Minnesota Session Laws - 1999, Regular Session

                            CHAPTER 103-S.F.No. 832 
                  An act relating to securities regulation; making 
                  changes applicable to securities registered under the 
                  small company offering registration; amending 
                  Minnesota Statutes 1998, section 80A.115, subdivisions 
                  4 and 9. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 80A.115, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CONDITIONS.] In order to register under this 
        section, all of the following conditions must be satisfied: 
           (1) the offering price for common stock and the exercise 
        price, if the securities offered are options, warrants, or 
        rights for common stock, and the conversion price if the 
        securities are convertible into common stock must be equal to or 
        greater than $5 $1 per share; and 
           (2) the aggregate offering price of the securities offered, 
        within or outside this state, may not exceed $1,000,000 less the 
        aggregate offering price of all securities sold within the 12 
        months before the start of and during the offering of the 
        securities under securities and exchange commission Rule 504 in 
        reliance on an exemption under section 3(b) of the Securities 
        Act of 1933.  The issuer may not split its common stock, or 
        declare a stock dividend for two years after effectiveness of 
        the registration, except that in connection with a subsequent 
        public offering, the issuer may upon application and consent of 
        the commissioner take this action.; 
           (3) unless an issuer or its predecessors have demonstrated 
        profitable operations for two of the three fiscal years prior to 
        registration, determined in accordance with generally accepted 
        accounting principles, after taxes and excluding extraordinary 
        items, the fair value of the equity investment, as defined by 
        the commissioner by rule, of such issuer shall be at least five 
        percent of the equity investment, as defined by the commissioner 
        by rule, that would result from the sale of all the securities 
        proposed to be offered; and 
           (4) the maximum quantity of cheap stock, as defined by the 
        commissioner by rule, allowable, expressed as a percentage of 
        the total number of shares to be outstanding after the proposed 
        offering, shall be determined by calculating the fair value of 
        equity investment as a percentage of equity investment in 
        accordance with the following formulations.  If the percentage 
        is 20 percent or less, the maximum quantity of cheap stock 
        allowable shall be 50 percent.  If the percentage is greater 
        than 20 percent, the maximum quantity of cheap stock allowable 
        shall be two times the percentage plus ten percent.  The maximum 
        quantity of cheap stock allowable shall not exceed 90 percent of 
        the total number of shares to be outstanding after the proposed 
        offering. 
           Sec. 2.  Minnesota Statutes 1998, section 80A.115, 
        subdivision 9, is amended to read: 
           Subd. 9.  [EFFECTIVE DATE.] A registration statement under 
        this section becomes effective when the commissioner so orders. 
        If no stop order is in effect and no proceeding is pending under 
        section 80A.13, a registration statement under this section 
        becomes effective automatically at 5:00 p.m. on the 20th full 
        business day after the filing of the registration statement or 
        the last amendment of it, or at such earlier time as the 
        commissioner by order determines. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 apply to securities offered or sold on or 
        after the date of enactment. 
           Presented to the governor April 23, 1999 
           Signed by the governor April 27, 1999, 11:21 a.m.