Current through Register Vol. 35, No. 18, September 24, 2024
A. Pursuant to
Section
58-13C-202 X,
notification must be given on the securities division's form X and filed with
the division ten business days prior to any offer of securities.
B. No commission, fee or other remuneration
shall be paid or given, directly or indirectly, to any person for soliciting
any prospective purchaser in this state unless such person is appropriately
registered in this state.
C. No
exemption shall be available under Section
58-13C-202 X
for the securities of any issuer if any of the persons described in the
Securities Act of 1933, Regulation A, Rule 230.262 (a), (b) or (c):
(1) has filed a registration statement which
is the subject of a currently effective registration stop order entered
pursuant to any state's securities law within five years prior to the filing of
the notice required under this exemption;
(2) has been convicted within five years
prior to the filing of the notice required under this exemption of any felony
or misdemeanor in connection with the offer, purchase or sale of any security
or any felony involving fraud or deceit including but not limited to forgery,
embezzlement, obtaining money under false pretenses, larceny or conspiracy to
defraud;
(3) is currently subject
to any administrative enforcement order or judgment entered by any state's
securities administrator within five years prior to the filing of the notice
required under this exemption or is subject to any state's administrative
enforcement order or judgment, in which fraud or deceit including but not
limited to making untrue statements of material facts and omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the filing of the notice required under this
exemption;
(4) is subject to any
state's administrative enforcement order or judgment which prohibits, denies or
revokes the use of any exemption from registration in connection with the
offer, purchase or sale of securities; or
(5) is currently subject to any order,
judgment, or decree of any court of competent jurisdiction temporarily,
preliminarily or permanently restraining or enjoining such party from engaging
in or continuing to engage in any conduct or practice involving fraud or deceit
in connection with the purchase or sale of any security or involving the making
of any false filing with any state entered within five years prior to the
filing of the notice required under this exemption.
D. The requirements set forth in Subsection C
of this section may be waived by the director if the director determines upon a
showing of good cause that it is not necessary under the circumstances that the
exemption be denied.
E. At a
minimum, the following information shall be disclosed to potential investors in
offerings claiming the exemption provided in Section
58-13C-202 X:
(1) a general description of the offering and
the business activity to be engaged in including:
(a) the general nature of the securities
being offered;
(b) the maximum
aggregate amount of the offering;
(c) the subscription price;
(d) the period of the offering;
(e) the maximum amount of any sales or
underwriting commission to be paid and the nature of any sharing arrangement
and fees;
(f) the federal exemption
under the Securities Act of 1933 on which the issue is being offered;
(g) the specific purposes for which the
registrant intends to employ its funds in the event that the minimum capital is
received; and
(h) the estimated
amount to be paid during the first 12 months following commencement of
operations for administrative and similar services;
(2) for corporate offerings, a statement of
dilution;
(3) for partnership
offerings, suitability requirements for investors;
(4) the business experience of the sponsors
and affiliates, particularly with regard to the business of the
offeror;
(5) all compensation,
direct or indirect, which is to be paid to the sponsor, officers, directors or
control persons;
(6) a statement of
the purposes for which the net proceeds of the offering are intended to be used
and the approximate amount and percentages intended to be used for each such
purpose;
(7) for partnership
offerings, a statement prominently set forth as to whether additional
assessments are provided for and, if so, the method of assessment and the
penalty for default;
(8) a
description of the proposed business activity including, where applicable,
prior business history;
(9) a full
description of any transactions and the dollar amount thereof which may be
entered into between the offeror and the sponsor or control persons or
affiliates, including a full description of the material terms of any agreement
and dollar amount thereof between the offeror and the sponsor or control
persons or affiliates;
(10) where
the sponsor originates or promotes other offerings, a full description of the
equitable principles which will apply in resolving any conflict between the
offerings;
(11) in the case where
the offeror has been in existence, a full description of all transactions and
contracts of the offeror with the sponsor or any affiliate during the period of
such existence;
(12) all conflicts
set forth in one section entitled "Conflict of Interest and Transactions with
Affiliates";
(13) in the case of
offerings of direct participation programs as defined in Paragraph 2310(a)(4)
of the FINRA manual, an opinion of counsel complying with American bar
association opinion 346 as to the material tax consequences; and
(14) a brief description of any pending legal
proceedings which might materially affect the venture.
F. Notice to prospective investors of
material changes in the condition of the issuer occurring after the effective
date of offering or when new information is substituted for that contained in
the prospectus shall be effected through an amendment. Such amendments will not
become effective until the director so orders and a corrected offering document
will be sent to present stockholders including stockholders who may already
have sold their shares. Post-effective amendments to change the price of
securities will not be permitted. Post-effective amendments to lower the
minimum amount of the offering will not be permitted. Amendments to increase
the minimum amount of the offering, however, will be permitted.
G. Unless extended by the director, an
offering shall be completed no later than one year from the date of
acknowledgment by the director of the claim of exemption.
H. No offering document is required for sales
of securities by a professional corporation or association to persons duly
licensed in the corporation's area of business.
