Kansas Administrative Regulations › Agency 81 - OFFICE OF THE SECURITIES COMMISSIONER › Article 5 - EXEMPTIONS › Section 81-5-18 - Notice filing requirements for securities of agricultural associations

Current through Register Vol. 43, No. 28, July 11, 2024
(a) Exemption. The
			 sale of a security of a cooperative organized under K.S.A. 17-1601  et seq., and
			 amendments thereto, to a person who is not a member pursuant to K.S.A. 17-1606,
			 and amendments thereto, shall be exempt from the requirements of K.S.A.
			 17-12a301  through 17-12a306  and K.S.A. 17-12a504, and amendments thereto, if
			 the following requirements are met:
(1) The
			 cooperative shall file a notice with the administrator that includes the
			 following items:
(A) A filing fee as
			 specified in K.A.R. 81-5-8;
(B) a
			 copy of any underwriting or selling agreements;
(C) a copy of the cooperative's bylaws,
			 operating agreement, or similar document;
(D) a copy of a prospectus that discloses all
			 material facts concerning the investment, including the following information:
(i) The name and address of the cooperative;
(ii) a description of the security
			 being offered;
(iii) the total
			 amount of securities being issued;
(iv) a brief summary of key aspects of the
			 offering;
(v) a description of the
			 material risks associated with the offering, which may include risk factors
			 related to unprofitable operations, unsound financial condition, absence of a
			 market for the cooperative's securities, inexperience of management, and
			 dependence upon a particular customer or group of customers; risks affecting
			 the industry as a whole; and any other facts that tend to make the offering
			 more risky;
(vi) a description of
			 the business or proposed business;
(vii) a description of the proposed use of
			 proceeds, in an itemized format;
(viii) a description of the responsibilities,
			 experience, and compensation of directors, officers, and any other persons
			 having similar status or performing similar functions for the cooperative;
(ix) a description of the plan of
			 distribution for the securities;
(x) a summary of the cooperative's
			 capitalization;
(xi) a description
			 of any pending litigation, action, or proceeding to which the cooperative is a
			 party and that materially affects its business or assets, and any litigation,
			 action, or proceeding known to be contemplated by governmental authorities;
(xii) a description of the general
			 federal and state tax consequences of owning the security; and
(xiii) the historical financial statements
			 for the past three fiscal years or since the cooperative's inception, whichever
			 period is shorter, that are in conformity with GAAP, the most recent of which
			 have been audited by a CPA. If the balance sheet in the financial statements is
			 more than 120 days old on the date the notice is filed with the administrator,
			 then interim financial statements made in conformity with GAAP and not more
			 than 120 days old shall be included in the prospectus;
(E) a copy of any advertising materials or
			 any summaries of the offering document to be used in the offer or sale of the
			 securities in Kansas;
(F) a copy
			 of the subscription agreement;
(G)
			 the name, business address, and a brief description of the employment
			 responsibilities of each agent who will represent the cooperative in the offer
			 or sale of the securities in Kansas;
(H) a copy of the trust indenture if the
			 offering involves debt securities; and
(I) any other relevant information or
			 document requested by the administrator.