The Division finds that registration is not necessary or appropriate for the protection of investors pursuant to Section 61-1-14(2)(v) in connection with any offer or sale of a security by an issuer in a transaction that meets the requirements of this rule.
Purchaser qualifications - Sales of securities shall be made only to persons who are or the issuer reasonably believes are accredited investors.
Issuer Limitations - The exemption is not available to an issuer that is in the development stage that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person.
Investment Intent - The issuer reasonably believes that all purchasers are purchasing for investment and not with the view to or for sale in connection with a distribution of the security. Any resale of a security sold in reliance on this exemption within 12 months of sale shall be presumed to be with a view to distribution and not for investment, except a resale pursuant to a registration statement effective under Section 61-1-8, 61-1-9, or 6-1-10 or to an accredited investor pursuant to an exemption under Section 61-1-14.
Disqualifications - The exemption is not available to an issuer if the issuer, any of the issuer's predecessors, any affiliated issuer, any of the issuer's directors, officers, general partners, beneficial owners of 10% or more of any class of its equity securities, any of the issuer's promoters presently connected with the issuer in any capacity, any underwriter of the securities to be offered, or any partner, director or officer of such underwriter:
General Announcement - A general announcement of the proposed offering may be made by any means. The general announcement shall include only the following information, unless additional information is specifically permitted by the Division:
Additional Information - The issuer, in connection with an offer, may provide information in addition to the general announcement, if such information:
Telephone Solicitations - No telephone solicitation shall be permitted unless prior to placing the call, the issuer reasonably believes that the prospective purchaser to be solicited is an accredited investor.
Filing Requirements - The issuer shall file with the Division, within 15 days after the first sale in Utah: (1) one manually signed Form 14-25s, Accredited Investor Exemption Uniform Notice of Transaction Form; (2) NASAA Form U-2, Uniform Consent to Service of Process; (3) a copy of the general announcement; and (4) a fee as specified in the Division's fee schedule.
Division Interpretive Commentary:
This exemption was created by rule under the discretionary authority of section 61-1-14(2)(v). The text of the rule may be found at R164-14-25v.
This rule provides an exemption for offers and sales to accredited investors. The rule also permits a limited use advertisement. This exemption requires a filing with the Division prior to relying on the exemption. The issuer shall file with the Division, within 15 days after the first sale in Utah, all of the following: