§ 7-11-304 - Registration by qualification.
SECTION 7-11-304
§ 7-11-304 Registration by qualification.– (a) A security may be registered by qualification.
(b) A registration statement under this section contains thefollowing information and is accompanied by the following documents in additionto the information specified in § 7-11-305(c) and the consent to serviceof process required by § 7-11-708:
(1) With respect to the issuer and any significantsubsidiary: its name, address, and form of organization; the state or foreignjurisdiction and date of its organization; the general character and locationof its business; a description of its physical property and equipment; and astatement of the general competitive conditions in the industry or business inwhich it is or will be engaged;
(2) With respect to every director and officer of the issuer,or person occupying a similar status or performing similar functions: name,address, and principal occupation for the last five (5) years; the amount ofsecurities of the issuer held by the person as of a specified date withinthirty (30) days before the filing of the registration statement, the amount ofthe securities covered by the registration statement to which the person hasindicated an intention to subscribe; and a description of any material interestin any material transaction with the issuer or a significant subsidiaryeffected within the last three (3) years or proposed to be effected;
(3) With respect to persons covered by paragraph (2): thecompensation paid or given, directly or indirectly, during the last twelve (12)months and estimated to be paid during the next twelve (12) months, by theissuer, together with all predecessors, parents, subsidiaries, and affiliates,to all those persons in the aggregate;
(4) With respect to a person owning of record, orbeneficially if known, ten percent (10%) or more of the outstanding shares of aclass of equity security of the issuer: the information specified in paragraph(2) other than occupation;
(5) With respect to a promoter if the issuer was organizedwithin the last three (3) years: the information specified in subsection(b)(2), the amount paid to the person within that period or intended to bepaid, and the consideration for the payment;
(6) With respect to a person on whose behalf a part of theoffering is to be made in a non issuer distribution: name and address; theamount of securities of the issuer held by the person as of the date of thefiling of the registration statement; a description of any material interest inany material transaction with the issuer or any significant subsidiary effectedwithin the last three (3) years or proposed to be effected; and a statement ofthe reasons for making the offering;
(7) The capitalization and long-term debt, on both a currentand pro forma basis, of the issuer and any significant subsidiary, including adescription of each security outstanding or being registered or otherwiseoffered, and a statement of the amount and kind of consideration, whether inthe form of cash, physical assets, services, patents, goodwill, or anythingelse, for which the issuer or a subsidiary has issued its securities within thelast two (2) years or is obligated to issue its securities;
(8) The kind and amount of securities to be offered; theproposed offering price or the method by which it is to be computed; anyvariation from the proposed offering price at which a proportion of theoffering is to be made to a person or class of persons other than theunderwriters, with a specification of the person or class; the basis upon whichthe offering is to be made if other than for cash; the estimated aggregateunderwriting and selling discounts or commissions and finders' fees, includingseparately cash, securities, contracts, or anything else of value to accrue tothe underwriters or finders in connection with the offering, or, if the sellingdiscounts or commissions are variable, the basis of determining them and theirmaximum and minimum amounts; the estimated amounts of other selling expenses,including legal, engineering, and accounting charges; the name and address ofevery underwriter and every recipient of a finder's fee; a copy of anyunderwriting or selling group agreement pursuant to which the distribution isto be made, or the proposed form of the agreement whose terms have not yet beendetermined; and a description of the plan of distribution of securities thatare to be offered otherwise than through an underwriter;
(9) The estimated cash proceeds to be received by the issuerfrom the offering; the purposes for which the proceeds are to be used by theissuer; the amount to be used for each purpose; the order or priority in whichthe proceeds will be used for the purposes stated; the amount of funds to beraised from other sources to achieve the purposes stated; the sources of thefunds; and, if part of the proceeds is to be used to acquire property,including goodwill, other than in the ordinary course of business, the namesand addresses of the vendors, the purchase price, the names of the persons whohave received commissions in connection with the acquisition, and the amountsof commissions and any other expense in connection with the acquisition,including the cost of borrowing money to finance the acquisition;
(10) A description of the stock options or other securityoptions outstanding, or to be created in connection with the offering, and theamount of the options held or to be held by every person required to be namedin subdivision (2), (4), (5), (6), or (8) and by a person who holds or willhold ten percent (10%) or more in the aggregate of the options;
(11) The dates of, parties to, and general effect conciselystated of, every management or other material contract made or to be made otherthan in the ordinary course of business if it is to be performed in whole or inpart at or after the filing of the registration statement or was made withinthe last two (2) years; and a copy of the contract;
