S.D. Admin. R. 20:08:07:25 - Intrastate limited offering transactional exemption
Any sale by an issuer having its principal office in this state is eligible for the intrastate limited offering transactional exemption according to the following conditions:
A.
(1) The
total number of sales is not made to more than thirty-five non-accredited
persons in this state;
(a) "Persons in this
state" include any sale that physically takes place within this state, whether
to residents or nonresidents;
(b)
Integration: Offers and sales that are made more than six months before the
start of an intrastate limited offering or are made more than six months after
completion of an intrastate limited offering will not be considered part of
that offering, so long as during those six month periods there are no offers or
sales of securities by or for the issuer that are of the same or a similar
class as those offered or sold under the intrastate limited offering, other
than those offers or sales of securities under an employee benefit plan
pursuant to SDCL 47-31B-202(21);
(2). An intrastate limited offering may be
offered and sold no more than twelve consecutive months from the approval date
of the filing;
(3). The issuer
believes that all of the buyers in this state, other than those designated in
SDCL 47-31B-202(13), are purchasing for investment;
(4). No commission or other remuneration is
paid or given directly or indirectly for soliciting any prospective buyer in
this state other than a finder as defined in §
20:08:03:17, except reasonable and
customary commissions paid by the issuer to a broker or agent registered with
the division;
(5). Ten days prior
to any sale, the issuer must submit to the director, a completed "Statement of
the Issuer Form", and pay a filing fee pursuant to SDCL 47-31B-203. The
offering may not be sold prior to approval by the director; and
(6). The issuer must file the report of sales
form within 30 days of the end of the grant of the exemption or after the
offering is closed, whichever occurs first.
B.
(1)
Unless the issuer complies with §
20:08:07:27 with respect to the
testing-the-waters exemption, there can be no public advertising of an offer to
sell securities; and any offers made under this section may only be directed to
persons with whom the issuer has a pre-existing relationship or persons acting
on the issuer's behalf who have a pre-existing business relationship. The term,
no public advertising, means that neither the issuer nor any person acting on
behalf of the issuer may offer or sell the securities by any form of general
solicitation or general advertising, including an advertisement, article,
notice, or other communication published in a newspaper, magazine, or similar
media or broadcast over television or radio and a seminar or meeting whose
attendees have been invited by general solicitation or general
advertising.
(2). The director may
increase the number of purchasers for purposes of this rule if the issuer shows
the director that:
(a) The number limitation
is unwarranted for this offering;
(b) The increased number is necessary to
complete a particular community or economic development project; or
(c) The purchasers are limited to a
particular identified group; and the issuer discloses the number of intended
purchasers to the director.
(3). For the purpose of computing the number
of sales which have been made or will have been made upon completion of a
proposed offering pursuant to this rule, the following sales shall be excluded:
(a) The sale to a relative or spouse of a
purchaser and a relative of the spouse who has the same home as the
purchaser;
(b) The sale to a trust
or estate in which a purchaser or any of the persons related to the purchaser
as specified in subdivision (a) of this section collectively have 100 percent
of the beneficial interest, excluding contingent interest;
(c) The sale to a corporation or other
organization of which a purchaser or any of the persons related to him as
specified in subdivision (a) of this section collectively are the beneficial
owners of all the equity securities, excluding directors' qualifying shares, or
equity interests.
(4). A
sale to a corporation, partnership, limited liability company, association,
joint stock company, trust, or unincorporated organization shall be counted as
one sale; however, if the entity was organized for the specific purpose of
acquiring the securities offered, each beneficial owner of equity interest or
equity securities in the entity shall count as a separate sale. A tenancy by
the entirety is one person.
(5). A
sale made to an accredited investor as defined in
17 C.F.R. §
230.501, or a sale pursuant to SDCL
47-31B-202(13)
may not be construed as a sale for the purpose of computing the maximum number
of sales allowed under this rule.
(6). Intrastate limited offerings are
presumed confidential and shall receive confidential treatment.
Notes
General Authority: SDCL 47-31B-605(a)(1) to (3), inclusive.
Law Implemented: SDCL 47-31B-103, 47-31B-203.
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