the Rules and Regulations of the Financial Services Commission and Office of Financial Regulation, pursuant to Florida Statutes Chapter 517, unless the context otherwise specifically requires:
    (1) “”Accredited Investor”” is defined pursuant to S.E.C. Rule 501(a) of Regulation D (17 C.F.R. § 230.501(a)), which is incorporated by reference in Fl. Admin. Code R. 69W-200.002
    (2) “”Advertising”” means any circular, prospectus, advertisement or other material or any communication by radio, television, Internet, pictures or similar means used in connection with a sale or purchase or an offer to sell or purchase any security.
    (3) “”Aggregate Indebtedness”” is defined pursuant to S.E.C. Rule 15c3-1 (17 C.F.R. § 240.15c3-1), which is incorporated by reference in Fl. Admin. Code R. 69W-200.002
    (4) The term “”Applicant”” shall mean a person natural or otherwise, executing or submitting an application for registration.
    (5) “”Application”” means all information required by the forms prescribed by the Financial Services Commission and any additional information required by the Financial Services Commission or Office of Financial Regulation together with all required statutory fees.
    (6)(a) “”Associated person”” as defined in 517.021(3), F.S., shall include any person who for compensation refers, solicits, offers, or negotiates for the purchase or sale of securities and/or of investment advisory services. A person whose activities fall within this definition is required to register with the Office of Financial Regulation as an associated person pursuant to Section 517.12(1) or (3), F.S.
    (b) Notwithstanding the provisions of paragraph (a), an associated person registered with the Office of Financial Regulation and operating in compliance with Fl. Admin. Code R. 69W-600.0034(4)(b), shall not be deemed an associated person of any investment adviser other than the investment adviser or dually registered dealer/investment adviser with which such associated person is registered.
    (c) A natural person receiving compensation from a federal covered adviser or an investment adviser acting in compliance with S.E.C. Rule 206(4)-1 (17 C.F.R. § 275.206(4)-1), which is incorporated by reference in Fl. Admin. Code R. 69W-200.002, shall not be deemed an associated person of such investment adviser or federal covered adviser.
    (7) “”Bona Fide Employee”” is deemed to be a partner, officer, director, or trustee of the issuer, or any employee of such partner, officer, director or trustee, who has not participated in the distribution or sale of any securities within the preceding twelve (12) months, and who primarily performs, or is intended to perform at the end of the distribution, substantial duties for, or on behalf of the issuer, other than in connection with transactions in securities.
    (8)(a) Except as otherwise provided in this subsection, the term “”Branch Office”” shall mean any location in this state of a dealer or investment adviser at which one or more associated persons regularly conduct the business of rendering investment advice or effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security or any location that is held out as such. Pursuant to Florida Statutes § 517.021(5), the Financial Services Commission may adopt exceptions to this definition. The following locations shall not be deemed branch offices for purposes of Florida Statutes § 517.12(4), and are considered exceptions to the definition of a branch office under Florida Statutes § 517.021(5):
    1. Any location that is established solely for customer service or back office type functions where no sales activities are conducted and that is not held out to the public as a branch office;
    2. Any location that is the associated person’s primary residence; provided that:
    a. Only one associated person, or multiple associated persons, who reside at that location and are members of the same immediate family, conduct business at the location;
    b. The location is not held out to the public as an office and the associated person does not meet with customers at the location;
    c. Neither customer funds nor securities are handled at that location;
    d. The associated person is assigned to a designated branch office, and such designated branch office is reflected on all business cards, stationery, advertisements and other communications to the public by such associated person;
    e. The associated person’s correspondence and communications with the public are subject to the firm’s supervision in accordance with FINRA Rule 3110, as incorporated in Fl. Admin. Code R. 69W-200.002;
    f. Electronic communications (e.g., e-mail) are made through the registrant’s electronic system;
    g. All orders are entered through the designated branch office or an electronic system established by the registrant that is reviewable at the branch office;
    h. Written supervisory procedures pertaining to supervision of sales activities conducted at the residence are maintained by the registrant; and,
    i. A list of the residence locations is maintained by the registrant;
    3. Any location, other than a primary residence, that is used for securities business for less than 30 business days in any one calendar year, provided the registrant complies with the provisions of this rule in sub-subparagraphs (8)(a)2.a. through i., above;
    4. Any office of convenience, where associated persons occasionally and exclusively by appointment meet with customers, which is not held out to the public as an office;
    5. Any location that is used primarily to engage in non-securities activities and from which the associated person(s) effects no more than 25 securities transactions in any one calendar year; provided that any advertisement or sales literature identifying such location also sets forth the address and telephone number of the location from which the associated person(s) conducting business at the non-branch locations are directly supervised;
    6. The floor of a registered national securities exchange where a registrant conducts a direct access business with public customers; or
    7. A temporary location established in response to the implementation of a business continuity plan.
    8. The principal office and place of business of an investment adviser registered with the Office of Financial Regulation pursuant to Florida Statutes § 517.12(4)
    9. Any location of an investment adviser that is notice-filed as a branch office of a dealer, provided the dealer and investment adviser use the same CRD number.
    (b) Notwithstanding the exclusions provided in subparagraph (8)(a)2., above, any location of a dealer that is responsible for supervising the activities of persons associated with the registrant at one or more non-branch locations of the registrant is considered to be a branch office.
    (c) The term “”business day”” as used in subparagraph (8)(a)3., above, shall not include any partial business day provided that the associated person spends at least four hours on such business day at his or her designated branch office during the hours that such office is normally open for business.
    (9) “”Carrying Dealer”” means any dealer maintaining a fully/principally disclosed agreement/arrangement with an introducing dealer, whereby the carrying dealer is responsible for customer monies and securities, and confirms transactions to the customer accounts introduced; such dealer who carries accounts for Florida residents must be registered pursuant to the provisions of Florida Statutes § 517.12
    (10) “”Developmental Stage Entities”” shall be defined as those entities which are devoting substantially all of their efforts to establishing a new business and for which either of the following conditions exists:
    (a) Planned principal operations have not commenced; or
    (b) Planned principal operations have commenced but whose annual net earnings for each of the last two (2) consecutive fiscal years or whose average annual net earnings for the last five (5) fiscal years prior to the public offering have been less than five percent (5%) of the aggregate public offering.
    (11) “”Dilution”” for purposes of Rules 69W-700.008 and 69W-700.015, F.A.C., shall be determined by subtracting the maximum sales commissions and expenses set forth in the prospectus from the gross proceeds of the offering and adding the net worth prior to the offering. Divide this sum by the total number of shares to be outstanding at the conclusion of the offering to determine book value. Subtract the book value from the proposed offering price and divide the result by the proposed offering price to arrive at the percentage of dilution. For the purpose of calculating “”dilution”” or “”book value,”” intangible assets such as patents, copyrights, franchises, trademarks, operating rights and goodwill are deducted from total assets.
Dilution Formula:
NP
=
Gross Proceeds minus Maximum Sales Commissions and Expenses
NW
=
Net Worth prior to the offering
TS
=
Total Number of shares to be outstanding after a successful offering
BV
=
Book Value
OP
=
Offering Price
Example:
NP + NW
________