Utah Investment Letter - Intrastate Offering

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Certain stock issue transactions are exempt (i.e., exempt from registration with the Securities and Exchange Commission). The most common exempt transaction that close corporations take advantage of is the intrastate offering. To qualify for this exemption, both the investors and the issuer must all be residents of the same state. The issuer must also meet the following requirements: • 80% of its assets must be located in the state; • 80% of its income must be earned from operations within the state; and • 80% of the proceeds from the sale must be used on operations within the state. Also, for nine months after the issuance, the stock can only be sold to state residents.

The Utah Investment Letter — Intrastate Offering is a vital document for investors interested in participating in intrastate investment opportunities within the state of Utah. This letter provides comprehensive information about the intricacies and regulations surrounding such offerings, serving as a valuable resource for individuals seeking to make informed investment decisions. Intrastate offerings refer to investment opportunities that are limited to residents and businesses within the boundaries of a single state, in this case, Utah. These offerings are governed by specific regulations established by the Utah Division of Securities to protect investors and promote economic growth within the state. The Utah Investment Letter — Intrastate Offering contains essential details on the legal requirements, procedures, and restrictions associated with these offerings. It outlines the eligibility criteria for both issuers and investors, ensuring that only qualified participants can engage in such investment activities. One of the key purposes of this letter is to inform potential investors about the types of intrastate offerings available in Utah. There are several categories of offerings that fall under the umbrella of the Utah Investment Letter — Intrastate Offering: 1. Equity-based Offerings: These involve the issuance of stock or ownership stakes in a Utah-based company. Investors have the opportunity to purchase equity in local businesses, supporting the growth and development of the Utah economy while potentially reaping financial rewards. 2. Debt-based Offerings: This type of intrastate offering involves the issuance of debt instruments like bonds or promissory notes by Utah-based entities. Investors lend money to these entities in return for regular interest payments and the return of the principal amount over a specified period. 3. Real Estate Offerings: Intrastate real estate offerings provide investors with the chance to invest in Utah-based real estate projects, such as residential, commercial, or industrial properties. These offerings often offer potential for long-term capital appreciation and income derived from property rentals or sales. 4. Renewable Energy Offerings: Utah has a growing renewable energy sector, and these offerings allow investors to support and participate in the development of clean energy projects within the state. Investments in solar, wind, or geothermal projects offer the potential for financial returns while fostering sustainable energy production. The Utah Investment Letter — Intrastate Offering also provides important information on the risks associated with these offerings, including the illiquid nature of intrastate securities, the potential for loss of investment, and the lack of regulatory oversight beyond the state-level. In summary, the Utah Investment Letter — Intrastate Offering is a comprehensive document that informs and educates potential investors about the various types of intrastate investment opportunities available in Utah. It helps ensure compliance with state regulations while encouraging economic growth by connecting local businesses and projects with interested investors.

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FAQ

A securities offering exempt from registration with the SEC is sometimes referred to as a private placement or an unregistered offering. Under the federal securities laws, a company may not offer or sell securities unless the offering has been registered with the SEC or an exemption from registration is available.

Rule 147 is a safe harbor that exists under Section 3(a)(11) of the Securities Act of 1933, and can be used by companies to raise funds without federal registration. More specifically, it provides an exemption for a securities offering that takes place entirely within one state.

Rule 147 is a rule that can be used by a company to raise funds without actually registering with the Securities and Exchange Commission (SEC).

Rule 504 of Regulation D provides an exemption from the registration requirements of the federal securities laws for some companies when they offer and sell up to $5,000,000 of their securities in any 12-month period.

In the United States, an intrastate offering is a securities offering that can only be purchased in the state in which it is being issued. Because the offering only includes one state, it does not fall under the jurisdiction of the Securities and Exchange Commission (SEC).

A Regulation D offering is intended to make access to the capital markets possible for small companies that could not otherwise bear the costs of a normal SEC registration. Reg D may also refer to an investment strategy, mostly associated with hedge funds, based upon the same regulation.

In 2016, the SEC amended Rule 147 to modernize it and establish an intrastate offering exemption known as Rule 147A. The amended rule allows for offers of securities to be made available to out-of-state residents, as well as for the exemptions to apply to issuers of securities that incorporated out-of-state.

Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time.

2 Section 3(a)(11) of the Securities Act is generally known as the intrastate offering exemption. To qualify for the exemption, an issuer must be organized in the state where it is offering the securities; carry out a significant amount of its business in that state; and make offers and sales only to residents of

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Utah Investment Letter - Intrastate Offering