2. 4. A balance sheet of the issuer as of the end of the last fiscal year preceding the date of filing, and statements of income and changes in financial position and an analysis of surplus of the issuer shall be have been filed for each of its 3 immediately preceding fiscal years meeting the requirements of s. DFI-Sec 7.06. SECTION 28. DFI-Sec 2.01 (6) (a) (intro.) and (b) is created to read:
DFI-Sec 2.01 (6) (a) (intro.) A security qualifies under the exemption described in sub. (5) if the issuer and any predecessor have not defaulted within the current fiscal year or the 3 preceding fiscal years in any fixed interest or principal obligation, and the security qualifies under either subds. 1. and 2. or subds. 3. and 4., as follows:
(b) The division may issue an order denying or revoking an exemption that is otherwise available under sub. (5) within 10 days of the division’s receipt of a notice filed under sub. (5).
SECTION 29. DFI-Sec 2.02 (1) is amended to read:
DFI-Sec 2.02 (1) An “isolated nonissuer transaction” within the meaning of s. 551.202 (1), Stats., means all of the following: (a) Any sale of an outstanding security by or on behalf of a person not in control of the issuer or controlled by the issuer or under common control with the issuer and not involving a distribution; but, except that if the sale is effected through a broker-dealer, the transaction is deemed isolated only if it is one of not more than 5 such transactions effected by or through the broker-dealer in this state during the prior 12 months; and.
(b) Any sale of an outstanding security by or on behalf of a person in control of the issuer or controlled by the issuer or under common control with the issuer if the sale is effected pursuant to brokers’ transactions in accordance with section 4 (4) of the Securities Act of 1933 and rule 144 thereunder;, or pursuant to any other transaction not effected through a broker-dealer and not involving a distribution if the sale, including any other sales by the person of securities of the same class during the prior 12 months, does not exceed 1% of the outstanding shares or units of that class.
SECTION 30. DFI-Sec 2.02 (2) is amended to read:
_Hlk167881777DFI-Sec 2.02 (2) In With regard to a transaction between a broker-dealer and a purchaser of a security, in any nonissuer transaction effected by or through a registered broker-dealer under s. 551.202 (6), Stats., pursuant to an unsolicited order or offer to purchase, the broker-dealer shall obtain from the purchaser a written acknowledgment that the purchase was unsolicited, or the confirmation delivered to the purchaser or a memorandum delivered in connection therewith shall confirm that the purchase was unsolicited by the broker-dealer or any agent of the broker-dealer. This exemption includes only transactions between a broker-dealer and a purchaser of a security. SECTION 31. DFI-Sec 2.02 (5) is amended to read:
DFI-Sec 2.02 (5) With Subject to par. (d), with respect to an offer or sale of a security exempted under s. 551.202 (14) or (24), Stats.: (a) Offerees or persons holding directly or indirectly all the issuer's securities include all joint or common owners and all beneficial owners of its securities, and all beneficial owners of any corporation, partnership, association, or trust holding any of the issuer's securities and organized in connection with the offer or sale of the securities, provided that any relative or spouse, or any relative of the spouse, taking or holding the securities in joint or common tenancy with and having the same home as the offeree or person, shall not be deemed a separate offeree or person;.
(b) Issuers affiliated by reason of direct or indirect control or persons affiliated by reason of direct or indirect control of any issuer are deemed to be a single issuer or person;, but use of an exemption for the offer and sale of securities by such affiliated issuer or person shall may not be denied on account of such the affiliation provided if the offer and sale are not part of a common business purpose or plan of offering, or if upon the filing of an application the division so orders. A “common business purpose or plan of offering" is presumed where the offer or sale of securities is not separate and distinct from another offer and sale of securities with respect (i) the application of proceeds, (ii) the physical proximity of real property or other assets, or (iii) the financial affairs of the business; .
