Virginia Administrative Code › Title 21 - SECURITIES AND RETAIL FRANCHISING › Agency 5 - STATE CORPORATION COMMISSION › Chapter 40 - EXEMPT SECURITIES AND TRANSACTIONS › Section 21VAC5-40-70 - Solicitations of interest prior to the filing of a registration statement

Current through Register Vol. 40, No. 24, July 15, 2024
A. In accordance
				with § 13.1-514.1C of the Act, an offer, but not a sale, of a security
				made by or on behalf of an issuer for the sole purpose of soliciting an
				indication of interest in receiving a prospectus (or its equivalent) for the
				security is exempt from the securities and, where the offer is made by an agent
				of the issuer, agent registration requirements of the Act if all of the
				conditions set forth in subdivisions 1 through 11, below, are satisfied:
1. The issuer is or will be a business entity
				organized under the laws of one of the states or possessions of the United
				States or one of the provinces or territories of Canada and is engaged in or
				proposes to engage in a business other than petroleum exploration or production
				or mining or other extractive industries;
2. The solicitation of interest is not for a
				so-called "blind pool" offering or other offering for which the specific
				business in which to be engaged or property to be acquired cannot be described
				at the time of the solicitation;
3.
				It is intended that the security be registered under the Act and that the
				offering be conducted pursuant to either Regulation A ( 17 CFR §§
				230.251 - 230.263 ) or Rule 504 of Regulation D ( 17 CFR §§ 230.501 -
				230.508 ), as promulgated by the United States Securities and Exchange
				Commission;
4. At least 10 business
				days prior to the initial solicitation of interest under this section, the
				offeror files with the State Corporation Commission a Solicitation of Interest
				Form along with any other materials to be used to conduct solicitations of
				interest, including, but not limited to, the script of any broadcast to be made
				and a copy of any notice to be published;
5. At least five business days prior to
				usage, the offeror files with the State Corporation Commission any amendments
				to the materials specified in subdivision 4, above, or additional materials to
				be used to conduct solicitations of interest, except for materials provided to
				a particular offeree pursuant to a request by that offeree, which materials
				shall be filed with the Commission no later than five business days after
				usage;
6. No Solicitation of
				Interest form, script, advertisement or other material which the offeror has
				been notified by the State Corporation Commission not to distribute is used to
				solicit indications of interest;
7.
				Except for scripted broadcasts and except to the extent necessary to obtain
				information needed to provide a Solicitation of Interest form, the offeror does
				not communicate with an offeree about the contemplated offering unless the
				offeree is provided with the most current Solicitation of Interest form at or
				before the time of the communication or within five calendar days after the
				communication;
8. During the
				solicitation of interest period, the offeror does not solicit or accept money
				or a commitment to purchase securities;
9. No sale is made until at least seven
				calendar days after delivery to the purchaser of a prospectus which is part of
				a registration statement declared effective under § 13.1-508 or §
				13.1-510 of the Act;
10. No sale of
				the security is consummated by any person who is not registered under or
				exempted from registration by the Act as a broker-dealer or an agent;
11. The offeror does not know, and in the
				exercise of reasonable care, could not know that any of the issuer's officers,
				directors, agents, 10% shareholders or promoters:
a. Has filed a registration statement which
				is the subject of a currently effective registration stop order entered
				pursuant to a federal or state securities law within five years prior to the
				filing of the Solicitation of Interest form;
b. Has been convicted within five years prior
				to the filing of the Solicitation of Interest form of a felony or misdemeanor
				in connection with the offer, purchase or sale of a security or a felony
				involving fraud or deceit, including but not limited to forgery, embezzlement,
				obtaining money under false pretenses, larceny, or conspiracy to
				defraud;
c. Is currently subject to
				a federal or state administrative enforcement order or judgment entered by any
				state securities administrator or the United States Securities and Exchange
				Commission within five years prior to the filing of the Solicitation of
				Interest form or is subject to a federal or state administrative enforcement
				order or judgment entered within five years prior to the filing of the
				Solicitation of Interest form in which fraud or deceit, including, but not
				limited to, making untrue statements of material facts and omitting to state
				material facts, was found;
d. Is
				subject to a federal or state administrative enforcement order or judgment
				which prohibits, denies, or revokes the use of an exemption from registration
				in connection with the offer, purchase or sale of securities; or
e. Is currently subject to an order,
				judgment, or decree of a court of competent jurisdiction temporarily or
				preliminarily restraining or enjoining, or is subject to an order, judgment or
				decree of a court of competent jurisdiction, permanently restraining or
				enjoining, the party from engaging in or continuing a conduct or practice in
				connection with the purchase or sale of a security or involving the making of a
				false filing with the state entered within five years prior to the filing of
				the Solicitation of Interest form.
The prohibitions listed above shall not apply if the person
				  subject to the disqualification is duly licensed or registered to conduct
				  securities related business in the state in which the administrative order or
				  judgment was entered against the person or if the broker-dealer employing the
				  party is licensed or registered in this state and the Form B-D filed with this
				  Commonwealth discloses the order, conviction, judgment or decree relating to
				  the person. No person disqualified under this subdivision 11 shall act in a
				  capacity other than that for which the person is licensed or registered. A
				  disqualification caused by this subdivision 11 is automatically waived if the
				  agency which created the basis for disqualification determines upon a showing
				  of good cause that it is not necessary under the circumstances that the
				  exemption be denied.