The rule setting forth the notice filing requirement for Nebraska's limited offering exemption at Section 8-1111(9) of the State's Securities Act was amended, effective June 25, 2011. Here is a summary of the adopted changes:
1. The mailing address for filing the notice with the Nebraska Department of Banking and Finance is now P.O. Box 95006, Lincoln, Nebraska 68509.
2. Contents of notice. The information provided in the notice must include, among other things:
--Currently, the name and address of the broker-dealer representing the seller in promoting the offering. As amended, the name and address of any officer, director, manager, member or other person representing the seller in promoting the offering if there is no broker-dealer representing the seller.
--Currently, the total dollar amount of the securities, but as amended, that are sold as of the date of the filing whether or not [sold] in Nebraska.
--As added, the dollar amount of securities to be offered during the 12-month period following the filing, whether or not [offered] in Nebraska.
3. NEW: Additional filings. Audited financial statement and sales report requirement for issuers either: (1) having made sales under the limited offering exemption for five consecutive 12-month periods; OR (2) having total sales of $1 million from one or more offerings under the limited offering exemption.
The required information must be filed no later than 90 days after the date the issuer files the fifth consecutive annual notice claiming the limited offering exemption OR the date the issuer's total sales of the securities exceed $1 million.
The financial statements must include a balance sheet, an income statement, a cash flow statement and a net worth computation, as of the end of the issuer's most recent fiscal year. The financial statements must be examined according to generally accepted auditing standards and prepared to comform to GAAP; and audited by an independent CPA containing the CPA's opinion of the issuer's financial position.
The sales report must include the name and address of all purchasers and holders of the issuer's securities, the amount of securities held, the dates the purchases were made and a statement whether each purchaser or holder is an "accredited investor" and, if so, whether their accredited investor status is based on net worth or net income.
Issuers must file audited financial statements and sales reports with the Nebraska Director of the Department of Banking and Finance each time the issuer sells an additional $1 million in securities or after the lapse of each additional 60-month period when sales are made.
NOTE WELL: This additional filing is a necessary precursor to attaining the exemption for issuers who fall within one of the two abovementioned categories, by either having made sales under the limited offering exemption for five consecutive 12-month periods or by having total sales of $1 million from one or more offerings under the limited offering exemption. Issuers in one of these categories who do not make the filing will lose the exemption. Moreover, they will be in violation of the registration provision of the Nebraska Securities Act if they effect sales without first making the additional filing.
Effectiveness. A notice filed to claim the limited offering exemption remains effective until, as amended, the first of the following two events occur: Either sales are made to 15 persons (excluding persons designated in Nebraska's financial institutions/institutional investor, existing security holder or employee benefit plan exemptions), OR one year from the date of the first sale.
With questions about the amendments please contact Sheila Cahill, Legal Counsel at the Securities Bureau, by emailing sheila.cahill@bkg.ne.gov or by phoning (402) 471-3445.