(d) The exemption for any offer or sale under s. 551.202 (14), Stats., is withdrawn with respect to any of the following: _Hlk1678842531. Except as provided in this subdivision, any Any offer or sale of interests in an entity that is or will be primarily engaged in oil, gas or mining activities, any investment contract irrespective of the kind of assets held or business engaged in by the enterprise, or any certificate of interest or participation in an oil, gas or mining title or lease, or in payments out of production under the title or lease, if the aggregate offering price or face amount, whichever is greater, of all securities to be offered by or on behalf of the issuer, together with the value of any securities sold to persons in this state by or on behalf of the issuer during the prior 12 months, exceeds $100,000, unless prior to the offering the issuer files a notice of the proposed offer or sale with the division, including any prospectus, circular, or other material to be delivered to offerees, and other information as the division may require, and the division does not by order withdraw, deny or revoke the exemption within 10 days. This paragraph subdivision is not applicable to any offer or sale made by a broker-dealer registered in Wisconsin if the broker-dealer is not affiliated with either the issuer or sponsor of the issuer by means of direct or indirect common control;. 2. Any offering of securities if the issuer, any of its officers, directors, general partners, controlling persons, or affiliates thereof are or would be disqualified from use of the registration exemption in s. DFI-Sec 2.029 as a result of any of the causes specified in s. DFI-Sec 2.029 (3) (a) 1. to 4., except for any person or persons subject to a disqualification who meets the conditions for waiver in s. DFI-Sec 2.029 (3) (b) 1., or for any person who receives a waiver by the division upon a showing of good cause that it is not necessary under the circumstances that use of the exemption be withdrawn. SECTION 32. DFI-Sec 2.02 (7) is amended to read:
DFI-Sec 2.02 (7) (a) “Stock dividend or equivalent equity distribution" within the meaning of , as those terms are used in s. 551.202 (22), Stats., does not include any action by the corporation which has or may have the effect of consolidating securities of a class of outstanding equity securities into a smaller number of securities of that class;. (b) “Stock dividend" within the meaning of , as that term is used in s. 551.202 (22), Stats., includes the issuance of shares under a dividend reinvestment plan in which the election by a shareholder to participate in the plan is voluntary and such election may be rescinded at any time upon notice to the issuer. SECTION 33. DFI-Sec 2.02 (9) (intro.), (a), (c), (d), (g), (h), (i), (k), (L) (intro.), and (n) (intro.) and 1. are amended to read:
DFI-Sec 2.02 (9) (intro.) The following transactions are exempted as described under s. 551.203, Stats., without limiting the division's authority thereunder: (a) An exemption under this subsection is available for any Any isolated issuer transaction relating to redeemable securities of an investment company registered under the investment company act of 1940, effected through a registered broker-dealer pursuant to an unsolicited order or offer to purchase, provided that the broker-dealer obtains from the purchaser a written acknowledgment that the purchase was unsolicited or the confirmation delivered to the purchaser or a memorandum delivered in connection therewith confirms that the purchase was unsolicited by the broker-dealer or any agent of the broker-dealer. A transaction is presumed to be “isolated" if it is one of not more than 3 such transactions during the prior 12 months.
(c) Any transaction pursuant to an offer to existing security holders of the issuer, and to not more than 25 other persons in this state less the number of persons in this state with whom the issuer has effected any transactions during the period of 12 preceding the offer pursuant to s. 551.202 (14) and (24), Stats., excluding persons listed in s. 551.202 (13), Stats., and rules there under thereunder, if no commission or other remuneration other than a standby commission is paid or given directly or indirectly for soliciting any security holder in this state; and if the issuer files with the division prior to the offering a notice specifying the terms of the offer, including any prospectus, circular, or other material to be delivered to offerees in connection with the transaction and such other information as the division may require, and the division does not by order disallow the exemption within 10 days. (d) For purposes of the registration exemption in s. 551.202 (2), Stats., any Standard & Poor's OTCQX Best Market, OTCQB Venture Market, Mergent, or Fitch securities manual, or their electronic equivalent, that contains, in whatever format, the information specified in s. 551.202 (2) (d) 1. to 4., Stats., is designated as a “nationally recognized securities manual" under s. 551.202 (2) (d), Stats. (g) Any offer by a registered broker-dealer pursuant to a preliminary prospectus, provided if all the following requirements are met:
2. The preliminary prospectus has been filed with the U.S. securities and exchange commission or the division for a period of 10 days, and the division does not by order deny the exemption; and .
