441-035-0090 Requirements for Exemption From Securities Registration The sale of an OIO by an issuer shall be exempt from the securities registration requirements under ORS 59.055 if the sale is conducted in accordance with the following: (1) Nature of the issuer: An issuer must be an existing Oregon business in compliance with all requirements of the Oregon Secretary of State in order to do business in Oregon. The OIO exemption cannot be applied if the issuer, or a person affiliated with the issuer, would be disqualified under OAR 441-035-0210. (2)(a) Compliance with Federal Laws: The offer and sale must be conducted in accordance with SEC Rule 147A (17 CFR §230.147A). (b) Issuers that properly filed an OIO offering prior to July 7, 2017 in reliance on section 3(a)(11) of the Securities Act of 1933, as amended, including , SEC Rule 147, must notify the director that the continued offer and sale will comply with subsection 2(a) of this rule. (3) (a) Nature of the Purchaser: OIO securities may only be offered or sold to natural persons who the issuer, salesperson, or broker-dealer reasonably believes are residents of the state of Oregon and otherwise qualify under these rules. (b) Prior to any sale under the OIO exemption, the issuer, salesperson, or broker-dealer, must obtain reasonable documentary evidence that the prospective purchaser’s principal residence is in Oregon. (A) Reasonable documentary evidence includes, but is not limited to: a current Oregon Driver License or a current personal identification card issued by the State of Oregon; or document that indicates the prospective purchaser owns or occupies property in the state as his or her principal residence, such as a current voter registration, or official business mail from a state or federal agency. (B) A signed statement, without additional evidence, is not sufficient to establish a reasonable belief that the purchaser is an Oregon resident. (4)(a) Duration of the Offering: The duration of an OIO is limited to twelve (12) months, from the date a security is first sold in reliance on this exemption. An offering may be extended for one additional consecutive twelve (12) month period, using the procedures established in subsection (b) An offering period may not exceed a total of twenty four (24) months from the date of the initial sale. (b) An issuer may apply to extend the offering by submitting an amended filing with the Director in conformance with these rules, on a form approved by the Director. (c) An issuer must notify the director within five (5) days of the first sale of an OIO security. (5) Offering Amounts: (a) Subject to integration under OAR 441-035-0190, an issuer may engage in multiple OIOs, however the total amount raised during any individual 12 month offering period, or 24 month period if the issuer applies to extend the offering, is limited to two hundred fifty thousand dollars ($250,000). (b) The OIO can be used to raise a maximum of five hundred thousand dollars ($500,000) in the aggregate. (6) Investor Limits: An issuer may not accept more than two thousand five hundred dollars ($2,500) from any individual in reliance on the OIO exemption unless the Alternate Maximum Investment in (a) applies: (a) A person whose income exceeded $100,000 for the past two consecutive years and who reasonably expects their income to be in excess of $100,000 for the current year, and who has a net worth not including their principal residence of $200,000 may invest up to $10,000. (b) For the purposes of the Alternative Maximum Investment in (a), an issuer, broker-dealer, or salesperson, must have formed a reasonable belief based on review of documentation and signed declarations from the prospective purchaser that they satisfy the income and net worth thresholds. (c) An issuer which sells a security under the Alternate Maximum Investment may only engage in a single transaction at the alternate maximum investor limit per spousal unit. The securities subject to the Alternate Maximum Investment may be held jointly or individually. (7) Prerequisite for Issuer: Issuers offering or selling OIO securities must have met in person and reviewed their business plan with a business technical service provider prior to advertising, offering or selling securities. (8) Securities sold in reliance on this exemption are limited to notes, stocks, and debentures. (9) All proceeds from the sale of OIO securities must be used in accordance with representations made to investors, including the disclosures required under OAR 441-035-0120. Statutory/Other Authority: ORS 59.035 & 17 CFR § 230.147A Statutes/Other Implemented: ORS 59.035 History: FSR 12-2017, amend filed 12/28/2017, effective 01/01/2018 FSR 8-2017(Temp), f. & cert. ef. 7-12-17 thru 1-7-18 FCS 1-2015, f. & cert. ef. 1-15-15