PURPOSE: This rule provides a simplified registration process for small offerings of securities.

1. (1) The commissioner, pursuant to the provisions of section 409.305(e), (f) and (g), RSMo of the Missouri Uniform Securities Act (the Act) provides for registration by qualification of the offer and sale of common stock, limited partnership interests and debt securities of issuers having, upon completion of the offering, their principal place of business and a majority of full-time employees located in this state; provided, all the conditions set forth in this rule are met.

   1. (A) Common stock, limited partnership interests or debt securities, including small business participating debentures, with an aggregate offering price not in excess of one

2. (1) million dollars in any twelve (12)-month period may be sold to persons who satisfy the conditions set forth in subparagraphs (1)(A)1.—5. The aggregate offering price limitation includes all securities sold by the issuer within the twelve (12) months before the offering and all securities sold during the offering, provided that securities sold pursuant to an exemption contained in section 409.402(b), RSMo are not included in the limitation:

   1. 1. A person with an annual gross

income of at least thirty thousand dollars ($30,000) and a net worth of at least thirty thousand dollars ($30,000) exclusive of the person’s home, home furnishings and automobiles;

1. 2. A person with a net worth of at least

seventy-five thousand dollars ($75,000) exclusive of the person’s home, home furnishings and automobiles;

1. 3. A director, officer or holder of twen-

ty-five percent (25%) or more of the securities of the issuer;

1. 4. A person whose beneficial interest in

the offering does not and will not exceed five hundred dollars ($500); or

1. 5. A retirement trust or plan of a person

under section (1), (2) or (3).

1. (B) No commission or other remuneration may be paid or given, directly or indirectly, for soliciting or selling securities in this state in reliance on this exemption except to broker-dealers and agents licensed in this state.
2. (C) Neither the issuer nor any broker-dealer offering or selling the securities is or would be disqualified under 15 CSR 30- 54.210(1)(A)1.
3. (D) An offering document meeting the disclosure requirements of 15 CSR 30-52.020, including a Form U-7, or other forms as the commissioner may approve (provided, that verified financial statements of the issuer may be substituted for audited financial statements for offerings of under five hundred thousand dollars ($500,000)) shall be delivered to each purchaser and prospective purchaser prior to the sale of the securities or breaking of escrow as set forth in subsection (1)(G).
4. (E) The offering document shall provide that at least eighty percent (80%) of the net proceeds from the offering shall be used in connection with the operations of the issuer in this state.
5. (F) All advertising related to the offering shall be in the form set forth in 15 CSR 30- 53.010(3).

6. (G) The issuer may solicit up to one hundred thousand dollars ($100,000) without an offering document on the basis of a business plan disclosing the type of business, use of proceeds and risks associated with the offering. The money raised in this manner shall be placed in an escrow account at a financial institution located in this state and shall not be released from escrow until the financial institution has received written notification from the commissioner that a copy of an offering document meeting the requirements of subsection (1)(D) has been ordered effective by the commissioner.

   1. 1. All investors whose funds are held in

escrow will be mailed copies of the offering document and must elect to maintain their investments or their investments will be refunded prior to the release of funds from escrow. The solicitation provided for by this subsection (1)(G) shall occur only after the filing of the business plan and escrow agreement (in compliance with 15 CSR 30-52.272; provided, that indemnification, liability and similar provisions may be as negotiated between the issuer and the escrow agent) with the commissioner.

1. 2. Offers made under this subsection

(1)(G) are exempt from the requirements of sections 409.301 and 409.403 of the Act by the authority of the commissioner under section 409.402(c) of the Act.

1. 3. The cover of the business plan shall

contain the following legend: This offer is made pursuant to the Missouri Issuer Registration Rule (15 CSR 30-52.271 of the Missouri Code of State Regulations) which permits issuers to raise funds prior to the completion of an offering document by using a business plan as the means of disclosure. The rule provides that subscribers have a right to a refund of their investments plus a pro rata share of interest earned on the account, less escrow fees, upon receipt of the completed offering document, and at any time before the offering document is declared effective by the commissioner of securities. If subscribers do not indicate within thirty (30) days after the completed offering document is mailed to them that they elect to maintain their investments, they will be deemed to have requested refunds, and the amounts of their investments, plus a pro rata share of any interest earned on the account, minus a pro rata share of escrow fees and expenses, will be refunded to them.

1. (H) Any party may request a prefiling conference or the commissioner may require one following the filing of the business plan.

2. (I) The issuer or applicant shall file with the commissioner—

   1. 1. A copy of the business plan and the

escrow agreement ten (10) days prior to any solicitation of the sale of securities under subsection (1)(G);

1. 2. The offering document to be used in

connection with the offer and sale of the securities prior to any solicitation or prior to release of money from the escrow provided for in subsection (1)(G);

1. 3. A filing fee of one hundred dollars

($100) and a registration fee of one-twentieth (1/20) of one percent (1%) of the amount by which the minimum aggregate offering price of the securities to be offered in this state exceeds one hundred thousand dollars ($100,000); and

1. 4. A copy of any advertising, other than

the offering document, to be used in connection with the offer and sale of securities not later than the date of its first use in this state and a copy of any material amendment to the offering document, not later than the date of its first use in this state.

1. (J) No offering made under this section may involve—

   1. 1. A certificate of interest or participa-

tion, including limited partnerships in an oil or gas, or mining title or lease; or

1. 2. A blank check or blind pool offering.

2. (K) Other Requirements. 15 CSR 30-52

   1. 1. Selling expenses shall not exceed

twenty percent (20%) of total offering proceeds; provided, that the total compensation paid to any underwriter shall not exceed fifteen percent (15%).

1. 2. The issuer of debt offerings must

demonstrate the ability to service its debt.

1. 3. The offering shall meet the require-

ments of 15 CSR 30-52.110 Voting Rights.

1. 4. The commissioner reserves the right

to apply any provision of this chapter concerning registration of securities to offerings under this rule if the commissioner determines that this application is necessary for the protection of investors.

1. 5. In addition to the offering document,

the following documents may be required to be filed with the commissioner:

1. A. Form of selling agency agreement;
2. B. The issuer’s articles of incorpora-

tion or limited partnership agreement or other charter documents and all amendments;

1. C. The issuer’s bylaws, as amended to

date;

1. D. Copy of any resolutions by direc-

tors setting forth terms and provisions of capital stock to be issued;

1. E. Any indenture, form of note or

other contractual provision containing terms of notes or other debt, or of options, warrants or rights to be offered;

1. F. Specimen of security to be offered;
2. G. Consent to service of process

accompanied by appropriate resolution;

1. H. Form of subscription agreement

for the purchase of securities in this offering;

1. I. A signed or conformed copy of an

opinion of counsel as to the legality of the security being registered, which shall state whether the security when sold will be legally issued, fully paid and nonassessable, and, if a debt security, a binding obligation of the issuer;

1. J. Schedule of residence street

addresses of officers, directors and principal stockholders; and

1. K. Upon the earlier of the completion

of the offering or one (1) year from the date the offering document is ordered effective by the commissioner, a list of the names and addresses of all Missouri investors in the offering.

1. (2) An offering document becomes effective under this rule when the commissioner so orders.

AUTHORITY: section 409.413(a), RSMo (1986).* Original rule filed April 14, 1992, effective Jan. 15, 1993.

*Original authority 1967.