3. Before the securities referred to in subd. 1. may legally be sold, no customer funds are may be received, and no customer signs may sign any subscription agreement or similar document relating to the securities offered other than a tentative reservation of securities that is not binding on the subscriber until ratified by the subscriber after the securities may legally be sold. _Hlk167894182(h) Any transaction, in other than the initial public offering, involving any government security, other than a revenue obligation and other than a security issued or guaranteed by the United States, or any agency or corporate instrumentality of the United States, where the government security is of investment quality rating as determined by the office of the division of banking for the state of Wisconsin or by the U.S. comptroller of the currency by virtue of credit worthiness, or any transaction involving any government security dated prior to the effective date of this paragraph except that this paragraph does not apply to any of the following: 1. A government security that is a revenue obligation.
2. A government security issued by the United States or any agency or corporate instrumentality of the United States.
(i) Any offer or sale of securities that qualifies for use of a transactional registration exemption under s. DFI-Sec 2.027, or 2.028 or 2.029. (k) Any offer, but not a sale, of a security through a presentation to potential investors at an organized venture capital fair or other investment forum designated in writing by the division. In order to To be designated as a venture capital fair or investment forum for purposes of this exemption, a written application for designation shall be submitted to the division either by a sponsor of the fair or forum or by any interested person if accompanied by the written affirmation of a sponsor, setting forth the dates, places, and times the activity will take place, the names and addresses of all sponsors of the activity, and the criteria to be met for a firm or person to participate in the fair or forum. Within 10 days from the receipt of the application or 10 days from the date of receipt of any amendment or supplemental information to the application required by the division, the division shall either designate the applicant a venture capital fair or investment forum or notify the applicant in writing why such a designation will not be made. For purposes of this paragraph, the terms “venture capital fair" or “investment forum" include, but are not limited to, gatherings open to public attendance that are sponsored by one or more not-for-profit entities at which persons representing existing or proposed businesses may make presentations regarding their business plans and products, or their financing or investment capital needs or proposals.
(L) (intro.) An exemption under this subsection is available for any Any transaction by the sponsor of a unit investment trust involving the resale of a share of beneficial interest in the trust that meets all of the following conditions:
Any offer or sale of a security by an issuer in a transaction that meets each of the following requirements based on the North American Securities Administrators Association Model Accredited Investor Exemption, subject to DFI-Sec 2.023, and except for an issuer who is an issuer that is in the development stage that either has no specific business plan or purpose or had indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person:
1. Sales of the securities shall be that are made only to persons who are accredited investors as defined in 17 CFR 230.501(a), or who the issuer reasonably believes are accredited investors. SECTION 34. DFI-Sec 2.02 (9) (n) 2. is repealed.
SECTION 35. DFI-Sec 2.02 (9) (n) 5. is renumbered DFI-Sec 2.023 (1), and, as renumbered, is amended to read:
DFI-Sec 2.023 (1) A general announcement of the a proposed offering described in DFI-Sec 2.02 (9) (n) may be made by any means, which and shall include each of the following information items only, except as provided in subd. 6. sub. (2), and unless additional information is specifically permitted by the division: (a) The name, address, and telephone number of the issuer of the securities;.
(b) The name, a brief description and price, if known, of any security to be issued;.
(c) A brief description of the business of the issuer in 25 words or less; or fewer.
(d) The type, number and aggregate amount of securities being offered;.
(e) The name, address and telephone number of the person to contact for additional information; and.
(f) A statement disclosing that sales will only be made to accredited investors, that no money or other consideration is being solicited or will be accepted by way of this general announcement, and that the securities have not been registered with or approved by any state securities agency or the U.S. securities and exchange commission and are being offered and sold pursuant to an exemption from registration.
