(1) Except
as allowed under OAR
441-035-0130, prior to any offer
or sale of an OIO security, each prospective investor must be given, in a
single written document, the disclosures identified in subsection (2). For the
purposes of this exemption, "in writing" includes printed, electronic, and
internet media. An interested party must be given the option to receive the
disclosures and subsequent reports in one or more formats, including printed
copies at no charge.
(2) The
disclosures required by these rules must include:
(a) The name(s) and physical address(es) of
the issuer and of all officers, principals, managing partners and shareholders
of the issuer holding a 20% interest or more, or persons holding a
substantially similar position;
(b) A description of the experience and
qualifications of the issuer officers, principals, managing partners and
persons holding substantially similar positions;
(c) A description of the business, including
how long it has been in operation and the specific reason for the offering;
(d) A discussion in plain language
of the significant factors material to the offering, including those that make
the offering speculative or risky;
(e) The total offering amount and how the
issuer expects to use the proceeds of the offering, including compensation and
expenses related to the offering.
(f) If an issuer needs to raise a minimum
amount to achieve the stated funding goal, they must disclose that minimum
offering amount and how the issuer intends to use funds raised through the
offering if the minimum goal is not met, or if they intend to return the funds
if the goal is not met;
(g) The
terms and conditions of the securities being offered, the total amount of
securities that are outstanding prior to the OIO, and the total amount of
securities being offered or sold in reliance on the OIO exemption:
(A) If the issuer is offering stock, the
terms and conditions must include either the percentage of ownership
represented by a single share, or the total value of the Oregon business
implied by the offering price.
(B)
If the issuer is offering notes or debentures, the terms and conditions must
include the interest rate and specific terms of repayment.
(h) A description of any
litigation or legal proceedings within the past five (5) years, if any,
involving the issuer or any persons associated with the issuer.
(3) The issuer must inform all
investors that the securities exempted by these rules are not registered with
the state, that they are subject to a limitation on re-sale and investors may
not be able to sell their securities promptly or may only be able to sell them
at a substantial discount from the offering price. Disclosures must also
contain the following language on the cover page of the offering document:
"THESE SECURITIES ARE BEING SOLD IN RELIANCE ON AN EXEMPTION TO
THE FEDERAL SECURITIES REGISTRATION REQUIREMENTS UNDER SECTION 3(a)(11) OF THE
SECURITIES ACT OF 1933 AND UNDER ORS
59.035 OF THE OREGON SECURITIES
LAW. THESE SECURITIES CAN ONLY BE SOLD TO RESIDENTS OF OREGON AND ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE. INVESTORS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION, INVESTORS SHOULD RELY ON
THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS REVEALED IN THESE OFFERING
DOCUMENTS, INCLUDING THE MERITS AND RISKS INVOLVED.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE AUTHORITY OR REGULATORY COMMISSION NOR HAVE THEY CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE. BUSINESS TECHNICAL SERVICE PROVIDERS HAVE NOT REVIEWED
THE OFFERING DOCUMENTS AND CANNOT DETERMINE THE MERITS OF THIS OFFERING"
(4) At the time of sale
the issuer must require all purchasers to sign the following acknowledgement.
For the purposes of this provision, "signed" includes a scanned, faxed or
virtual signature:
"I have been provided and have reviewed the complete offering
document, including the disclosures. I acknowledge that I am investing in a
high-risk, business venture with no guarantee of success, that I may lose all
of my investment, and that I can afford the loss of my investment. I understand
this offering has not been reviewed by the State, and no authority has
expressed an opinion on the merits or accuracy of this offering. By entering
into this transaction with the issuer, I am affirmatively representing myself
as an Oregon resident."
