Section 45.56.120 - Exempt transactionsThe following transactions are exempt from the requirements of AS 45.56.100, 45.56.170 - 45.56.230, and 45.56.550:
(1) an isolated nonissuer transaction, whether effected by or through a broker-dealer, if the seller is not a promoter or controlling person; the administrator may define by regulation or order who is a promoter or a controlling person;(2) a nonissuer transaction by or through a broker-dealer registered, or exempt from registration under this chapter, and a resale transaction by a sponsor of a unit investment trust registered under 15 U.S.C. 80a-1- 80a-64 (Investment Company Act of 1940), in a security of a class that has been outstanding in the hands of the public for at least 90 days, if, at the date of the transaction, (A) the issuer of the security is engaged in business, the issuer is not in the organizational stage or in bankruptcy or receivership, and the issuer is not a blank check, blind pool, or shell company that does not have a specific business plan or purpose or has indicated that its primary business plan is to engage in a merger or combination of the business with or an acquisition of an unidentified person;(B) the security is sold at a price reasonably related to its current market price;(C) the security does not constitute the whole or part of an unsold allotment to or a subscription or participation by the broker-dealer as an underwriter of the security or a redistribution;(D) a nationally recognized securities manual or its electronic equivalent designated by a regulation adopted or order issued under this chapter or a record filed with the Securities and Exchange Commission that is publicly available contains (i) a description of the business and operations of the issuer;(ii) the names of the issuer's executive officers and the names of the issuer's directors, if any;(iii) an audited balance sheet of the issuer as of a date within 18 months before the date of the transaction or, in the case of a reorganization or merger when the parties to the reorganization or merger each had an audited balance sheet, a pro forma balance sheet for the combined organization; and(iv) an audited income statement for each of the issuer's two immediately previous fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the case of a reorganization or merger when each party to the reorganization or merger had audited income statements, a pro forma income statement; and(E) any one of the following requirements is met:(i) the issuer of the security has a class of equity securities listed on a national securities exchange registered under 15 U.S.C. 78f (Securities Exchange Act of 1934) or designated for trading on the National Association of Securities Dealers Automated Quotation System;(ii) the issuer of the security is a unit investment trust registered under 15 U.S.C. 80a-1- 80a-64 (Investment Company Act of 1940);(iii) the issuer of the security, including its predecessors, has been engaged in continuous business for at least three years; or(iv) the issuer of the security has total assets of at least $2,000,000 based on an audited balance sheet as of a date within 18 months before the date of the transaction or, in the case of a reorganization or merger when the parties to the reorganization or merger each had an audited balance sheet, a pro forma balance sheet for the combined organization;(3) a nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter in a security of a foreign issuer that is a margin security defined in regulations or rules adopted by the Board of Governors of the Federal Reserve System;(4) a nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter in an outstanding security if the guarantor of the security files reports with the Securities and Exchange Commission under the reporting requirements of 15 U.S.C. 78m or 15 U.S.C. 78o (Securities Exchange Act of 1934);(5) a nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter in a security that (A) is rated at the time of the transaction by a nationally recognized statistical rating organization as identified by regulations of the administrator in one of its four highest rating categories; or(B) has a fixed maturity or a fixed interest or dividend, if(i) a default has not occurred during the current fiscal year or within the three previous fiscal years or, if the issuer has been in business less than three fiscal years, during the existence of the issuer and any predecessor in the payment of principal, interest, or dividends on the security; and(ii) the issuer is engaged in business, is not in the organizational stage or in bankruptcy or receivership, and is not and has not, within the previous 12 months, been a blank check, blind pool, or shell company that does not have a specific business plan or purpose or has indicated that its primary business plan is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person;(6) a nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter effecting an unsolicited order or offer to purchase;(7) a nonissuer transaction executed by a bona fide pledgee without the purpose of evading this chapter;(8) a nonissuer transaction by a federal covered investment adviser with investments under management in excess of $100,000,000 acting in the exercise of discretionary authority in a signed record for the account of others;(9) a transaction in a security, whether or not the security or transaction is otherwise exempt, in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in exchange for one or more bona fide outstanding securities, claims, or property interests and partly for cash if the terms and conditions of the issuance and exchange or the delivery and exchange and the fairness of the terms and conditions have been approved by the administrator after a hearing;(10) a transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters;(11) a 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 (A) the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidence of indebtedness, secured under those documents, is offered and sold as a unit;(B) a general solicitation or general advertisement of the transaction is not made; and(C) a commission or other remuneration is not paid or given, directly or indirectly, to a person not registered under this chapter as a broker-dealer or as an agent;(12) a transaction by an executor, administrator of an estate, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator;(13) a sale or offer to sell to(A) an institutional investor;(B) a federal covered investment adviser; or(C) any other person exempted by a regulation adopted or order issued under this chapter;(14) a sale or offer to sell securities by or on behalf of an issuer if the transaction is part of a single issue in which(A) not more than 25 purchasers in this state during any 12 consecutive months, other than a person designated in (13) of this section, regardless of whether the seller or any of the buyers is then present in this state;(B) a general solicitation or general advertising is not made in connection with the sale of or offer to sell the securities;(C) a commission or other remuneration is not paid or given, directly or indirectly, to a person other than a broker-dealer registered under this chapter or an agent registered under this chapter for soliciting a prospective purchaser in this state;(D) the issuer reasonably believes that all the purchasers in this state, other than those designated in (13) of this section, are purchasing for investment and not with a view to distribution;(E) a