Title 7
Corporations, Associations, and Partnerships

Chapter 11
Rhode Island Uniform Securities Act

Part III
Registration of Securities

§ 7-11-302. Registration by filing.

(a) Securities for which a registration statement has been filed under the Securities Act of 1933, 15 U.S.C. § 77a et seq., in connection with the offering of the securities, may be registered by filing, whether or not they are also eligible for registration under § 7-11-303 or § 7-11-304, if the following conditions are satisfied:

(1) The issuer is organized under the laws of the United States or a state or, if the issuer is not organized under the laws of the United States or a state, it has appointed a duly authorized agent in the United States for service of process;

(2) The issuer has actively engaged in business operations in the United States for a period of at least thirty-six (36) consecutive calendar months immediately before the filing of the federal registration statement;

(3) The issuer has registered a class of equity securities under § 12(b) or 12(g) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78l(b) or (g), which class of securities is held of record by five hundred (500) or more persons;

(4) The issuer has:

(i)(A) A total net worth of four million dollars ($4,000,000); or

(B) A total net worth of two million dollars ($2,000,000) and net, pretax income from operations before allowances for extraordinary items, for at least two (2) of the three (3) preceding fiscal years;

(ii) Not less than four hundred thousand (400,000) units of the class of security registered under § 12 of the Securities Exchange Act of 1934, 15 U.S.C. § 78l, held by the public, excluding securities held by officers and directors of the issuer, underwriters, and persons beneficially owning ten percent (10%) or more of that class of security; and

(iii) Outstanding warrants and options held by the underwriters and executive officers and directors of the issuer in an amount not exceeding ten percent (10%) of the total number of shares to be outstanding after completion of the offering of the securities being registered;

(5) The issuer has been subject to the requirements of § 12 of the Securities Exchange Act of 1934 and has filed all the material required to be filed under §§ 13 and 14 of that Act, 15 U.S.C. §§ 78m and 78n, for at least thirty-six (36) calendar months immediately before the filing of the federal registration statement and the issuer has filed in a timely manner all reports required to be filed during the twelve (12) calendar months immediately before the filing of the federal registration statement;

(6) For a period of at least thirty (30) days during the three (3) months preceding the offering of the securities registered, there have been at least four (4) market makers for the class of equity securities registered under § 12 of the Securities Exchange Act of 1934;

(7) Each of the underwriters participating in the offering of the securities, and each broker-dealer who will offer the securities in this state, is a member of, or is subject to the rules of fair practice of, a national association of securities dealers with respect to the offering, and the underwriters have contracted to purchase the securities offered in a principal capacity;

(8) The aggregate commissions or discounts to be received by the underwriters will not exceed ten percent (10%) of the aggregate price at which the securities being registered are offered to the public;

(9) Neither the issuer, nor any of its subsidiaries, since the end of the last fiscal year preceding the filing of the registration statement, have:

(i) Failed to pay a dividend or sinking-fund installment on preferred stock;

(ii) Defaulted on indebtedness for borrowed money; or

(iii) Defaulted on the rental of one or more long-term leases; which defaults in the aggregate are material to the financial position of the issuer and its subsidiaries, taken as a whole; and

(10) In the case of equity securities, the price at which the securities will be offered to the public is not less than five dollars ($5.00) per share.

(b) A registration statement under this section must contain the following information and be accompanied by the following documents, in addition to the information specified in § 7-11-305(c) and the consent to service of process required by § 7-11-708:

(1) A statement demonstrating eligibility for registration by filing;

(2) The name, address, and form of organization of the issuer;

(3) With respect to a person on whose behalf a part of the offering is to be made in a nonissuer distribution: name and address; the amount of securities of the issuer held by the person as of the date of the filing of the registration statement; and a statement of the reasons for making the offering;

(4) A description of the securities being registered; and

(5) A copy of the latest prospectus filed with the registration statement under, and satisfying the requirements of, § 10 of the Securities Exchange Act of 1933, 15 U.S.C. § 77j.

(c) If the information and documents required to be filed by subsection (b) have been on file with the director for at least five (5) business days, or any shorter period as the director allows by rule or order, and the applicable registration fee has been paid before the effectiveness of the federal registration statement, a registration statement under this section automatically becomes effective concurrently with the effectiveness of the federal registration statement. If the federal registration statement becomes effective before the conditions in this subsection are satisfied and they are not waived, the registration statement becomes effective when the conditions are satisfied. The registrant shall promptly notify the director by telephone or electronic mail of the date and time when the federal registration statement becomes effective, and any content of the price amendment, and shall promptly file a post-effective amendment containing the information and documents in the price amendment. The director shall promptly acknowledge receipt of notification and effectiveness of the registration statement as of the date and time the registration statement became effective with the Securities and Exchange Commission.