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(a) As an alternative to the registration
procedure contained in 3 AAC 08.5003 AAC 08.506, a corporation issuing
securities that are exempt from registration with the Securities
and Exchange Commission under Rule 504 of Regulation D, 17 CFR 230.504,
or under Section 3(a)(11) of the Securities Act of 1933,15 U.S.C.
77c, may use registration Form
U-7 as the disclosure document for the offering.
(b) The administrator will, in the administrators discretion, for
good cause shown, waive or modify any of the requirements of 3 AAC
08.6003 AAC 08.650.
(c) The administrator reserves the right to apply any of the provisions
of 3 AAC 08.0803 AAC 08.230 to offerings under 3 AAC 08.6003 AAC
08.660 if the administrator determines that that application, even
in the small business offering context, is necessary for the protection
of investors. (Eff. 9/18/91, Register 119)
To be eligible to use
Form U-7,
- the corporation must be organized
under the laws of one of the states or possessions of the United
States, and must engage in or propose to engage in a business
other than petroleum exploration or production, mining, or other
extractive industry;
- the offering must describe the
specific business, properties, and use of all proceeds; so-called
blind pool offerings are ineligible;
- the securities must be offered
and sold only on behalf of the corporation;
Form U-7 may not be used by a selling security-holder, including
an affiliate of the corporation, purchasing underwriters in
a firm commitment underwriting, or any other person, to register
the securities for resale;
- the offering price for common
stock, the exercise price if the securities are options, warrants
or rights for common stock, or the conversion price if the securities
are convertible into common stock, must be equal to or greater
than $5 per share;
- the corporation may not split
its common stock or declare a stock dividend for two years after
the effective date of the registration, except in connection
with a subsequent registered public offering upon application
and written consent of the administrator;
- commissions, fees, or other remuneration
for soliciting a prospective purchaser in Alaska in connection
with an offering made under 3 AAC 08.6003 AAC 08.650 may be
paid only to a person who the corporation reasonably believes
is appropriately registered, if required;
- the aggregate offering price of
the securities inside or outside this state may not exceed $1,000,000,
less the aggregate offering price for all securities sold, (A)
within the 12 months before the start of and during the offering
of the securities, under 17 CFR 230.504 (SEC Rule 504) that
relied on an exemption under Section 3(b) of the Securities
Act of 1933, 15 U.S.C. 77c, or (B) in violation of Section 5(a)
of that Act, 15 U.S.C. 77e;
Form U-7 is not available to a corporation that is an investment
company, including a mutual fund, or is subject to the reporting
requirements of 13 or 15(d) of the Securities Exchange Act of
1934, 15 U.S.C. 77m and 15 U.S.C. 78o-5, respectively;
- the corporation must file with
the Securities and Exchange Commission a Form D claiming exemption
of the offering from registration under 17 C.F.R. 230.504 (SEC
Rule 504), and a copy of the form with appropriate state signature
pages must be filed with the administrator at the same time
that it is filed with the Securities and Exchange Commission;
- for registration of debt offerings,
the corporation must demonstrate a reasonable ability to service
its debt. (Eff. 9/18/91, Register 119)
(a)
Form U-7 may not be used if the corporation or any of its officers,
directors, 10 percent stockholders, promoters, or any selling agents
of the securities to be offered, or any officer, director, or partner
of a selling agent
- has filed a registration statement
that is the subject of a currently effective registration stop
order entered under a federal or state securities law within
the five years before the filing of the registration application;
- has been convicted, within the
five years before the filing of the application for registration,
of (A) a misdemeanor in connection with the offer, purchase,
or sale of any security, or (B) any felony;
- is currently subject to an administrative
enforcement order or judgment, entered within the five years
before the filing of the application for registration, by (A)
any states securities administrator or the Securities and Exchange
Commission, or (B) any other agency of any state or the federal
government for fraud or deceit, including the making of untrue
statements of material facts or omitting to state material facts;
- is subject to an administrative
enforcement order or judgment of any state that prohibits, denies,
or revokes the use of any exemption for registration in connection
with the subject offer, purchase, or sale of securities;
- is currently subject to an order,
judgment, or decree of a court temporarily or permanently restraining
or enjoining that party from engaging in or continuing any conduct
or practice in connection with the purchase or sale of any security,
or involving the making of any false filing with any state or
with the Securities and Exchange Commission, entered within
the five years before the filing of the application for registration.
(b) The disqualifications contained
in (a)(1)(3) and (5) of this section do not apply if
- the person subject to the disqualification
is licensed or registered to conduct securities-related business
in the state in which the administrative order or judgment was
entered, or if the broker-dealer employing that person is licensed
or registered in this state and the Form BD filed with the administrator
discloses the order, conviction, judgment, or decree, and
- the person acts only in the capacity
for which the person is licensed or registered.
