§ 5304. Securities registration by qualification
(a) A security may be registered by qualification under this section.
(b) A registration statement under this section must contain the information or records
specified in section 5305 of this chapter, a consent to service of process complying
with section 5611 of this chapter, and, if required by rule adopted under this chapter,
the following information or records:
(1) with respect to the issuer and any significant subsidiary, its name, address, and
form of organization; the state or foreign jurisdiction and date of its organization;
the general character and location of its business; a description of its physical
properties and equipment; and a statement of the general competitive conditions in
the industry or business in which it is or will be engaged;
(2) with respect to each director and officer of the issuer, and other person having a
similar status or performing similar functions, the person’s name, address, and principal
occupation for the previous five years; the amount of securities of the issuer held
by the person as of the 30th day before the filing of the registration statement;
the amount of the securities covered by the registration statement to which the person
has indicated an intention to subscribe; and a description of any material interest
of the person in any material transaction with the issuer or a significant subsidiary
effected within the previous three years or proposed to be effected;
(3) with respect to persons covered by subdivision (2) of this subsection, the aggregate
sum of the remuneration paid to those persons during the previous 12 months and estimated
to be paid during the next 12 months, directly or indirectly, by the issuer, and all
predecessors, parents, subsidiaries, and affiliates of the issuer;
(4) with respect to a person owning of record or owning beneficially, if known, 10 percent
or more of the outstanding shares of any class of equity security of the issuer, the
information specified in subdivision (2) of this subsection other than the person’s
occupation;
(5) with respect to a promoter, if the issuer was organized within the previous three
years, the information or records specified in subdivision (2) of this subsection,
any amount paid to the promoter within that period or intended to be paid to the promoter,
and the consideration for the payment;
(6) with respect to a person on whose behalf any part of the offering is to be made in
a nonissuer distribution, the person’s name and address; the amount of securities
of the issuer held by the person as of the date of the filing of the registration
statement; a description of any material interest of the person in any material transaction
with the issuer or any significant subsidiary effected within the previous three years
or proposed to be effected; and a statement of the reasons for making the offering;
(7) the capitalization and long-term debt, on both a current and pro forma basis, of the
issuer and any significant subsidiary, including a description of each security outstanding
or being 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 of value, for which the issuer or any subsidiary has issued its securities
within the previous two years or is obligated to issue its securities;
(8) the kind and amount of securities to be offered; the proposed offering price or the
method by which it is to be computed; any variation at which a proportion of the offering
is to be made to a person or class of persons other than the underwriters, with a
specification of the person or class; the basis on which the offering is to be made
if otherwise than for cash; the estimated aggregate underwriting and selling discounts
or commissions and finders’ fees, including separately cash, securities, contracts,
or anything else of value to accrue to the underwriters or finders in connection with
the offering or, if the selling discounts or commissions are variable, the basis of
determining them and their maximum and minimum amounts; the estimated amounts of other
selling expenses, including legal, engineering, and accounting charges; the name and
address of each underwriter and each recipient of a finder’s fee; a copy of any underwriting
or selling group agreement under which the distribution is to be made or the proposed
form of any such agreement whose terms have not yet been determined; and a description
of the plan of distribution of any securities that are to be offered otherwise than
through an underwriter;
(9) the estimated monetary proceeds to be received by the issuer from the offering; the
purposes for which the proceeds are to be used by the issuer; the estimated amount
to be used for each purpose; the order or priority in which the proceeds will be used
for the purposes stated; the amounts of any funds to be raised from other sources
to achieve the purposes stated; the sources of the funds; and, if a part of the proceeds
is to be used to acquire property, including goodwill, otherwise than in the ordinary
course of business, the names and addresses of the vendors, the purchase price, the
names of any persons that have received commissions in connection with the acquisition,
and the amounts of the commissions and other expenses in connection with the acquisition,
including the cost of borrowing money to finance the acquisition;
(10) a description of any stock options or other security options outstanding, or to be
created in connection with the offering, and the amount of those options held or to
be held by each person required to be named in subdivisions (2), (4), (5), (6), or
(8) of this subsection and by any person that holds or will hold 10 percent or more
in the aggregate of those options;
(11) the dates of, parties to, and general effect concisely stated of each managerial or
other material contract made or to be made otherwise than in the ordinary course of
business to be performed in whole or in part at or after the filing of the registration
statement or that was made within the previous two years, and a copy of the contract;
(12) a description of any pending litigation, action, or proceeding to which the issuer
is a party and that materially affects its business or assets, and any litigation,
action, or proceeding known to be contemplated by governmental authorities;
(13) a copy of any prospectus, pamphlet, circular, form letter, advertisement, or other
sales literature intended as of the effective date to be used in connection with the
offering and any solicitation of interest used in compliance with subdivision 5202(17)(B)
of this chapter;
(14) a specimen or copy of the security being registered, unless the security is uncertificated;
a copy of the issuer’s articles of incorporation and bylaws or their substantial equivalents,
in effect; and a copy of any indenture or other instrument covering the security to
be registered;
(15) a signed or conformed copy of an opinion of counsel concerning the legality of the
security being registered, with an English translation if it is in a language other
than English, that states whether the security when sold will be validly issued, fully
paid, and nonassessable and, if a debt security, a binding obligation of the issuer;
(16) a signed or conformed copy of a consent of any accountant, engineer, appraiser, or
other person whose profession gives authority for a statement made by the person,
if the person is named as having prepared or certified a report or valuation, other
than an official record, that is public, which is used in connection with the registration
statement;
(17) a balance sheet of the issuer as of a date within four months before the filing of
the registration statement; a statement of income and a statement of cash flows for
each of the three fiscal years preceding the date of the balance sheet and for any
period between the close of the immediately previous fiscal year and the date of the
balance sheet, or for the period of the issuer’s and any predecessor’s existence if
less than three years; and, if any part of the proceeds of the offering is to be applied
to the purchase of a business, the financial statements that would be required if
that business were the registrant; and
(18) any additional information or records required by rule adopted or order issued under
this chapter.
(c) A registration statement under this section becomes effective 30 days, or any shorter
period provided by rule adopted or order issued under this chapter, after the date
the registration statement or the last amendment other than a price amendment is filed,
if:
(1) a stop order is not in effect, and a proceeding is not pending under section 5306
of this chapter;
(2) the Commissioner has not issued an order under section 5306 of this chapter delaying
effectiveness;
(3) the applicant or registrant and the Commissioner or the Commissioner’s designee have
not mutually agreed to delay effectiveness for a specified period of time; or
(4) the applicant or registrant has not requested that effectiveness be delayed.
(d) The Commissioner may delay effectiveness once for not more than 90 days if the Commissioner
determines the registration statement is not complete in all material respects and
promptly notifies the applicant or registrant of that determination. The Commissioner
may also delay effectiveness for a further period of not more than 30 days if the
Commissioner determines that the delay is necessary or appropriate.
(e) A rule adopted or order issued under this chapter may require as a condition of registration
under this section that a prospectus containing a specified part of the information
or record specified in subsection (b) of this section be sent or given to each person
to which an offer is made, before or concurrently, with the earliest of:
(1) the first offer made in a record to the person otherwise than by means of a public
advertisement, by or for the account of the issuer or another person on whose behalf
the offering is being made or by an underwriter or broker-dealer that is offering
part of an unsold allotment or subscription taken by the person as a participant in
the distribution;
(2) the confirmation of a sale made by or for the account of the person;
(3) payment pursuant to such a sale; or
(4) delivery of the security pursuant to such a sale. (Added 2005, No. 11, § 1, eff. July 1, 2006.)