3 AAC 08.087 - Solicitations of interest before the filing of a registration statement

(a) An issuer or an agent of the issuer may make an offer, but not a sale, of a security for the sole purpose of soliciting an indication of interest in receiving a prospectus, if

(1) the issuer is or will be a business entity organized under the laws of one of the states or possessions of the United States or one of the provinces or territories of Canada;

(2) the issuer is engaged in or proposes to engage in a business other than petroleum exploration or production or mining or other extractive industries;

(3) the issuer is not soliciting for a blind pool offering or other offering for which the specific business in which the issuer is or proposes to be engaged or the properties to be acquired cannot be described at the time of the solicitation;

(4) the offeror intends to register the security in this state under AS 45.55 and to conduct its offering under either 17 C.F.R. 230.251 - 230.263 (Regulation A) or 17 C.F.R. 230.501 - 230.504 and 17 C.F.R. 230.507 (Rule 504 of Regulation D);

(5) only a person who is registered under AS 45.55.030(a) as a broker-dealer or an agent, or who is exempted from registration makes a sale of the security; and

(6) the offeror does not know, and in the exercise of reasonable care could not know, that the issuer or any of the issuer's agents or promoters

(A) has filed a registration statement that is the subject of a currently effective registration stop order entered under a federal or state securities law within five years before the filing of the solicitation of interest form required by (c) of this section;

(B) within five years before the filing of the solicitation of interest form required by (c) of this section, was convicted of a

(i) felony or misdemeanor in connection with the offer, purchase, or sale of a security; or

(ii) felony involving fraud or deceit, including forgery, embezzlement, obtaining money under false pretense, larceny, or conspiracy to defraud;

(C) is currently subject to a federal or state administrative enforcement order or judgment entered within five years before the filing of the solicitation of interest form required by (c) of this section, and

(i) entered by a state securities administrator or the SEC; or

(ii) in which fraud or deceit was found in connection with the purchase or sale of a security; for purposes of this subparagraph, fraud and deceit include making untrue statements of material facts and omitting material facts;

(D) is subject to a federal or state administrative enforcement order or judgment that prohibits, denies, or revokes the use of an exemption from registration in connection with the offer, purchase, or sale of securities;

(E) is currently subject to an order, judgment, or decree entered by a court of competent jurisdiction within five years before the filing of the solicitation of interest form required by (c) of this section, and

(i) temporarily, preliminarily, or permanently restraining or enjoining the agent or promoter from engaging in or continuing a conduct or practice involving fraud or deceit in connection with the purchase or sale of a security; or

(ii) involving the making of a false filing under applicable securities laws and regulations with this state, another state, or the SEC; or

(F) is currently subject to an administrative enforcement order or judgment entered by a self-regulatory organization within five years before the filing of the solicitation of interest form required by (c) of this section, and finding fraud or deceit; for purposes of this subparagraph, fraud and deceit include making untrue statements of material facts and omitting to state material facts.

(b) The requirement in (a)(6) of this section does not apply if

(1) a person subject to a disqualification in (a)(6)(A) - (F) of this section is

(A) licensed or registered to conduct securities-related business in the state in which the administrative order or judgment was entered against the person, and if that person acts only in a capacity for which the person is licensed or registered; or

(B) the employee of a broker-dealer, the broker-dealer is registered in this state, and the SEC Form BD filed with this state as required by 3 AAC 08.011 or 3 AAC 08.014 discloses the order, conviction, judgment, or decree relating to that employee; or

(2) notwithstanding the existence of a disqualification listed in (a)(6)(A) - (F) of this section, the agency that created the basis for disqualification determines upon a showing of good cause that, within the agency's jurisdiction, denial of the solicitation of interest registration is not necessary.

(c) At least 10 business days before an initial solicitation of interest under this section, the offeror must submit to the administrator

(1) a solicitation of interest form (State of Alaska Form 08-113);

(2) any materials to be used to conduct solicitations of interest, including the script of any broadcast to be made and a copy of any notice to be published; and

(3) the fee required by 3 AAC 08.920(a) (9).

(d) At least five business days before using materials submitted under (c) of this section, an offeror must submit to the administrator any amendments to those materials or any additional materials to be used to conduct solicitations of interest. However, materials provided to a particular offeree upon a request by that offeree need not be submitted to the administrator until five business days after usage.