SECTION 36. DFI-Sec 2.02 (9) (n) 6. is renumbered DFI-Sec 2.023 (2) and (2) (intro.) and (a), as renumbered, are amended to read:
DFI-Sec 2.023 (2) (intro.) The issuer, in connection with an offer, may provide information in addition to the general announcement under subd. 5. sub. (1), if the information meets either one of the following requirements of this subdivision: (a) The information is delivered through an electronic database that is restricted to persons who have been prequalified as accredited investors; or .
SECTION 37. DFI-Sec 2.02 (9) (n) 7. is renumbered DFI-Sec 2.023 (3), and, as renumbered, is amended to read:
DFI-Sec 2.023 (3) No telephone solicitation shall may be permitted unless, prior to placing the call, the issuer reasonably believes that the prospective purchaser to be solicited is an accredited investor.
SECTION 38. DFI-Sec 2.02 (9) (n) 8. is amended to read:
DFI-Sec 2.02 (9) (n) 8. Dissemination of the The general announcement of the proposed offering is disseminated to persons who are not any person, without regard to whether the person is an accredited investors shall not disqualify the issuer from claiming the exemption under this rule investor.
_Hlk168069005SECTION 39. DFI-Sec 2.02 (9) (n) 9. is amended to read: DFI-Sec 2.02 (9) (n) 9. The issuer shall file with the division within Within 15 days after the first sale in this state in reliance on this exemption, the issuer files with the division a copy of the general announcement, a consent to service of process, a the fee of $200 described under DFI-Sec s. 7.01 (2) (d), and a completed Form AI as prescribed in s. DFI-Sec 9.01 (1) (e) 9.01 for use of this exemption. SECTION 40. DFI-Sec 2.02 (9) (o) is amended to read:
DFI-Sec 2.02 (9) (o) Pursuant to s. 551.203, Stats., and subject to the fee under DFI-Sec s. 7.01 (2) (d) a transactional securities registration exemption is available for the sale of any outstanding security by or on behalf of a person not the issuer and not in control of the issuer or controlled by the issuer or under common control with the issuer at a price reasonably related to the current market price if the issuer or an applicant files with the division prior to the offering a notice of the proposed sale, including and includes all of the following, and the exemption, unless disallowed by order of the division within 10 days, is effective so long as the information required to be furnished is kept current: the 1. The prospectus used in the most recent offering of the securities proposed to be sold; a .
2. A copy of the issuer's articles of incorporation and by-laws, or equivalents, as currently in effect; any .
3. Any information specified in ss. DFI-Sec 3.02 and 3.03, and not contained in the filed prospectus; the. 4. The trust indenture, if any, under which the securities proposed to be sold are issued; the information.
5. Information, if any, concerning the public market for the security; a.
6. A balance sheet of the issuer as of the end of the last fiscal year of the issuer preceding the date of filing and statements of income and changes in financial position and analysis of surplus for such fiscal year meeting the requirements of s. DFI-Sec 7.06; an . 7. An undertaking to file with the division within 120 days (180 days with respect to a corporation organized and operated not for private profit but exclusively for religious, educational, benevolent or charitable purpose) after the end of each fiscal year of the issuer comparable financial statements of the issuer for each such fiscal year; and an.
8. An undertaking to furnish the division with a written report within 30 days after the happening of any material event affecting the issuer or the securities proposed to be sold. The exemption, unless disallowed by order of the division within 10 days, is effective so long as the information required to be furnished is kept current.
SECTION 41. DFI-Sec 2.023 (title) and (intro.) are created to read:
DFI-Sec 2.023 Conditions related to a sale or offering of certain securities.
