Current through Register Vol. 35, No. 18, September 24, 2024
A. Sponsors and
persons selling programs and claiming therefor the exemption provided in
Section
58-13C-202 CC
shall make every reasonable effort to assure that the investment is suitable
for the persons being offered or sold interests, taking into consideration each
person's financial situation, investment objectives and business
acumen.
B. For purposes of
determining suitability, sponsors and persons offering or selling the
investment shall ensure that the investors meet one of the following financial
criteria:
(1) a minimum net worth of $100,000
(exclusive of home, furnishings and automobiles); or
(2) a minimum net worth of $50,000 (exclusive
of home, furnishings and automobiles) and an annual income of
$50,000.
C. An offer or
sale claiming the exemption provided in Section
58-13C-202 CC
must require a total minimum investment of $5,000 and a minimum initial
investment of $2,500.
D. At a
minimum, the following information shall be disclosed to potential investors in
programs claiming the exemption provided in Section
58-13C-202
CC:
(1) a general description of the program
and the business activity to be engaged in including: the general nature of the
units being offered; the maximum aggregate amount of the offering; subscription
price; the period of the offering; the maximum amount of any sales or
underwriting commissions to be paid or the nature of any sharing arrangement
and fees; and, the estimated amount to be paid during the first 12 months
following commencement of operations for administrative and similar
services;
(2) a carefully organized
series of concise paragraphs, under subcaptions where appropriate, describing
the risk factors to be considered before making an investment in the
program;
(3) suitability
requirements for investors;
(4) the
business experience of the sponsors and affiliates, particularly with regard to
the oil, gas or mining business;
(5) all compensation, direct or indirect,
which is to be paid to the sponsor;
(6) a statement of the purposes for which the
net proceeds to the program are intended to be used and the approximate amount
and percentages intended to be used for each such purpose;
(7) 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 statement describing the location and
general character of all materially important oil, gas or mining interests now
held or presently intended to be acquired by the program;
(9) a full description of any transactions
and the dollar amount thereof which may be entered into between the program and
sponsor or any affiliate, including a full description of the material terms of
any agreement and the dollar amount thereof between the program and the sponsor
or any affiliate; where the sponsor originates or promotes other programs,
describe the equitable principles which will apply in resolving any conflict
among the programs; in the case where the program has been in existence,
include all transactions and contracts of the program with the sponsor or any
affiliate during the period of such existence; all conflicts shall be set forth
in one section and shall be entitled "Conflicts of Interest and Transactions
with Affiliates"; and
(10) a brief
description of any pending legal proceedings which may materially affect the
venture.
E. For the
purposes of Section
58-13C-202
CC, "principally operating in New Mexico" includes a limited liability company
organized under the laws of this state or a limited liability company in which
a majority in interest of the members are residents of this state.
