61-1-14(2)(j) – Existing Securities Holders Transactional Exemption


(2) The following transactions are exempted from Sections 61-1-7 and 61-1-15:

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(j) subject to Subsection (6), a transaction pursuant to an offer by an issuer of its securities to its existing securities holders, if:

(i) no commission or other remuneration, other than a standby commission is paid or given directly or indirectly for soliciting a security holder in this state; and

(ii) the transaction constitutes:
(A) the conversion of convertible securities;
(B) the exercise of nontransferable rights or warrants;
(C) the exercise of transferable rights or warrants if the rights or warrants are exercisable not more than 90 days after their issuance;
(D) the purchase of securities under a preemptive right; or
(E) a transaction other than one specified in Subsections (2)(j)(ii)(A) through (D) if:
(I) the division is furnished with the following:

1. Email to nnadams@utah.gov PDF attachments:
(Aa) a general description of the transaction;
(Bb) the disclosure materials to be furnished to the issuer's securities holders in the transaction; and
(Cc) a non-refundable fee; and
(II) the division does not, by order, deny or revoke the exemption within 20 working days after the day on which the filing required by Subsection (2)(j)(ii)(E)(I) is complete;

Also required, a fully executed U2 Consent to Process Form.

2. ACH/Wire payment directly to the Division
a. email nnadams@utah.gov for information
b. $60 filing fee

Division Interpretive Commentary

The Issuer's current Registration by Coordination will be terminated as of the date this exemption is confirmed by the Division.

Issuers should note that, pursuant to section 61-1-14(6), the exemption created by Subsection (2)(j) is not available for an offer or sale of a security to an existing securities holder who has acquired the holder's security from the issuer in a transaction in violation of Section 61-1-7.