§ 10-04-08 — Registration by qualification

North Dakota § 10-04-08

• Jurisdiction: North Dakota
• Title 10: Corporations
• Ch. 10-04: Supervision of Issue and Sale of Securities

Text

Securities required to be registered by qualification under this chapter before they may be
sold in this state must be registered as provided in this section. Application for registration of
securities by qualification must be made by the issuer of the securities or by a registered
broker-dealer by filing with the department:
1. An application for registration, which must be made in writing or on forms prescribed
by the commissioner, must contain the following information and be accompanied by
the following documents:
a. With respect to the applicant or issuer and any significant subsidiary:
(1) Its name, address, and form of organization;
(2) The state of foreign jurisdiction and date of its organization;
(3) The general character and location of its business;
(4) A general description of its physical properties and equipment; and
(5) A statement of the general competitive conditions in the industry or business
in which it is or will be engaged.
b. With respect to every director and officer of the issuer, or person occupying a
similar status or performing similar functions:
(1) The person's name, address, and principal occupation for the past five
years;
(2) The amount of securities of the issuer held by the person as of a specified
date within thirty days of the filing of the application for registration;
(3) The amount of the securities covered by the application for registration to
which the person has indicated an intention to subscribe; and

(4) A description of any material interest in any transaction with the issuer or
any subsidiary effected within the past three years or proposed to be
effected.
c. With respect to persons covered by subdivision b, the remuneration paid during
the past twelve months and estimated to be paid during the next twelve months,
directly or indirectly, by the issuer to all those persons in the aggregate.
d. With respect to any person owning of record, or beneficially if known, ten percent
or more of the outstanding shares of any class of equity security of the issuer, the
information specified in subdivision b other than the person's occupation.
e. With respect to every promoter if the issuer was organized within the past three
years, the information specified in subdivision b, any amount paid to the promoter
within that period or intended to be paid to the promoter, and the consideration for
any such payment.
f. With respect to any person on whose behalf any part of the offering is to be made
in a nonissuer distribution:
(1) The person's name and address;
(2) The amount of securities of the issuer held by the person as of the date of
the filing of the application for registration;
(3) A description of any material interest in any transaction with the issuer or
any subsidiary effected within the past three years or proposed to be
effected; and
(4) A statement of the person's reasons for making the offering.
g. The title, kind, classes, and amount of securities to be offered in this state; the
proposed offering price to the public or the method by which it is to be computed;
any variation therefrom at which any proportion of the offering is to be made to
any person or class of persons other than the underwriters, with a specification of
any such person or class; the basis upon which the offering is to be made if
otherwise than for cash; the maximum amount of commission or other form of
remuneration to be paid in cash or otherwise, directly or indirectly, for or in
connection with the sale or offering for sale of such securities; the estimated
aggregate underwriting and selling discounts or commissions and finders' fees,
including separately cash, securities, contracts, or anything else of value to
accrue to the underwriters or finders in connection with the offering, or, if the
selling discounts or commissions are variable, the basis of determining them and
their maximum and minimum amounts; the estimated amounts of other selling
expenses, including legal, engineering, and accounting charges and a statement
as to what person, corporation, or limited liability company shall be responsible
for payment of the same; the name and address of every underwriter and every
recipient of a finder's fee; a copy of any underwriting or selling-group agreement
pursuant to which the distribution is to be made, or the proposed form of any such
agreement whose terms have not yet been determined; and a description of the
plan of distribution of any securities which are to be offered otherwise than
through an underwriter.
h. The estimated cash proceeds to be received by the issuer from the offering; the
purposes for which the proceeds are to be used by the issuer; the amount to be
used for each purpose; the amounts of any funds to be raised from other sources
to achieve the purposes stated; the sources of any such funds; and, if any part of
the proceeds is to be used to acquire any property, including goodwill, otherwise
than in the ordinary course of business, the names and addresses of the vendors,
the purchase price, the names of any persons who have received commissions in
connection with the acquisition, and the amounts of any such commissions and
any other expense in connection with the acquisition.
i. A description of each and every stock option or other security option outstanding,
or to be created in connection with the offering, including the price at which such
options may be exercised together with the amount of any such options held or to
be held by every person.

