Michigan Scor Instructions For Form U-7 - Small Company Offering Registration (Page 2 of 6) in pdf

subject to any state's administrative enforcement order or judgment which prohibits, denies, or revokes the use of any exemption from

registration in connection with the offer, purchase, or sale of securities; (v) is currently subject to any order, judgment, or decree of

any court of competent jurisdiction temporarily or preliminarily restricting or enjoining, or is subject to any order, judgment or decree of

any court of competent jurisdiction, permanently restraining or enjoining, such party from engaging in or continuing any conduct of

practice in connection with the purchase or sale of any security or involving the making of any false filing with the state entered within

five years prior to the filing of the application for registration hereunder; (vi) the prohibitions of paragraphs (i) - (iii) and (v) above shall

not apply if the person subject to the disqualification is duly licensed or registered to conduct securities related business in the state in

which the administrative order or judgment was entered against such person or if the broker-dealer employing such party is licensed

or registered in this state and the Form B-D filed with this state discloses the order, conviction, judgment, or decree relating to such

person. No person disqualified under this subsection may act in a capacity other than that for which the person is licensed or

registered; and (vii) any disqualification caused by this section is automatically waived if the state securities administrator or agency of

the state which created the basis for disqualification determines upon a showing of good cause that it is not necessary under the

circumstances that registration be denied.

If any of the circumstances in clauses (ii), (iii) or (v) of the preceding paragraph has occurred more than five years from the date of the

application for registration hereunder, these circumstances should be described in response to Question 45 as a Miscellaneous

Factor.

G. Use of the Form U-7 is available to any offering of securities by a Company, the aggregate offering price of which within or outside this

state shall not exceed $1,000,000.00, under the federal exemption under SEC Rule 504. The Form U-7 is not available to a Company

that is an investment company (including mutual funds) or is subject to the reporting requirements of Section 13 or Section 15(d) of

the Securities Exchange Act of 1934.

H. If the Company files with the SEC a Form D of Regulation D under the Securities Act of 1933 claiming exemption of the offering from

registration under such act pursuant to Rule 504, a copy of the Form D with appropriate state signature pages shall be filed with the

Bureau at the same time as filed with the SEC.

III. General Requirements for Use of Form

A. The Form U-7, when properly completed, signed and submitted, together with the exhibits schedule below and a Form U-1 (SCOR)

Uniform Application to Register Securities, constitutes an application for registration. A signed original of the Form should be filed,

together with an executed Form U-1 (SCOR) and a signed original of the consent to service of process. The form U-1 (SCOR) should

set forth the amount of securities being registered in Michigan and the method of calculating the filing fee, and there should be

enclosed a check for the amount of the filing fee made payable to the "State of Michigan". A SCOR registration becomes effective

when the Bureau so orders. The registration is effective for one year. Once registration is effective, the effective date should be

noted at the bottom of the cover page of Form U-7. Any changed or revised Disclosure Document must also be signed.

B. Each question in each paragraph of the Form U-7 should be responded to. If the question or series of questions is inapplicable, so

indicate. Each answer should be clearly and concisely stated and in the space provided; however, notwithstanding the specificity of

the questions, responses should not involve nominal, immaterial or insignificant information.

C. If the provided space is insufficient, additional space should be created by cutting and pasting to the Form U-7 to add more lines or by

putting the From U-7 on a word processor and adding more lines in this or a similar manner. Irrespective of which method is used,

care should be taken to assure that the Form U-7 is accurately and completely reproduced. Smaller type size should not be used,

and script or italic type styles should be avoided.

D. There must be submitted to the Office an opinion of an attorney licensed to practice in a state or territory of the United States that the

securities to be sold in the offering have been duly authorized and when issued upon payment of the offering price will be legally and

validly issued, fully paid and nonassessable and binding on the Company in accordance with their terms. In addition, such opinion

must state that the Company has met all of the requirements of the rule.

E. The Disclosure Document of Form U-7 constitutes the offering circular or prospectus and the Form U-7 once filled out, filed and

declared effective may be reproduced by the Company by copy machine or otherwise for dissemination to potential investors. (The

Company is cautioned to control the copying and distribution to preclude inaccurate or unreadable copies from being used and to

prevent other unauthorized uses for which the Company may nevertheless be deemed responsible.) These Instructions are not part

of the Disclosure Document and should not be included. Reproduced copies should be on white paper and should be stapled or

secured in the left margin without a cover of any type.

F. The Company should expect that the Office may have comments and questions concerning the answers set forth on the Form U-7 and

that changes may be required to be made to the answers before the registration is declared effective. Comments and questions may

either be included in a letter or made by telephone communication initiated by the Bureau in response to the filing.

Page 2 of 6

Michigan Scor Instructions For Form U-7 - Small Company Offering Registration Page 2

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