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 Securities Lawyer's Deskbook
                         published by The University of Cincinnati College of Law
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Integrated Disclosure System
for Small Business Issuers

Regulation S-B

Item 403 -- Security Ownership of Certain Beneficial Owners and Management

  1. Security ownership of certain beneficial owners. Complete the table below for any person (including any "group") who is known to the small business issuer to be the beneficial owner of more than five percent of any class of the small business issuer's voting securities.

    (1) Title of class (2) Name and address of beneficial owner (3) Amount and nature of beneficial ownership (4) Percent of class

  2. Security ownership of management. Furnish the following information, as of the most recent practicable date, in substantially the tabular form indicated, as to each class of equity securities of the small business issuer or any of its parents or subsidiaries, including directors' qualifying shares, beneficially owned by all directors and nominees, naming them, each of the named executive officers as defined in Item 402(a)(2), and directors and executive officers of the small business issuer as a group, without naming them. Show in column (3) the total number of shares beneficially owned and in column (4) the percent of the class so owned. Of the number of shares shown in column (3), indicate, by footnote or otherwise, the amount of shares that are pledged as security and the amount of shares with respect to which such persons have the right to acquire beneficial ownership as specified in Rule 240.13d-3(d)(1) of this chapter.

    (1) Title of class (2) Name of beneficial owner (3) Amount and Nature of Beneficial ownership (4) Percent of class

  3. Changes in control. Describe any arrangements which may result in a change in control of the small business issuer.

Instructions to Item 403:

  1. Of the number of shares shown in column (3) of paragraphs (a) and (b) of this Item, state in a footnote the amount which the listed beneficial owner has the right to acquire within sixty days, from options, warrants, rights, conversion privilege or similar obligations.

  2. Where persons hold more than 5% of a class under a voting trust or similar agreement, provide the following:

    1. the title of such securities;

    2. the amount that they hold under the trust or agreement (if not clear from the table) ;

    3. the duration of the agreement;

    4. the names and addresses of the voting trustees; and

    5. a brief outline of the voting rights and other powers of the voting trustees under the trust or agreement.

  3. Calculate the percentages on the basis of the amount of outstanding securities plus, for each person or group, any securities that person or group has the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights.

  4. In this Item, a beneficial owner of a security means:

    1. Any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares:

      1. Voting power, which includes the power to vote, or to direct the voting of, such security; or

      2. Investment power, which includes the power to dispose, or to direct the disposition of, such security.

    2. Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership.

  5. All securities of the same class beneficially owned by a person, regardless of the form that such beneficial ownership takes, shall be totaled in calculating the number of shares beneficially owned by such person.

  6. The small business issuer is responsible for knowing the contents of any statements filed with the Commission under section 13(d) or 13(g) of the Exchange Act concerning the beneficial ownership of securities and may rely upon the information in such statements unless it knows or has reason to believe that the information is not complete or accurate.

  7. The term "group" means two or more persons acting as a partnership, syndicate, or other group for the purpose of acquiring, holding or disposing of securities of an issuer.

  8. Where the small business issuer lists more than one beneficial owner for the same securities, adequate disclosure should be included to avoid confusion.

Regulatory History

57 FR 36458, Aug. 13, 1992; 57 FR 48150, Oct. 21, 1992; 71 FR 53158, 53234, Sept. 8, 2006.

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