Michigan Scor Instructions For Form U-7 - Small Company Offering Registration (Page 3 of 6) in pdf

G. No offers or sales may be made in this state until the Office has declared the registration effective. To make offers or sales before the

registration is effective could lead to a stop order or other proceeding which would preclude use of the Form U-7 in this or any other

state and could give rise to a right of rescission by investors enforceable against management, principal stockholders and the selling

agents as well as the Company. When the registration has been declared effective in this state, offers and sales may be made in this

state even though registration in other states has not been declared effective. This Disclosure Document must be delivered to each

investor before any offer or sale is made, e.g. (a) before any order is entered; (b) any subscription agreement is signed; or (c) any part

of the purchase price is received. The registration statement will be effective only for the same time period specified in the order of

the Office, however, no registration statement shall remain effective for a period greater than one year.

H. After the registration has been declared effective, and while the offering is still in progress, if any portion of the Form U-7 should need

to be changed or revised because of a material event concerning the Company or the offering to make it accurate and complete, it

shall be so changed, revised, or supplemented. If changed, revised or supplemented (including an addition on the cover page of

another state in which the offering has been registered) the Form U-7 as so changed, revised or supplemented, clearly marked to

show changes from the previously filed version, should be filed and cleared with the Office before use. If any of the changes or

revisions are of such significance that they are material to the making of an investment decision by an investor, and if the minimum

proceeds have not been revised, after filing with and clearance by the Office, the Disclosure Document on this Form U-7 as so

changed, revised or supplemented should be recirculated to persons in this state that have previously subscribed, and they should be

given the opportunity to rescind or reconfirm their investment.

I. Options, warrants and similar rights to purchase securities constitute a continuous offering of the underlying securities during the

exercise period and require the securities to be registered and the Disclosure Document on the Form U-7 to be kept continuously

current throughout the exercise period through the use of the above amendment procedure or by means of a supplement, as

appropriate. Upon any change, revision or supplement to the Disclosure Document, a copy must be promptly furnished to the holders

of options, warrants and similar rights.

J. Any and all supplemental selling literature or advertisements announcing the offering should be filed by the Company and cleared with

the Office prior to publication or circulation within the state. An announcement should not be a sales motivation device and should

normally contain no more than the following: (1) the name of the Company, (2) characterization of the Company as indicated on the

Cover Page of the Disclosure Document, (3) address and telephone number of the company, (4) a brief indication in ten words or less

of the Company's business or proposed business, (5) the number and type of securities offered and the offering price per security, (6)

the name, address and telephone number of any selling agent authorized to sell the securities, (7) a statement that the

announcement does not constitute an offer to sell or solicitation of an offer to purchase and that any such offer must be made by an

official Disclosure Document, (8) how a copy of the Disclosure Document may be obtained, and (9) the Company's corporate logo.

Clip and return coupons requesting a copy of the Disclosure Document are permitted in printed announcements. (For example, an

announcement in "tombstone" format with a black-lined border and using the following language would ordinarily be acceptable:

"50,000 shares, common stock; $5 per share; (Logo) XYZ Corporation, a development stage database computer software company

now conducting operations; Midtown, Michigan; Selling agent: ABC Securities, 1234 Main Street, Midtown, Michigan (517) 123-4567;

This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities, which offer may be made

only by means of an official Disclosure Document; A copy of the Disclosure Document may be obtained by contacting the selling

agent at the above address and telephone number." Similarly, a classified advertisement using the following language would

ordinarily be acceptable: "Common stock of XYZ Corporation, a development stage database computer software company now

conducting operations, Midtown, Michigan. Price $5 per share. Total offering 50,000 shares. This announcement does not constitute

an offer to sell or the solicitation of an offer to buy the securities, which offer may be made only by means of an official Disclosure

Document. A copy of the Disclosure Document may be obtained by contacting the Company, Industrial Park, Suite 12B, 456 Mill

Road, Midtown, Michigan (517) 321-4321.")

The issuance of any but routine press releases or the granting of interviews to news media during, or at about the same time of, an

offering could constitute indirect advertising, which if not precleared with the Office would be prohibited. Any unusual news article or

news program featuring the Company during this period, particularly if present or future earnings, or the pending offering, are

mentioned, could delay or cause suspension of the effectiveness of the registration and disrupt the offering. Consequently any such

news article or news program, no matter by whom it may be initiated, should generally be discouraged during this period.

Page 3 of 6

Michigan Scor Instructions For Form U-7 - Small Company Offering Registration Page 3

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