Oklahoma Administrative Code › Title 660 - Department of Securities › Chapter 11 - Oklahoma Uniform Securities Act of 2004 › Subchapter 11 - Exemptions from Securities Registration › Part 5 - EXEMPT TRANSACTIONS › Section 660:11-11-54 - Intrastate offering exemption

Current through Vol. 41, No. 20, July 1, 2024
(a)
Terms of
				  the Exemption.
Under the authority of Section 1-202.25 of the Securities
				  Act, transactions meeting the following conditions are exempt from Sections
				  1-301 and 1-504 of the Securities Act:
(1)
Intrastate offers and sales.
The issuer meets all of the
				  requirements set forth in Section 1-202.25 of the Securities Act.
(2)
Minimum offering amount.
Investors shall receive a return of all their subscription funds if the minimum
				  offering amount is not raised by the time stated in the disclosure document.
				  Non-cash contributions from control persons or other insiders shall not be
				  considered in fulfilling the minimum offering amount
(3)
Initial notice filing.
The
				  issuer, at least ten (10) business days prior to the first sale of the
				  securities, shall file a notice of the proposed offering directly with the
				  Department. The notice must include the following:
(A) the names and addresses of the issuer,
				  all persons who will be involved in the offer or sale of securities on behalf
				  of the issuer, and any bank or other depository institution in which investor
				  funds will be deposited;
(B) a copy
				  of the disclosure document to be provided to each prospective purchaser in
				  connection with the offering within a reasonable period of time before the date
				  of sale containing at least the following:
(i) the name, legal status, physical address,
				  and website address of the issuer;
(ii) the names of the directors, officers,
				  and any other control persons with descriptions of each person's background and
				  qualifications;
(iii) a description
				  of the business of the issuer and the anticipated business plan of the
				  issuer;
(iv) a description of the
				  stated purpose and intended use of the proceeds of the offering sought by the
				  issuer, including compensation paid to any officer, director, or control
				  person;
(v) the target offering
				  amount and the deadline to reach the target offering amount, and any minimum
				  amount required to close the offering if such minimum is less than the target
				  offering amount;
(vi) the amount of
				  commission or other renumeration to be paid to any broker-dealer or agent
				  involved in the offer or sale of the securities;
(vii) financial information about the issuer,
				  certified by the issuer's chief executive officer and chief financial officer,
				  or other individual serving in a similar capacity, to be true and complete in
				  all material respects, including:
(I) annual
				  financial statements, unless the issuer is newly organized and has not reached
				  its first fiscal year end, that are dated as of the end of the issuer's most
				  recently completed fiscal year; are prepared in accordance with generally
				  accepted accounting principles in the United States; include a balance sheet,
				  statement of income, statement of cash flows, statement of changes in
				  stockholders' equity and notes to the financial statements; and comply with the
				  applicable standard set forth in (4) of this subsection; and
(II) interim financial statements including
				  an unaudited balance sheet and statement of income for the issuer's most
				  recently completed fiscal quarter, but only if the issuer is newly organized
				  and has not reached its first fiscal year end or the date of the issuer's most
				  recently completed fiscal year end is more than one hundred twenty (120) days
				  prior to the date of filing.
(C) a description of any litigation, legal
				  proceedings, or pending regulatory action involving the issuer, its officers,
				  directors, or control persons;
(D)
				  a statement that:
(i) sales will only be made
				  to any one person in an amount up to $5,000.00 unless the persons are
				  accredited investors as that term is defined in Rule 501 of Regulation D of the
				  Securities Act of 1933 (17 C.F.R.
				  230.501);
(ii) sales will only be made to residents of
				  the state of Oklahoma at the time of the sale of the security;
(iii) the securities have not been registered
				  with or approved by the state of Oklahoma and are being offered and sold
				  pursuant to an exemption from registration and, therefore, cannot be resold
				  unless the securities are registered or qualify for an exemption from
				  registration under federal and state law;
(iv) for a period of six (6) months from the
				  date of the sale by the issuer of the securities, any resale of the securities
				  (or the underlying securities in the case of convertible securities) shall be
				  made only to persons resident within the state of Oklahoma; and
(v) there is no ready market for the sale of
				  the securities acquired from this offering and it may be difficult or
				  impossible for a purchaser to sell or otherwise dispose of this
				  investment;
(E) a copy of
				  the escrow agreement;
(F) a consent
				  to service of process on Form U-2 and (if applicable) Form U-2A; and
(G) the fee as set forth in Section 1-612 of
				  the Securities Act.