(e) Except for scripted broadcasts and published notices, and except to the extent necessary to obtain information needed to submit a solicitation of interest form required under (c) of this section, an offeror may not communicate with an offeree about the contemplated offering unless the offeree is provided with a copy of the most current solicitation of interest form at or before the time of the communication or within five calendar days after the communication.

(f) During the solicitation of interest period, an offeror may not solicit or accept money or a commitment to purchase securities.

(g) An offeror may not make a sale of the security until seven calendar days after delivery to the purchaser of a final prospectus that is part of a registration statement that is effective under AS 45.55.090 or 45.55.100.

(h) Failure of an offeror to comply with the requirements of this section is a violation of AS 45.55, and the administrator will, in the administrator's discretion, take action under AS 45.55.920 or deny registration under AS 45.55.

(i) Except as provided in (j) of this section, any published notice, script for broadcast, or printed material delivered apart from a copy of the most current solicitation of interest form submitted under (c) of this section must contain the identity of the chief executive officer of the issuer, a brief and general description of the issuer's business and products, and the following legends:

"THIS IS A SOLICITATION OF INTEREST ONLY. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED AND NONE WILL BE ACCEPTED. NO SALES OF THE SECURITIES WILL BE MADE OR COMMITMENT TO PURCHASE ACCEPTED UNTIL THE DELIVERY OF AN OFFERING CIRCULAR THAT INCLUDES COMPLETE INFORMATION ABOUT THE COMPANY AND THE OFFERING.

AN INDICATION OF INTEREST MADE BY A PROSPECTIVE INVESTOR INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND. THIS OFFER IS BEING MADE UNDER THE REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS. NEITHER THE FEDERAL NOR THE STATE AUTHORITIES HAVE CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT OR ANY OTHER DOCUMENT PRESENTED TO YOU IN CONNECTION WITH THIS OFFER. NO SALE MAY BE MADE UNTIL THE OFFERING STATEMENT IS QUALIFIED BY THE US SECURITIES AND EXCHANGE COMMISSION AND THE SECURITIES ARE REGISTERED IN ALASKA.

REGISTRATION OF THE SECURITIES FOR SALE IN ALASKA IS DEPENDENT ON COMPLIANCE WITH THE ALASKA SECURITIES ACT (AS 45.55). THEREFORE, THERE CAN BE NO ASSURANCE THAT THE SECURITIES WILL BE REGISTERED FOR SALE IN ALASKA."

(j) The requirements of (i) of this section do not apply to the delivery of printed material to a person who has already received a copy of the most current solicitation of interest form as required by (e) of this section, with the legends required by (i) of this section included on the form.

(k) All communications with an offeree made in reliance on this section must cease after a registration statement is filed in this state. A sale may not be made until at least 20 calendar days after the last communication made in reliance on this section.

(l) Except for the requirements at (a)(5) of this section, the administrator will, in the administrator's discretion, waive any requirement of this section in writing, upon application by the offeror for cause shown. Neither compliance nor attempted compliance with this section, nor the absence of an objection or order by the administrator with respect to an offer of securities undertaken under this section, is a waiver of any condition of this section or a confirmation by the administrator of the availability of this section.

(m) An offer made in reliance on this section is not a violation of AS 45.55.070 by virtue of being integrated with a subsequent offer or sale of securities unless that subsequent offer or sale would be integrated under federal securities laws.

(n) An issuer on whose behalf an indication of interest is solicited under this section may not make an offer or sale in reliance on AS 45.55.900(b)(5)(A) - (C) until six months after the last communication with a prospective investor is made under this section.

(o) The administrator will, in the administrator's discretion, review the materials filed under this section to determine whether those materials are fraudulent or misleading. Any discussion in the offering documents of the potential rewards of the investment must be balanced by a discussion of possible risks.

(p) An offeror may begin to conduct solicitations of interest under this section if the requirements of this section have been satisfied, unless notified otherwise by the administrator. The administrator will, in the administrator's discretion, at any time notify the offeror not to distribute a solicitation of interest form submitted under (c) of this section, script, advertisement or other material that the administrator considers to be in violation of AS 45.55.010.

Notes

3 AAC 08.087

Eff. 4/19/2000, Register 154

Authority:AS 45.55.070

AS 45.55.100

AS 45.55.110

AS 45.55.950