PURPOSE: This rule exempts from registration certain transactions in securities offered to raise money to be used in Missouri.

PUBLISHER’S NOTE: The secretary of state has determined that the publication of the entire text of the material which is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. Therefore, the material which is so incorporated is on file with the agency who filed this rule, and with the Office of the Secretary of State. Any interested person may view this material at either agency’s headquarters or the same will be made available at the Office of the Secretary of State at a cost not to exceed actual cost of copy reproduction. The entire text of the rule is printed here. This note refers only to the incorporated by reference material.

1. (1) The commissioner, pursuant to the provisions of section 409.402(c), RSMo of the Missouri Uniform Securities Act (the Act) exempts from the requirements of sections 409.301 and 409.303 of the Act any offer or sale of common stock, limited partnership interests or debt securities of an issuer incorporated or organized as a corporation limited partnership under the laws of this state having, both before and upon completion of the offering, its principal office and a majority of its 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 five hundred thousand dollars ($500,000) may be sold to persons who satisfy the conditions set forth in paragraph (1)(A)1., 2., 3., 4. or 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) of the Act 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 twenty-five per-

cent (25%) or more security holder 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 to any person in this state in reliance on this exemption except to securities, 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 Rule 502(b)(2) of Regulation D under the Securities Act of 1933 or 15 CSR 30-52.020 or the Small Corporate Offering Registration Form (Form U- 7) as adopted April 29, 1989 by the North American Securities Administrator’s Association, Inc. or such other form as the com- 15 CSR 30-54

missioner may approve and either audited or reviewed or verified financial statements of the issuer (the verification shall state the financial statements are true and accurate to the best knowledge of the preparer, the accounting basis on which they were prepared, the capacity or relationship of the preparer to the issuer and shall be signed by the preparer) for the periods specified in section 409.304(b)(16) of the Act shall be delivered to each purchaser or prospective purchaser prior to the sale of the securities. When partnership securities are offered, the balance sheet of the general partner(s) shall be delivered as well as the financial statements of the partnership.

1. (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.
2. (F) Any advertising relating to the offering may only be in the form set out at 15 CSR 30- 53.010(3).
3. (G) Except as provided, that which follows in this subsection, securities purchased pursuant to this rule must be held by the purchaser until the earlier of two (2) years from the date of the purchase from the issuer or the date the issuer becomes subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934. Notwithstanding the previous sentence of (1)(G), a purchaser at any time may transfer such security—i) To a person, trust or plan meeting the requirements of paragraph (1)(A)1., 2., 3.,

1. 4. or 5.; ii) to any relative, spouse or relative of a spouse of the purchaser who has the same principal residence as the purchaser; iii) to a corporation or other organization in which the purchaser and any of the persons specified previously in ii) own one hundred percent (100%) of the equity securities; iv) to any trust or estate in which the purchaser and any of the persons specified previously in ii) own one hundred percent (100%) of the beneficial interest; or v) to a trust in which the purchaser has a one hundred percent (100%) beneficial interest during his/her lifetime. These transferees shall be subject to the restrictions on transfer contained in this subsection (1)(G); provided, that the two (2)- year holding period shall begin on the date the securities were first purchased from the issuer. A legend shall be placed upon certificates for the security purchased pursuant to this rule referring to the restrictions on transfer contained in this subsection.

   1. (H) The issuer or applicant shall file with the commissioner—

      1. 1. The offering document to be used in

connection with the offer and sale of the securities not later than the date of the first use in this state, together with the fee prescribed by 15 CSR 30-50.030(2)(F); and

1. 2. 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.

AUTHORITY: sections 409.402(c) and 409.413(a), RSMo 1986.* Original rule filed June 2, 1986, effective Oct. 27, 1986. Amended: Filed Oct. 15, 1987, effective Jan. 29, 1988. Amended: Filed March 27, 1989, effective June 12, 1989. Amended: Filed Jan. 3, 1990, effective March 11, 1990. *Original authority: 409.402(c), RSMo 1967, amended 1977, 1978, 1986 and 409.413(a), RSMo 1967.