Regulation
SCOR
We will use the State of Ohio Form SCOR has been developed pursuant to the Small Business Investment Incentive Act of 1980 (now contained in Section 19 of the Securities Act of 1933) which prescribes State and Federal cooperation in furtherance of the policies expressed in that Act of a substantial reduction in costs and paperwork to diminish the burden of raising investment capital, particularly by small business, and a minimum interference with the business of capital formation.
Form SCOR is the general registration form for corporations registering under state securities laws securities that are exempt from registration with the Securities and Exchange Commission (the "SEC") under Rule 504 of Regulation D. It is designed to be used by companies, the attorneys and accountants for which are not necessarily specialists in securities regulation.
Certain states in the registration of securities apply substantive fairness standards through various policies, rules and statutes. These standards, which vary from state to state, must be complied with by a Company in order to register its securities in those states. Before using Form SCOR, a Company should discuss with the Securities Administrator of each state in which the offering is to be filed the application of substantive fairness standards to the offering.
Rule 1301:6-3-09(I)of the Ohio Administrative Code provides that the Division of Securities may accept the SCOR offering document for a registration by qualification. The SCOR or Form U-7 is a question and answer format prospectus. The sample form is available from the CCH (Commerce Clearing House)NASAA Reports at paragraph 5,057.
It is advisable that small corporate issuers review the relevant provisions of the Ohio Securities Act, Ohio Administrative Code and published merit standards prior to filing the application for registration by qualification with the Division. Issuers must comply with section 1707.09 of the Revised Code, rule 1301:6-3-09 of the Ohio Administrative Code and merit standards applied to public offerings which are published in early issues of the Ohio Securities Bulletin and the CCH Blue Sky Reporter at paragraphs 45,705 - 45,719.
OAC 1301:6-3-09(A)(1) requires that issuers submit a form U-1 or form 9.
A consent to service of process on form U-2/U-2A or the Divisions form 11 is required for issuers located outside of Ohio (see section 1707.11 of the Revised Code). The Division will require an accountant’s consent to the use of any report contained in the offering circular or advertisement pursuant to OAC 1301:6-3-09(A)(2). The merit standards most applicable to SCOR and rule 504 offerings published in the Ohio Securities Bulletins and CCH Blue Sky Reporter concern the following topics: cheap stock or promotional shares, underwriting compensation, use of proceeds, insider loans, insolvent issuers, options and warrants, blank check preferred disclosure, subordinate voting rights disclosure and future transactions with affiliates disclosure.
An issuer may sell it's own securities without dealer licensing provided the issuer does not receive commissions or other remuneration for the selling efforts [see section 1707.01(E)(1)(a) of the Revised Code.] An escrow of securities or proceeds may be required pursuant to OAC 1301:6-3-09(C).
Assuming compliance with section 1707.09 of the Revised Code, OAC 1301:6-3-09, published merit standards and the securities are not to be sold on grossly unfair terms or in a manner tended to deceive or defraud (see section 1707.13 of the Revised Code), SCOR offerings will receive a 13 month period of effectiveness (see OAC 1301:6-3-09(B)(1).) However,issuers are obligated to notify the Division of any material change in the issuer or offering pursuant to OAC 1301:6-3-09(B)(2) and section 1707.44(B)(2) of the Revised Code.
We will use the State of Ohio Form SCOR has been developed pursuant to the Small Business Investment Incentive Act of 1980 (now contained in Section 19 of the Securities Act of 1933) which prescribes State and Federal cooperation in furtherance of the policies expressed in that Act of a substantial reduction in costs and paperwork to diminish the burden of raising investment capital, particularly by small business, and a minimum interference with the business of capital formation.
Form SCOR is the general registration form for corporations registering under state securities laws securities that are exempt from registration with the Securities and Exchange Commission (the "SEC") under Rule 504 of Regulation D. It is designed to be used by companies, the attorneys and accountants for which are not necessarily specialists in securities regulation.
Certain states in the registration of securities apply substantive fairness standards through various policies, rules and statutes. These standards, which vary from state to state, must be complied with by a Company in order to register its securities in those states. Before using Form SCOR, a Company should discuss with the Securities Administrator of each state in which the offering is to be filed the application of substantive fairness standards to the offering.
Rule 1301:6-3-09(I)of the Ohio Administrative Code provides that the Division of Securities may accept the SCOR offering document for a registration by qualification. The SCOR or Form U-7 is a question and answer format prospectus. The sample form is available from the CCH (Commerce Clearing House)NASAA Reports at paragraph 5,057.
It is advisable that small corporate issuers review the relevant provisions of the Ohio Securities Act, Ohio Administrative Code and published merit standards prior to filing the application for registration by qualification with the Division. Issuers must comply with section 1707.09 of the Revised Code, rule 1301:6-3-09 of the Ohio Administrative Code and merit standards applied to public offerings which are published in early issues of the Ohio Securities Bulletin and the CCH Blue Sky Reporter at paragraphs 45,705 - 45,719.
OAC 1301:6-3-09(A)(1) requires that issuers submit a form U-1 or form 9.
A consent to service of process on form U-2/U-2A or the Divisions form 11 is required for issuers located outside of Ohio (see section 1707.11 of the Revised Code). The Division will require an accountant’s consent to the use of any report contained in the offering circular or advertisement pursuant to OAC 1301:6-3-09(A)(2). The merit standards most applicable to SCOR and rule 504 offerings published in the Ohio Securities Bulletins and CCH Blue Sky Reporter concern the following topics: cheap stock or promotional shares, underwriting compensation, use of proceeds, insider loans, insolvent issuers, options and warrants, blank check preferred disclosure, subordinate voting rights disclosure and future transactions with affiliates disclosure.
An issuer may sell it's own securities without dealer licensing provided the issuer does not receive commissions or other remuneration for the selling efforts [see section 1707.01(E)(1)(a) of the Revised Code.] An escrow of securities or proceeds may be required pursuant to OAC 1301:6-3-09(C).
Assuming compliance with section 1707.09 of the Revised Code, OAC 1301:6-3-09, published merit standards and the securities are not to be sold on grossly unfair terms or in a manner tended to deceive or defraud (see section 1707.13 of the Revised Code), SCOR offerings will receive a 13 month period of effectiveness (see OAC 1301:6-3-09(B)(1).) However,issuers are obligated to notify the Division of any material change in the issuer or offering pursuant to OAC 1301:6-3-09(B)(2) and section 1707.44(B)(2) of the Revised Code.
