Expansion Order Application


Ala. Code § 8-6-11 (a) (9) OF THE ALABAMA SECURITIES ACT provides:

  1. Except as hereinafter in this section expressly provided, Ala. Code § 8-6-3 through 8-6-9 shall not apply to any of the following transactions:
    1. Any transaction which is part of an issue of which there are no more than 10 purchasers (other than those designated in subdivision (a) (8) of the section) wherever located, of securities from the issuer during any period of 12 consecutive months if:
      1. The issuer reasonably believes that all the buyers are purchasing for investment and not with a view to distribution, and such issuer exercises reasonable care to assure this investment intent, which reasonable care shall be presumed if the following conditions as satisfied:
        1. Reasonable inquiry to determine if the purchaser is acquiring the securities for himself or for other persons;
        2. Written disclosure to each purchaser prior to sale that the securities have not been registered under the act and, therefore, cannot be resold unless they are registered under the act or unless an exemption from registration is available;
        3. Placement of a legend on the certificate or other document that evidences the securities stating that the securities have not been registered under the act and setting forth or referring to the restrictions on transferability and sale of the securities; and
      2. No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer; and
      3. No public advertising or general solicitation is used in connection with the issue of which the transaction in reliance on this exemption is a part.

8-6-3 through 8-6-9 shall not apply to any offer made pursuant to this subdivision (a) (9) in which no sale results.

But the Securities Commission 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 decrease or increases the number of purchasers permitted, or waive the conditions in paragraphs a. and b. of this subdivision (9) with or without the substitution of a limitation on remuneration.

To apply for an expansion order under Ala. Code § 8-6-11 (a) (9); the applicant shall file with the Commission:

  1. $300.00 filing fee made payable to the Alabama Securities Commission by non-personal check or money order.  Ala. Code § 8-6-11 (c).
  2. Consent to Service of Process (Form U-2 and U-2(a), if applicable) appointing the Secretary of State, State of Alabama  Ala. Code § 8-6-12 (e) (1).
  3. One copy of all information to be furnished by the Issuer to the offerees. (This information should include a description of management personnel; a balance sheet of the Issuer and General Partner; a discussion of results of prior performance by the General Partner which is similar to this offering, if any; and any additional information necessary to an understanding of the business of the Issuer and this particular transaction.)
  4. A transmittal letter of application requesting an expansion order which shall include the following:
    1. The basis or reason for the requested expansion.
    2. The number of purchasers, with the Alabama purchasers separately stated.
    3. The sophistication of the purchasers.
    4. The purchaser’s knowledge of and/or affiliation with the proposed transaction and issuer.
    5. Any other information necessary to an understanding of the issuer and/or the transaction.

The application will be reviewed and the Issuer or his attorney contacted concerning the availability of the expansion Order.