2012 Wyoming Statutes
TITLE 17 - CORPORATIONS, PARTNERSHIPS AND ASSOCIATIONS
CHAPTER 4 - SECURITIES
17-4-114. Exemptions from registration and literature filing requirements.

(a) The following securities are exempted from W.S. 17-4-107 and 17-4-115:

(i) Any security (including a revenue obligation) issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency or corporate or other instrumentality of one (1) or more of the foregoing; or any certificate of deposit for any of the foregoing;

(ii) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency or corporate or other instrumentality of one (1) or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor;

(iii) Any security issued by a state or national bank authorized to do business in the state;

(iv) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, or any building and loan or similar association organized under the laws of any state and authorized to do business in this state;

(v) Any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state;

(vi) Any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is:

(A) Subject to the jurisdiction of the interstate commerce commission;

(B) A registered holding company under the Public Utility Holding Company Act of 1935 or a subsidiary of such a company within the meaning of that act;

(C) Regulated in respect of its rates and charges by a governmental authority of the United States or any state; or

(D) Regulated in respect of the issuance or guarantee of the security by a governmental authority of the United States, any state, Canada, or any Canadian province.

(vii) Any security listed or approved for listing upon notice of issuance on the New York stock exchange, the American stock exchange or the National Association of Securities Dealers Automated Quotation National Market System (NASDAQ/NMS), the Chicago board options exchange or any other exchange or national quotation system that the secretary of state may designate by rule or order; any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so listed or approved; or any warrant or right to purchase or subscribe to any of the foregoing; or any security which meets all of the following conditions:

(A) 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 and has set forth the name and address of such agent in its prospectus;

(B) A class of the issuer's securities shall be registered under Section 12 of the Securities Exchange Act of 1934 and has been so registered for three (3) years immediately preceding the offering date;

(C) Neither the issuer nor a significant subsidiary has had a material default during the lesser of the last seven (7) years or the issuer's existence in the payment of principal, interest, dividend or sinking fund installment on preferred stock or indebtedness or rentals under leases with terms of three (3) years or more. A "material default" is a failure to pay, the effect of which is to cause indebtedness to become due prior to its stated maturity or to cause termination or reentry under a lease prior to its stated expiration, if the indebtedness or the rental obligation for the unexpired term exceeds five percent (5%) of the issuer's (and its consolidated subsidiaries) total assets, or if the arrearage in required dividend payments on preferred stock is not satisfied within thirty (30) days;

(D) The issuer has had consolidated net income (before extraordinary items and the cumulative effect of accounting changes) of at least one million dollars ($1,000,000.00) in four (4) of its last five (5) fiscal years, including its last fiscal year. In the case of interest-bearing debt securities, such net income for the issuer's last fiscal year before depreciation and taxes, shall be one and one-half (1 1/2) times the issuer's annual interest expense, giving effect to the proposed offering and the intended use of proceeds. "Last fiscal year" means the most recent fiscal year for which audited financial statements are available, provided that such statements cover a fiscal period ended not more than fifteen (15) months from the commencement of the offering;

(E) If the offering is of stock or shares (other than preferred stock or shares), the securities are owned beneficially or of record, on any date within six (6) months prior to the commencement of the offering, by at least one thousand two hundred (1,200) persons, and on that date there are at least seven hundred fifty thousand (750,000) of the shares outstanding with an aggregate market value, based on the average bid price, of at least three million seven hundred fifty thousand dollars ($3,750,000.00). In determining the number of persons who are beneficial owners of the stock or shares of an issuer, the issuer or broker-dealer may rely in good faith upon written information furnished by the record owners;

(F) If the offering is of stock or shares (other than preferred stock or shares) and except as otherwise required by law, the securities have voting rights at least equal to the securities of each of the issuer's outstanding classes of stock or shares (other than preferred stock or shares), with respect to the number of votes per share and the right to vote on the same general corporate decisions;

(G) For good cause after hearing as held in accord with rules and regulations adopted in accord with the Wyoming Administrative Procedure Act and W.S. 17-4-124 the secretary of state may suspend applicability of any exemption provided in this section.

(viii) Any security issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association;

(ix) Any commercial paper which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine (9) months of the date of issuance, exclusive of days of grace, or any renewal of such paper which is likewise limited, or any guarantee of such paper or of any such renewal;

(x) Any investment contract issued in connection with an employee stock purchase, savings, pension, profit sharing, or similar benefit plan if the administrator is notified in writing thirty (30) days before the inception of the plan or with respect to plans which are in effect on the effective date of this act, within sixty (60) days thereafter (or within thirty (30) days before they are reopened if they are closed on the effective date of this act);

(xi) Any security of an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 through 80a-64) provided:

(A) The issuer of an open-end management company that offers or sells shares in Wyoming files a notice to claim this exemption and pays an annual fee of one hundred dollars ($100.00) within sixty (60) days of the company's fiscal year end;

(B) The sponsor of a unit investment trust that sponsors a unit investment trust that offers or sells shares in Wyoming files a notice to claim this exemption and pays a fee of one hundred dollars ($100.00).