(12) A description of pending litigation or proceedings towhich the issuer is a party and that materially affect its business or assets,including any litigation or proceeding known to be contemplated by agovernmental authority;
(13) A copy of any prospectus, pamphlet, circular, formletter, advertisement, or other sales literature intended as of the effectivedate to be used in connection with the offering;
(14) A specimen, copy, or description of the securities beingregistered; a copy of the issuer's articles of incorporation and bylaws, ortheir substantial equivalents, as currently in effect; and a copy of anyindenture or other instrument covering the securities to be registered;
(15) A signed or conformed copy of an opinion of counsel asto the legality of the securities being registered, with an English translationif it is in a foreign language, which states whether the securities when soldwill be legally issued, fully paid, and non assessable, and, if debtsecurities, a binding obligation of the issuer;
(16) The written consent of an accountant, engineer,appraiser, or other person whose profession gives authority to a statement madeby the person, if the person is named as having prepared or certified a reportor valuation, other than a public and official document or statement, which isused in connection with the registration statement;
(17) A statement of financial condition of the issuer as of adate within four (4) months before the filing of the registration statement; astatement of results of operations and analysis of surplus for each of thethree (3) fiscal years before the date of the statement of financial conditionand for any period between the close of the last fiscal year and the date ofthe statement of financial condition, or for the period of the issuer's and anypredecessors' existence if less than three (3) years; and, if part of theproceeds of the offering is to be applied to the purchase of a business, thesame financial statements that would be required if the business were theregistrant; and
(18) Any additional information the director specifies byrule or order.
(c) Simplified registration for small businesses.
(1) For purposes of simplifying the registration statementfor smaller offerings and promoting uniformity with other states, the directormay adopt a form to be used as the registration statement for securities beingregistered under this section and sold in offerings in which the aggregateoffering price does not exceed a maximum amount which the director maydetermine. The form need not require all the information included in thissection and may require information not included in this section. The directorat his or her discretion may also provide for expedited consideration orautomatic approval of small offerings exempt from registration with theSecurities and Exchange Commission under 15 U.S.C. § 3(b) which have beenapproved by another state with a review process substantially equivalent to thereview process of the director provided that the other state agrees to providesimilar expedited consideration or automatic approval to securities of RhodeIsland issuers.
(2) The maximum amount that may be raised under thesimplified registration procedures authorized by this subsection (c) does notexceed the aggregate offering price in Regulation D, Rule 230.504, orRegulation A, Rule 230.254 of the Securities Act of 1933 rules of theSecurities and Exchange Commission, or successor rules, whichever aggregateoffering price is greater.
(3) An issuer listed in this subdivision is not eligible tofile applications for simplified registration under this subsection:
(i) Investment companies subject to the federal InvestmentCompany Act of 1940, 15 U.S.C. § 80a-1 et seq.
(ii) An issuer subject to the reporting requirements of§ 13 or 15(d) of the federal Securities Exchange Act of 1934, 15 U.S.C.§ 78m or 78o(d).
(iii) An issuer seeking to register securities for sale bypersons other than the issuer.
(iv) An issuer subject to any of the disqualificationsdescribed in Regulation A, Rule 230.252, subsections (c), (d), and (e) of theSecurities Act of 1933 rules of the Securities and Exchange Commission, orsubject to any of the actions described in § 7-11-212(a)(3), (4), (5),(6), and (7) of this chapter. For purposes of this paragraph, an issuerincludes an issuer's director, officer, ten percent shareholder, promoter orselling agent of the securities to be offered or any officer, director, orpartner of the selling agent. The director for good cause shown may waive theprovisions of this paragraph.
(4) Only an issuer organized as a corporation is eligible forsimplified registration under this subsection.
(d) A registration statement under this section becomeseffective thirty (30) calendar days, or any shorter period as the directorspecifies by rule or order, after the date the registration statement or thelast amendment other than a price amendment is filed, if:
(1) No stop order is in effect and no proceeding is pendingunder § 7-11-306;
(2) The director has not ordered under subsection (d) thateffectiveness be delayed; and
(3) The registrant has not requested that effectiveness bedelayed.
(e) The director may delay effectiveness for a single periodof not more than ninety (90) days if the director determines the registrationstatement is not complete in all material respects and promptly notifies theregistrant of that determination.
(2) The director may delay effectiveness for a single periodof not more than thirty (30) days if the director determines that the delay isnecessary, whether or not the director previously delayed effectiveness undersubsection (d)(1).