(c) A disqualification under this section
does not apply if the state securities administrator or other state
or federal agency that created the basis for the disqualification
determines, upon a showing of good cause, that it is not necessary
under the circumstances that the use of
Form U-7 be denied. (d) If any of the circumstances set out
in (a)(1)(3) and (5) of this section occurred more than five years
before the date of the application for registration, the circumstances
must be described on Form U-7
as a Miscellaneous Factor. (Eff. 9/18/91, Register 119)
In addition to filing a properly completed
and signed Form U-7, a corporation
must file with the administrator a Form U-1, Uniform Application
to Register Securities. References in the Form U-1 to Securities
and Exchange Commission registration and effectiveness and Questions
6 and 8(a) of the form are inapplicable. The following documents
must be filed as exhibits to the Form U-1:
- a representative form of the Selling
Agency Agreements;
- a copy of the corporation's Articles
of Incorporation or other charter documents, and all amendments
to the documents;
- a copy of the corporation's bylaws,
as amended to date;
- a copy of any resolutions by directors
setting out terms and provisions of capital stock to be issued;
- a copy of any indenture, note,
or other contractual provision for debt, or of any options,
warrants, or rights to be offered;
- a specimen of the security to
be offered, including any legend restricting resale;
- a Form U-2, Consent to Service
of Process, and an appropriate Form U-2A, Corporate Resolution;
- copies of all advertising or other
materials directed at or to be furnished to investors in the
offering;
- a form of escrow agreement for
the escrow of proceeds of the offering;
- consent to inclusion in the Disclosure
Document of an accountants report;
- consent to inclusion in the Disclosure
Document of a tax advisors opinion or description of tax consequences
- consent to inclusion in the Disclosure
Document of any evaluation of litigation or administrative action
by counsel;
- copies of any Subscription Agreement
forms for the purchase of securities in the offering;
- an opinion of an attorney, licensed
to practice in a state or territory of the United States, that
the securities to be sold in the offering have been authorized
and, when issued upon payment of the offering price, will be
legally and validly issued, fully paid, and nonassessable and
binding on the corporation in accordance with their terms;
- a schedule of the resident street
addresses of officers, directors, and principal stockholders;
and
- copies of work sheets showing
computations for responses to Questions 6, 7(a), 8(a), 8(b),
and 17(b) of Form U-7.
(Eff. 9/18/91, Register 119)
(a) The corporation shall pay a registration
and filing fee as provided in 3 AAC 08.080(e) for the registration
of the offering under Form U-7.
(b) Up to five salespeople may be registered as agents of the corporation
and be exempt from the examination requirement of 3 AAC 08.010(f).
To register, the corporation must file an application for registration
and pay a $75 registration fee. No salesperson may be registered
to more than one corporation at a time without compliance with the
dual registration provisions of 3 AAC 08.010(d).
(c) Within 30 days after the expiration date on the order of registration,
the completion of the offering, or the termination of the offering,
whichever occurs first, the corporation shall file a report of sales
with the administrator.
(d) Failure to file the report under (c) of this section in a timely
manner will not by itself invalidate the registration of securities
under this section; however, the corporation bears the burden of
proving that the failure to file the report was due to mistake or
inadvertence, and was not due to fraud or any intent to evade a
regulation or statute.
(e) If a report is not filed under (c) of this section in a timely
manner, the administrator will, in the administrators discretion,
examine the corporation and all parties involved in the failure
to file the required report. Any expenses incurred by the department
in an examination under this section must be paid by the corporation.
(f) For a period of three years following the closing of the offering,
the corporation shall maintain and keep open for inspection by the
administrator
- all offering materials;
- all records relating to purchasers;
and
- all records relating to securities
sales following the close of the offering that are considered
as part of the offering. (Eff. 9/18/91, Register 119)
(a) If promotional shares of an offering
registered under 3 AAC 08.600 3 AAC 08.650 will exceed 60 percent
of the outstanding shares upon completion of the offering, those
promotional shares in excess of 60 percent of the outstanding shares
must be placed in escrow under 3 AAC 08.180.
(b) If the proposed business of the corporation requires a minimum amount
of proceeds to commence or continue the business in the manner proposed,
the corporation shall establish an escrow with a bank, savings and loan
association, other similar depository institution, or an independent escrow
agent approved by the administrator, in accordance with 3 AAC 08.502(g).
All proceeds received from investors must be deposited immediately with
the agent until the minimum required amount of proceeds has been raised.
The escrow agreement must provide that if the minimum proceeds are not raised,
the escrow agent will return the money to investors within one year after
the effective date of the registration. 3 AAC 08.502(g)(2)(C) does not apply
to an escrow established under this section. (Eff. 9/18/91, Register 119)
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