(4)
Annual financial statement standards.
The annual financial
				  statements required in (3)(B)(vii)(I) of this subsection must meet the
				  following applicable standard:
(A) For
				  offerings that have an aggregate offering amount of $500,000 or less, the
				  issuer may provide unaudited and unreviewed financial statements. However, if
				  the issuer has obtained financial statements that have been compiled, reviewed,
				  or audited by an independent certified public accountant, the issuer must
				  provide those financial statements;
(B) For offering that have an aggregate
				  offering amount of more than $500,000 but less than $1,000,000, the financial
				  statements must be compiled by an independent certified public accountant.
				  However, if the issuer has obtained financial statements that have either been
				  reviewed or audited by an independent certified public accountant, the issuer
				  must provide those financial statements; or
(C) For offerings that have an aggregate
				  offering amount of $1,000,000 or more, the financial statements must be
				  reviewed by an independent certified public accountant. However, if the issuer
				  has obtained financial statements that have been audited by an independent
				  certified public accountant, the issuer must provide those financial
				  statements.
(5)
Continuing notice filings.
For offerings that continue beyond one
				  year from the commencement date of the offering, the issuer shall file with the
				  Department, no later than thirty (30) days after the end of each quarter,
				  updated interim financial statements including an unaudited balance sheet and
				  statement of income for the issuer's most recently completed fiscal quarter,
				  certified by the issuer's chief executive officer and chief financial officer,
				  or other individual serving in a similar capacity, to be true and complete in
				  all material respects.
(6)
Final notice filing.
The issuer shall file with the Department, no
				  later than thirty (30) days after the termination of the offering, a final
				  notice that the offering has been terminated. The final notice must include the
				  following:
(A) the Oklahoma exemption file
				  number for the offering of securities to which the final notice
				  relates;
(B) the commencement date
				  of the offering and the termination date of the offering;
(C) a sales report that discloses the dollar
				  amount of securities sold in Oklahoma in connection with the offering, in the
				  following format:
(i) Beginning offering
				  amount;
(ii) Minus: Amount sold
				  during the offering;
(iii) Balance
				  unsold at the termination of the offering; and
(D) If the offering did not achieve the
				  minimum offering amount, the issuer shall provide written confirmation to the
				  Department that all offering proceeds that were raised in the offering were
				  returned to each purchaser and that each purchaser did receive their investment
				  proceeds.
(7)
Fees.
There are no fees required to be paid for the continuing
				  notices or the final notice.
(8)
Piecemeal filings.
Any notice required under this section is not
				  considered filed if it is incomplete. Piecemeal filings shall not be
				  accepted.
(9)
Required
				  legend.
The issuer shall, in connection with any securities sold by it
				  under this Section, place a prominent legend on the certificate or other
				  document evidencing the security stating that: "Offers and sales of these
				  securities were made under an exemption from registration and have not been
				  registered under the Securities Act of 1933 or the Oklahoma Uniform Securities
				  Act of 2004. For a period of six months from the date of the sale by the issuer
				  of these securities, any resale of these securities (or the underlying
				  securities in the case of convertible securities) shall be made only to persons
				  resident within the state of Oklahoma."
(10)
Evidence from purchaser.
The issuer shall obtain from each purchaser a written representation of
				  residency within the state of Oklahoma before a sale may be made. Such
				  representation shall include an affirmation made by the purchaser that the
				  purchaser is at least eighteen (18) years of age and purchasing the securities
				  for investment. The issuer shall also obtain a copy of any one of the following
				  from the purchaser:
(A) valid Oklahoma
				  driver's license or official identification card issued by the State of
				  Oklahoma;
(B) current Oklahoma
				  voter registration card; or
(C)
				  county property tax records showing the individual owns and occupies property
				  in Oklahoma as his or her primary residence.