(xii) Any security of any cooperative incorporated or organized under law of this or another state and qualified with the secretary of state to do business in this state, subject to the following:

(A) No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this state; and

(B) The security is necessary or incidental to establishing membership in the cooperative association; and

(C) The security is nontransferable; or

(D) The administrator is notified in writing at least thirty (30) days before the security is offered for sale. Notice under this subparagraph shall contain the form of disclosure or prospectus and other sales literature to be used in the security offering together with financial statements in a form required by the administrator.

(b) The following transactions are exempted from W.S. 17-4-107 and 17-4-115:

(i) Any isolated nonissuer transaction, whether effected through a broker-dealer or not;

(ii) Any nonissuer distribution of an outstanding security if:

(A) A recognized securities manual contains the names of the issuer's officers and directors, a balance sheet of the issuer as of a date within eighteen (18) months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations; or

(B) The security has a fixed maturity or a fixed interest or dividend provision and there has been no default during the current fiscal year or within the three (3) preceding fiscal years, or during the existence of the issuer and any predecessors if less than three (3) years, in the payment of principal, interest, or dividends on the security.

(iii) Any nonissuer transaction effected by or through a registered broker-dealer pursuant to an unsolicited order or offer to buy; but the secretary of state may by rule require that the customer acknowledge upon a specified form that the sale was unsolicited, and that a signed copy of each such form be preserved by the broker-dealer for a specified period;

(iv) Any transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters;

(v) Any transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust, or by an agreement for the sale of real estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness secured thereby, is offered and sold as a unit;

(vi) Any transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator;

(vii) Any transaction executed by a bona fide pledgee without any purpose of evading this act;

(viii) Any offer or sale to a bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit sharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity;

(ix) Any transaction pursuant to an offer directed by the offeror to not more than fifteen (15) persons (other than those designated in paragraph (viii) of this subsection) in this state during any period of twelve (12) consecutive months, whether or not the offeror or any of the offerees is then present in this state, if (A) the seller reasonably believes that all the buyers in this state (other than those designated in paragraph (viii) of this subsection) are purchasing for investment and (B) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this state (other than those designated in paragraph (viii) of this subsection); but, upon application of the offeror and payment of a filing fee of two hundred dollars ($200.00), the secretary of state may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, or increase or decrease the number of offerees permitted, or waive the conditions in clauses (A) and (B) with or without the substitution of a limitation on remuneration;

(x) Any offer or sale of a preorganization certificate or subscription if (A) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective subscriber, (B) the number of subscribers does not exceed fifteen (15) and (C) no payment is made by any subscriber;

(xi) Any transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than ninety (90) days of their issuance, if (A) 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, or (B) the issuer first files a notice specifying the terms of the offer and the secretary of state does not by order disallow the exemption within the next five (5) full business days;

(xii) Any offer (but not a sale) of a security for which registration statements have been filed under both this act and the Securities Act of 1933 if no stop order or refusal is in effect and no public proceeding or examination looking toward such an order is pending under either act;

(xiii) Any offer (but not a sale) of a security made by or on behalf of an issuer for the sole purpose of soliciting an indication of interest in receiving a prospectus or its equivalent for the security pursuant to rules promulgated by the secretary of state; or

(xiv) Any offer (but not a sale) of a security made on or through the Internet, the World Wide Web or a similar proprietary or common carrier electronic system, provided:

(A) The offer indicates, directly or indirectly, that the security is not being offered to residents of Wyoming;

(B) The offer is not specifically directed to any person in Wyoming by, or on behalf of, the issuer of the security; and

(C) No sales of the issuer's security are made in Wyoming as a result of the offer until such time as the security being offered has been registered under this chapter and a final prospectus or form U-7 is delivered to the offeree prior to such sale.

(xv) An offer or sale of a security effected by a person excluded from the definition of broker-dealer under W.S. 17-4-113(a)(iii)(E).

(c) The secretary of state may by order deny or revoke any exemption specified in paragraph (ix) or (x) of subsection (a) or in subsection (b) of this section with respect to a specific security or transaction. No such order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findings of fact and conclusions of law, except that the secretary of state may by order summarily deny or revoke any of the specified exemptions pending final determination of any proceeding under this subsection. Upon the entry of a summary order, the secretary of state shall promptly notify all interested parties that it has been entered and of the reasons therefor and that within fifteen (15) days of the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the administrator, the order will remain in effect until it is modified or vacated by the secretary of state. If a hearing is requested or ordered, the secretary of state after notice of and opportunity for hearing to all interested persons may modify or vacate the order or extend it until final determination. No order under this subsection may operate retroactively. No person may be considered to have violated W.S. 17-4-107 or 17-4-115 by reason of any offer or sale effected after the entry of an order under this subsection if he sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the order.

(d) In any proceeding under this act, the burden of proving an exemption or an exception from a definition is upon the person claiming it.