(intro.) A transaction described in DFI-Sec s. 2.02 (9) (n) is subject to the following provisions: SECTION 42. DFI-Sec 2.027 (1) (intro.) and (a) to (d) are amended to read:
_Hlk168305862DFI-Sec 2.027 (1) (intro.) A transaction exemption is available under s. 551.203, Stats., for an offer, but not a sale, of a security made by or on behalf of an issuer pursuant to delivery of a written document or, use of a newspaper publication or, scripted media broadcast, or electronic communication containing the information prescribed in the form in s. DFI-Sec 9.01 (1) (c), for the sole purpose of soliciting an indication of interest from prospective purchasers in receiving a prospectus, private placement memorandum, or equivalent disclosure document for the security, if all of the following conditions are satisfied, except to the extent that subject to sub. (2) is applicable. (a) The issuer intends that sales of the security be either any of the following:
1. Registered under ch. 551, Stats.; or . 2. Exempt from registration under an available exemption in any subsection of s. 551.202, Stats., or any exemption rule under s. 551.203, Stats. (b) Not later than the date of the initial solicitation of interest made under this section, the offeror shall file files with the division a completed solicitation of interest form as prescribed in s. DFI-Sec 9.01 (1) (c) ch. 9.01, together with any other materials to be used to conduct solicitations of interest, including, but not limited to, the script of any broadcast to be made and a copy of any notice to be published. Material amendments to the solicitation of interest form or to any related materials used to conduct solicitations shall be filed with the division not later than the date of their first use. Any written document or electronic communication under this subsection may include a coupon, returnable to the issuer indicating interest in a potential offering, revealing the name, address, and telephone number of the prospective purchaser. (c) The text of any published notice or script for broadcast, and any printed material delivered in any solicitation of interest under this section, shall begin begins with the disclosures and information required in, and in the format of, the solicitation of interest form specified in s. DFI-Sec 9.01 (1) (c). (d) The offeror does not know, and in the exercise of reasonable care could not know, that any of the issuer's officers, directors, general partners, controlling persons, or affiliates thereof are or would be disqualified from use of the registration exemption in s. DFI-Sec 2.029 as a result of any of the causes specified in s. DFI-Sec 2.029 (3) (a) 1. to 4. except for any person or persons subject to a disqualification who meets the conditions for waiver in s. DFI-Sec 2.029 (3) (b) 1. SECTION 43. DFI-Sec 2.027 (1) (e) and (f) are renumbered DFI-Sec 2.027 (2) (c) and (d), and, as renumbered, are amended to read:
DFI-Sec 2.027 (2) (c) Solicitations (intro.) The issuer may not make solicitations of interest pursuant to this section shall not be made after the filing of either a:
1. After a registration statement is filed under ch. 551, Stats., the filing of . 2. After materials required for a claim of registration exemption are filed under s. 551.202 or 551.203, Stats., or use of . 3. By using any available self-executing exemption under s. 551.202 or 551.203, Stats. (d) Sales of the securities that are the subject of solicitations of interest under this section shall may not be made until 20 calendar days after the last delivery of a written solicitation of interest document or, a radio or television solicitation broadcast, or other media solicitation publication.
SECTION 44. DFI-Sec 2.027 (2) is amended to read:
DFI-Sec 2.027 (2) (a) A An offeror's failure to comply with any of the conditions in sub. (1) will not result in the loss of the securities registration exemption under this section for any offer to a particular individual or entity if the offeror demonstrates each all of the following are met apply: 1. The failure to comply did not pertain to a condition directly intended to protect that particular individual or entity; and .
2. The failure to comply was insignificant with respect to the offering as a whole; and .
3. A good faith and reasonable attempt was made to comply with the conditions in sub. (1) (a) to (f) (d). (b) Where an exemption is established only through reliance upon this subsection, the failure to comply with the conditions in sub. (1) (a) to (f) (d) shall constitute a basis for action that may be taken by the division under s. 551.603, Stats., and shall constitute a basis for action that may be taken by the division under s. 551.204, Stats., to deny or revoke the exemption as to a specific security or transaction. SECTION 45. DFI-Sec 2.028 (intro.), (1) (a), (4), (7) (a) and (b), and (8) (intro), (a) and (b) are amended to read:
