61-1-10 - Registration by qualification.
61-1-10. Registration by qualification.
(1) Application may be made to register any security by qualification.
(2) A registration statement under this section shall contain the following informationand be accompanied by the following documents in addition to the information specified inSubsection 61-1-11(3) and the consent to service of process required by Section 61-1-26:
(a) with respect to the issuer and any significant subsidiary:
(i) its name, address, and form of organization;
(ii) the state or foreign jurisdiction and date of its organization;
(iii) the general character and location of its business;
(iv) a description of its physical properties and equipment; and
(v) a statement of the general competitive conditions in the industry or business in whichit is or will be engaged;
(b) with respect to every director and officer of the issuer or person occupying a similarstatus or performing similar functions:
(i) his name, address, and principal occupation for the past five years;
(ii) the amount of securities of the issuer held by him as of a specified date within 30days of the filing of the registration statement;
(iii) the amount of the securities covered by the registration statement to which he hasindicated his intention to subscribe; and
(iv) a description of any material interest in any material transaction with the issuer orany significant subsidiary affected within the past three years or proposed to be affected;
(c) with respect to persons covered by Subsection (2)(b), the remuneration paid duringthe past 12 months and estimated to be paid during the next 12 months, directly or indirectly, bythe issuer, together with all predecessors, parents, subsidiaries, and affiliates, to all those personsin the aggregate;
(d) with respect to any person owning of record, or beneficially if known, 10% or moreof the outstanding shares of any class of equity security of the issuer, the information specified inSubsection (2)(b) other than the person's occupation;
(e) with respect to every promoter if the issuer was organized within the past three years,the information specified in Subsection (2)(b), any amount paid to the promoter within thatperiod or intended to be paid to the promoter, and the consideration for any such payment;
(f) with respect to any person on whose behalf any part of the offering is to be made in anonissuer distribution:
(i) the person's name and address;
(ii) the amount of securities of the issuer held by the person as of the date of filing of theregistration statement;
(iii) a description of any material interest in any material transaction with the issuer orany significant subsidiary effected within the past three years or proposed to be effected; and
(iv) a statement of the person's reasons for making the offering;
(g) the capitalization and long-term debt, on both a current and pro forma basis, of theissuer and any significant subsidiary, including a description of each security outstanding orbeing registered or otherwise offered, and a statement of the amount and kind of consideration,whether in the form of cash, physical assets, services, patents, goodwill, or anything else, forwhich the issuer or any subsidiary has issued any of its securities within the past two years or isobligated to issue any of its securities;
(h) (i) the kind and amount of securities to be offered;
(ii) the proposed offering price or the method by which it is to be computed;
(iii) any variation therefrom at which any proportion of the offering is to be made to anyperson or class of persons other than the underwriters, with a specification of any such person orclass;
(iv) the basis upon which the offering is to be made if otherwise than for cash;
(v) the estimated aggregate underwriting and selling discounts or commissions andfinders' fees, including separately cash, securities, contracts, or anything else of value to accrue tothe underwriters or finders in connection with the offering, or, if the selling discounts orcommissions are variable, the basis of determining them and their maximum and minimumamounts;
(vi) the estimated amounts of other selling expenses, including legal, engineering, andaccounting charges;
(vii) the name and address of every underwriter and every recipient of a finder's fee;
(viii) a copy of any underwriting or selling-group agreement under which the distributionis to be made, or the proposed form of any such agreement whose terms have not yet beendetermined; and
(ix) a description of the plan of distribution of any securities which are to be offeredotherwise than through an underwriter;
(i) (i) the estimated cash proceeds to be received by the issuer from the offering;
(ii) the purposes for which the proceeds are to be used by the issuer;
(iii) the amount to be used for each purpose;
(iv) the order or priority in which the proceeds will be used for the purposes stated;
(v) the amounts of any funds to be raised from other sources to achieve the purposesstated; the sources of any such funds; and
(vi) if any part of the proceeds is to be used to acquire any property, including goodwill,otherwise than in the ordinary course of business, the names and addresses of the vendors, thepurchase price, the names of any persons who have received commissions in connection with theacquisition, and the amounts of any such commissions and any other expense in connection withthe acquisition, including the cost of borrowing money to finance the acquisition;
(j) a description of any stock options or other security options outstanding, or to becreated in connection with the offering, together with the amount of any such option held or to beheld by every person required to be named in Subsection (2)(b), (d), (e), (f), or (h) and by anyperson who holds or will hold 10% or more in the aggregate of any such options;
(k) (i) the dates of, parties to, and general effect concisely stated of, every managementor other material contract made or to be made otherwise than in the ordinary course of business ifit is to be performed in whole or in part at or after the filing of the registration statement or wasmade within the past two years, together with a copy of every such contract; and
(ii) a description of any pending litigation or proceeding to which the issuer is a party andwhich materially affects its business or assets, including any such litigation or proceeding knownto be contemplated by governmental authorities;
(l) a copy of any prospectus, pamphlet, circular, form letter, advertisement, or other salesliterature intended as of the effective date to be used in connection with the offering;
(m) (i) a specimen copy of the security being registered;
(ii) a copy of the issuer's articles of incorporation, and bylaws, if any, or their substantial
equivalents, as currently in effect; and
(iii) a copy of any indenture or other instrument covering the security to be registered;
(n) a signed or conformed copy of an opinion of counsel as to the legality of the securitybeing registered, with an English translation if it is in a foreign language, which shall statewhether the security when sold will be legally issued, fully paid, and nonassessable, and if a debtsecurity, a binding obligation of the issuer;
(o) the written consent of any accountant, engineer, appraiser, or other person whoseprofession gives authority to a statement made by him, if that person is named as having preparedor certified a report or valuation, other than a public and official document or statement, which isused in connection with the registration statement;
(p) (i) a balance sheet of the issuer as of a date within four months prior to the filing ofthe registration statement;
(ii) a profit and loss statement and analysis of retained earnings for each of the threefiscal years preceding the date of the balance sheet and for any period between the close of thelast fiscal year and the date of the balance sheet, or for the period of the issuer's and anypredecessors' existence if less than three years; and
(iii) if any part of the proceeds of the offering is to be applied to the purchase of anybusiness, the same financial statements which would be required if that business were theregistrant; and
(q) such additional information or verification of any statement as the division requiresby rule or order.
(3) A registration statement under this section becomes effective when the division soorders.
(4) As a condition of registration under this section, a prospectus containing theinformation, but not containing copies of contracts or agreements specified in Subsections (2)(a)through (k) and (p) shall be sent or given to each person to whom an offer is made before orconcurrently with:
(a) the first written offer made to the person, otherwise than by means of a publicadvertisement, by or for the account of the issuer or any other person on whose behalf theoffering is being made, or by any underwriter or broker-dealer who is offering part of an unsoldallotment or subscription taken by the person as a participant in the distribution;
(b) the confirmation of any sale made by or for the account of any such person;
(c) payment pursuant to any such sale; or
(d) delivery of the security pursuant to any such sale, whichever occurs first.
Amended by Chapter 324, 2010 General Session