Limited Offerings Sales by a company to no more than 35 persons in Minnesota during any consecutive twelve month period are exempt from registration if the following conditions are met: • the company reasonably believes that all the buyers in Minnesota (other than institutional investors) are purchasing for investment; • no commission or remuneration is paid or given directly or indirectly to a person other than a broker-dealer or a registered agent for soliciting a prospective purchaser in Minnesota; • no general solicitation or general advertising is made in connection with the sale or offer to sell the security; and • notice has been filed with the Minnesota Department of Commerce at least ten days in advance of any sale or such a shorter period as permitted by the Department. However, an issuer who makes sales to ten or fewer purchasers in Minnesota during any twelve consecutive months is not required to provide this. 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 U7 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.
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