Kansas Administrative Regulations › Agency 81 - OFFICE OF THE SECURITIES COMMISSIONER › Article 5 - EXEMPTIONS › Section 81-5-21 - Invest Kansas exemption

Current through Register Vol. 43, No. 28, July 11, 2024
(a) Exemption
					from registration requirements. The offer or sale of a security by an issuer
					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 offer or sale is conducted in
					accordance with each of the following requirements:
(1) The issuer of the security shall be a
					business or organization formed under the laws of the state of Kansas and
					registered with the secretary of state.
(2) The transaction shall meet the
					requirements of the federal exemption for intrastate offerings in section 3(a)
					(11) of the securities act of 1933,  15 U.S.C. §
										77 c(a)(11), and SEC rule
					147,  17 C.F.R. 230.147, as adopted by reference in   K.A.R. 81-2-1.
(3) The sum of all cash and other
					consideration to be received for all sales of securities in reliance upon this
					exemption shall not exceed $1,000,000, less the aggregate amount received for
					all sales of securities by the issuer within the 12 months before the first
					offer or sale made in reliance upon this exemption.
(4) The issuer shall not accept more than
					$5,000 from any single purchaser unless the purchaser is an accredited investor
					as defined by rule 501 of SEC regulation D,  17 C.F.R. 230.501, as adopted by
					reference in   K.A.R. 81-2-1. Two or more individual purchasers residing at the
					same primary residence who are not accredited investors and have a close family
					relationship shall be treated as a single purchaser for purposes of the $5,000
					limit.
(5) A commission or other
					remuneration shall not be paid or given, directly or indirectly, for any
					person's participation in the offer or sale of securities for the issuer unless
					the person is registered as a broker-dealer or agent under the act.
(6) All funds received from investors shall
					be deposited into a bank or depository institution authorized to do business in
					Kansas, and all the funds shall be used in accordance with representations made
					to investors.
(7) Before the use of
					any general solicitation, the issuer shall file a notice with the administrator
					on form IKE, providing the names and addresses of the following persons:
(A) The issuer;
(B) all persons who will be involved in the
					offer or sale of securities on behalf of the issuer; and
(C) the bank or other depository institution
					in which investor funds will be deposited.
(8) The issuer shall not be, either before or
					as a result of the offering, an investment company as defined in section 3 of
					the investment company act of 1940,  15 U.S.C. §
										80a-3, or subject to the
					reporting requirements of section 13 or 15(d) of the securities exchange act of
					1934,  15 U.S.C. § 78 m and 78o(d), as adopted by reference in   K.A.R.
					81-2-1.
(9) The issuer shall inform
					all purchasers that the securities have not been registered under the act and,
					therefore, cannot be resold unless the securities are registered or qualify for
					an exemption from registration under K.S.A. 17-12a202  and amendments thereto,
				 	 K.A.R. 815-3, or  another regulation. In addition, the issuer shall make the
					disclosures required by subsection (f) of SEC rule 147,  17 C.F.R. 230.147(f),
					as adopted by reference in   K.A.R. 81-2-1.