Or. Admin. R. 441-065-0225

Current through Register Vol. 63, No. 8, August 1, 2024

Section 441-065-0225 - Registration for a Small Corporate Offering Registration (SCOR) Procedure for Offerings Not Exceeding $5,000,000

(1) General Requirements. An applicant for registration pursuant to this rule shall comply with all applicable provisions of OAR 441-065-0060 through 441-065-0210.

(2) Qualifications checklist:

(a) The issuer shall be a corporation or limited liability company organized under the laws of one of the states or possessions of the United States;

(b) The issuer shall not engage in a petroleum exploration or production, mining or other extractive industries business;

(c) The offering shall not be a "blind pool" or other offering for which the specific business to be engaged in or property to be acquired by the issuer cannot be specified;

(d) If the offering includes debt securities, the application for registration shall include information demonstrating the ability of the issuer to service its debt;

(e) The offering price for any common stock (and the exercise price, if the securities offered are options, warrants or rights for common stock, and the conversion price if the securities are convertible into common stock) registered under this rule shall be equal to or greater than $1 per share. In addition, the issuer shall not be permitted to split its common stock or declare a stock dividend for two years after the effectiveness of the registration without the prior written approval of the Director;

(f) The total of the amount being registered, plus the aggregate offering price of all securities sold within or outside the state within the 12 months preceding the effective date of the order of registration, plus the aggregate offering price of all securities of the issuer sold within or outside the state during the course of the offering being registered, where the securities are sold in reliance on section 3(b) of the Securities Act of 1933, as amended, or in violation of Section 5(a) of that Act, shall not exceed $5,000,000;

(g) The issuer shall not be an investment company within the meaning of Section 3 of the Investment Company Act of 1940, as amended;

(h) The issuer shall not be subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended.

(3) Purchaser Qualifications. No limits are placed upon the number of persons who may purchase securities registered pursuant to this rule. Sales of securities registered pursuant to this rule shall only be made to purchasers who are:

(a) Accredited investors;

(b) Permitted Oregon purchasers;

(c) Sophisticated purchasers;

(d) Suitable purchasers; or

(e) Direct purchasers from the issuer.

(4) Application Requirements: An application to register securities filed pursuant to a SCOR Offering shall include the following:

(a) A completed NASAA Form U-7 (a uniform disclosure document for small corporate offerings) including the following exhibits, to the extent applicable:

(A) Form of underwriting or selling agency agreement;

(B) Issuer's articles of incorporation or other charter documents and all amendments thereto;

(C) Issuer's bylaws, as amended to date;

(D) A copy of any resolutions by the issuer's board of directors setting forth terms and provisions of capital stock to be issued;

(E) Any indenture, form of note or other contractual provision containing terms of notes or other debt, or of options, warrants or rights to be offered;

(F) Specimen of security to be offered (including any legend restricting resale);

(G) Copy of all advertising or other materials directed to or to be furnished investors in the offering;

(H) Form of escrow agreement for escrow of proceeds;

(I) Consent to inclusion in the NASAA Form U-7 Disclosure Document of accountant's report;

(J) Consent to inclusion in the NASAA Form U-7 Disclosure Document of tax advisor's opinion or description of tax consequences;

(K) Consent to inclusion in the NASAA Form U-7 Disclosure Document of any evaluation of litigation or administrative action by counsel;

(L) Form of any Subscription Agreement for the purchase of the securities;

(M) Opinion of counsel that the securities to be sold in the offering have been duly authorized and when issued upon payment of the offering price will be legally and validly issued, fully paid and nonassessable and binding on the issuer in accordance with their terms;

(N) Schedule of residence street addresses of the issuer's officers, directors and principal stockholders;

(O) Work sheets showing computations of responses to Questions 6, 7(a), 8(a), 8(b) and 17(b) of the NASAA Form U-7 Disclosure Document; and

(P) Any additional or supplementary materials requested by the Director.

(b) A non-refundable registration fee as set in OAR 441-065-0001; and

(c) Unless the offering is being sold through a licensed broker-dealer or by a person exempt from the licensing requirements, at least one completed salesperson application on the FINRA Form U-4 and a per person non-refundable license fee as set in OAR 441-175-0002.

(5) Information Requirements. Each prospective purchaser of the securities shall be given a copy of the NASAA Form U-7 Disclosure Document (including all amendments) filed with the Director pursuant to this rule.

(6) Material Changes to a SCOR Offering. If a material change concerning the issuer or the offering occurs while the securities are still registered, the issuer shall:

(a) Amend the NASAA Form U-7 Disclosure Document make the disclosures accurate and complete;

(b) File the amended NASAA Form U-7 showing additions and deletions with the Director for approval;

(c) The offering shall be suspended until the Director approves the amended Form U-7;

(d) The registrant shall report the status of the offering with the Director and file a plan for dealing with its investors.

(7) Registered offerings under a Small Corporate Offering Registration. For an offering registered under this rule, each prospective purchaser of the securities shall be given a copy of the NASAA Form U-7 Disclosure Document (including all amendments) filed with the Director pursuant to this rule at a reasonable time prior to the sale of the security.

Or. Admin. R. 441-065-0225

FCS 4-1992, f. & cert. ef. 10-1-92; FCS 3-1998, f. & cert. ef. 7-2-98; FSR 5-2018, amend filed 04/26/2018, effective5/1/2018

Statutory/Other Authority: ORS 59.065, 59.085, 59.175 & 59.285

Statutes/Other Implemented: ORS 59.065