j. The capitalization and long-term debt of the issuer and any subsidiary, including a
description of each security outstanding or being registered or otherwise offered,
and a statement of the amount and kind of consideration for which the issuer or
any subsidiary has issued any of its securities within the past two years or is
obligated to issue any of its securities.
k. The dates of, parties to, and general effect concisely stated of, every
management or other material contract made or to be made otherwise than in the
ordinary course of business if it is to be performed in whole or in part at or after
the filing of the application for registration or was made within the past two years,
together with a copy of every such contract; and a description of any pending
litigation or proceeding to which the issuer is a party and which affects its
business or assets.
l. A detailed statement showing the items of cash, property, services, patents,
goodwill, and any other consideration for which any securities of the issuer have
been within two years or are to be issued in payment.
m. A copy of any prospectus, pamphlet, circular, form letter, advertisement, or other
sales literature intended as of the effective date to be used in connection with the
offering.
n. A specimen or copy of the security being registered; a copy of the issuer's articles
of incorporation and bylaws, as currently in effect; and a copy of any indenture or
other instrument covering the security to be registered.
o. A balance sheet of the issuer as of a date within four months prior to the filing of
the application for registration; a profit and loss statement and analysis of surplus
for each of the three fiscal years preceding the date of the balance sheet and for
any period between the close of the last fiscal year and the date of the balance
sheet, or for the period of the issuer's and any predecessor's existence if less
than three years; and, if any part of the proceeds of the offering is to be applied to
the purchase of any business, the same financial statements which would be
required if the business were the registrant.
p. Other states in which it is proposed to offer the securities for sale to the public;
other states in which the securities are eligible for sale to the public; states which
have refused, by order or otherwise, to render the securities eligible for sale to
the public or have revoked or suspended the right to sell the securities, or in
which an application for registration has been withdrawn; and, if application has
been made to register the securities under the federal Securities Act of 1933, the
date upon which the application to register the securities was first filed, and a
statement as to whether registration under that Act is effective, and if so, the
effective date.
q. Such additional information as the commissioner requires by rule or order or may
subsequently request.
2. Payment of a filing fee for each security or class of security to be registered as follows:
a. For an initial filing, one-tenth of one percent of the aggregate amount of each
security or class of security to be registered but not more than two thousand five
hundred dollars.
b. In no event may an initial filing fee be less than one hundred fifty dollars for each
security or class of security to be registered.
c. An applicant may increase the aggregate amount of each security or class of
security to be registered by filing a notice of the additional aggregate dollar
amount to be registered and payment of a filing fee of one-tenth of one percent of
the additional aggregate dollar amount but not more than five hundred dollars.
d. No application shall be deemed to be filed or pending and no securities covered
by such application shall be deemed to be registered unless a filing fee has been
paid. The filing fee shall be retained even if the filing is withdrawn, denied,
suspended, revoked, or abandoned.
e. For the renewal of the registration of securities for additional periods of one year,
there must be paid a renewal fee of one hundred fifty dollars.

3. If the applicant is not domiciled in this state and is not a corporation or limited liability
company organized or authorized to transact business under the laws of this state, a
consent to service of process conforming to the requirements of section 10-04-14.
4. The commissioner may by rule or order require as a part of the application for
registration under this section that a prospectus containing any designated part of the
information specified in subsection 1 be submitted to the commissioner and the same
prospectus must be sent or given to each person to whom a sale or an offer to sell is
made. The commissioner may by rule or otherwise permit the omission of any item of
information or document from any application for registration. In all cases in which an
application is filed to register securities and a registration statement covering the same
securities has been filed with the federal securities and exchange commission, a copy
of the registration statement so filed must be accepted by the commissioner in lieu of
the information specified in subdivisions a through q of subsection 1, except that it
must be accompanied by a statement of the amount of such securities to be offered in
this state. All of the statements, exhibits, or documents of every kind required under
this section must be certified by the applicant or the issuer or any person having
knowledge of the facts. An applicant may, with the consent of the commissioner,
amend or withdraw an application and any or all statements, exhibits, or documents
filed therewith under this section at any time prior to the registration or prior to any
offering and sale of the securities sought to be registered or the entry of an order
denying the registration of such securities, but in no event may the fee be returned.
Registration under this section is effective for a period of one year.