SCOR (SMALL CORPORATE OFFERING REGISTRATION) The Small Corporate Offering Registration (SCOR) is a simplified procedure for registering stock offerings which enables small, start-up companies to raise up to $5 million in a 12-month period.
SCOR: Access to Capital for Small Businesses
Increased Access to Capital A SCOR offering is a tool for small businesses to raise capital without the prohibitive costs involved in traditional stock offerings. Regulatory Relief and Streamlining Because the offering is registered solely with the state, multiple reporting requirements are eliminated. In addition, the enhanced form U7 disclosure document is simply formatted into 50 detailed questions designed to satisfy the necessary disclosures without burdensome requirements. Completing the Form U 7 The process of completing a SCOR offering is centered around the form U7. The Form U7 is less complex than traditional stock prospectuses. The Form U7 consists of 50 detailed questions designed to provide the state and the investor with important information regarding the company’s operations. The questions in the U7 form consist of items such as the company’s history; its business and properties; risk factors facing the company; use of the offering proceeds; description of the securities being offered; dividend history; key personnel; principal stockholders; and pending or threatened litigation. Answering the Form U7 questions adequately and completely will satisfy the required disclosures in law. Once the Form U7 is completed, it is submitted, along with reviewed or audited financial reports, and the required fee to the Minnesota Department of Commerce Registration Division. The Department reviews and provides comments on the documents. So long as no stop order is in effect and no proceeding is pending under Minn. Stat. § 80A.13 a SCOR registration statement becomes effective automatically at 5:00 p.m. on the twentieth full business day after the filing of the registration statement, or the last amendment of it, or at some earlier time determined (by order) by the Commissioner of the Minnesota Department of Commerce. For purposes of a nonissuer transaction, other than a transaction by an affiliate of the issuer, all outstanding securities of the same class identified in the small corporate offering registration statement as a security registered under Minn. Stat. Chapter 80A are considered to be registered while the small corporate offering registration statement is effective. The registration statement is effective for one year after its effective date or for a longer period designated by an order of the Commissioner of Commerce. The registration statement may be withdrawn only with the approval of the Commissioner of Commerce. An issuer can raise up to $5 million in a 12 month period, and offerings must sell for at least $1 per share.
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