legend is placed on the certificate or other document evidencing ownership of the security, and the legend states that the security is not registered under this chapter and cannot be resold without registration under this chapter or exemption from this chapter; and(F) before a sale, each prospective buyer is furnished with information that is sufficient to make an informed investment decision; the information shall be furnished to the administrator upon request; in this subparagraph, "information that is sufficient to make an informed investment decision" includes a business plan, an income and expense statement, a balance sheet, a statement of risks, and a disclosure of any significant negative factors that may affect the outcome of the investment;(15) a transaction under an offer to existing security holders of the issuer, including persons that, at the date of the transaction, are holders of convertible securities, options, or warrants, if a commission or other remuneration, other than a standby commission, is not paid or given, directly or indirectly, for soliciting a security holder in this state;(16) an offer to sell, but not a sale of, a security not exempt from registration under 15 U.S.C. 77a- 77aa (Securities Act of 1933) if (A) a registration, offering statement, or similar record as required under 15 U.S.C. 77a- 77aa (Securities Act of 1933) has been filed but is not effective, or the offer is made in compliance with 17 C.F.R. 230.165, adopted under 15 U.S.C. 77a- 77aa (Securities Act of 1933); and(B) a stop order of which the offeror is aware has not been issued against the offeror by the administrator or the Securities and Exchange Commission, and an audit, inspection, or proceeding that is public and that may culminate in a stop order is not known by the offeror to be pending;(17) an offer to sell, but not a sale of, a security exempt from registration under 15 U.S.C. 77a- 77aa (Securities Act of 1933) if (A) a registration statement has been filed under this chapter but is not effective;(B) a solicitation of interest is provided in a record to offerees in compliance with a regulation adopted by the administrator under this chapter; and(C) a stop order of which the offeror is aware has not been issued by the administrator under this chapter, and an audit, inspection, or proceeding that may culminate in a stop order is not known by the offeror to be pending;(18) a transaction involving the distribution of the securities of an issuer to the security holders of another person in connection with a merger, consolidation, exchange of securities, sale of assets, or other reorganization to which the issuer, or its parent or subsidiary, and the other person, or its parent or subsidiary, are parties;(19) a rescission offer, sale, or purchase under AS 45.56.720;(20) an offer to sell or sale of a security to a person not a resident of this state and not present in this state if the offer or sale does not constitute a violation of the laws of this state or foreign jurisdiction in which the offeree or purchaser is present and is not part of an unlawful plan or scheme to evade this chapter;(21) employees' stock purchase, savings, option, profit-sharing, pension, or similar benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, the issuer's parent, the issuer's majority-owned subsidiary, or the majority-owned subsidiary of the issuer's parent for the participation of their employees, including offers to sell or sales of the securities to (A) directors; general partners; managers and members, if the issuer is a limited liability company; trustees, if the issuer is a business trust; officers; consultants; and advisors;(B) family members who acquire the securities from those persons through gifts or domestic relations orders;(C) former employees, directors, general partners, trustees, officers, consultants, limited liability managers or members, and advisors if those individuals were employed by or providing services to the issuer when the securities were offered; and(D) insurance agents who are exclusive insurance agents of the issuer or the issuer's subsidiary or parent or who derive more than 50 percent of their annual income from those organizations;(22) a transaction involving(A) a stock dividend or equivalent equity distribution, regardless of whether the corporation or other business organization distributing the dividend or equivalent equity distribution is the issuer, if nothing of value is given by stockholders or other equity holders for the dividend or equivalent equity distribution other than the surrender of a right to a cash or property dividend if each stockholder or other equity holder may elect to take the dividend or equivalent equity distribution in cash, property, or stock;(B) a transaction incident to a right of conversion or judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims, or property interests, or partly in exchange for one or more outstanding securities, claims, or property interests and partly for cash; or(C) the solicitation of tenders of securities by an offeror in a tender offer in compliance with 17 C.F.R. 230.162, adopted under 15 U.S.C. 77a- 77aa (Securities Act of 1933);(23) a nonissuer transaction in an outstanding security by or through a broker-dealer registered or exempt from registration under this chapter, if the issuer is a reporting issuer in a foreign jurisdiction designated by this paragraph or by a regulation adopted or order issued under this chapter; the issuer has been subject to continuous reporting requirements in the foreign jurisdiction for not less than 180 days before the transaction; and the security is listed on the foreign jurisdiction's securities exchange that has been designated by this paragraph or by a regulation adopted or order issued under this chapter, or is a security of the same issuer that is of senior or substantially equal rank to the listed security or is a warrant or right to purchase or subscribe to any of the foregoing; for purposes of this paragraph, Canada, together with its provinces and territories, is a designated foreign jurisdiction, and TSX, Inc., formerly known as the Toronto Stock Exchange, Inc., is a designated securities exchange; after an administrative hearing in compliance with AS 45.56.690(c), the administrator, by a regulation adopted or order issued under this chapter, may revoke the designation of a securities exchange under this paragraph if the administrator finds that revocation is necessary or appropriate in the public interest and for the protection of investors;(24) sales by an issuer to the buyer of an enterprise or a business and the assets and liabilities of the enterprise or business if(A) the transfer of stock to the buyer is solely incidental to the sale of the enterprise or business and its assets and liabilities;(B) the seller provides the buyer with full access to the books and records of the enterprise or business; and(C) a legend is placed on the certificate or other document evidencing ownership of the security, stating that the security is not registered under this chapter and cannot be resold without registration under this chapter or exemption from it;(25) offers or sales of certificates of interest or participation in oil, gas, or mining rights, titles, or leases, or in payments out of production under the rights, titles, or leases, if the purchasers(A) are or have been, during the preceding two years, engaged primarily in the business of exploring for, mining, producing, or refining oil, gas, or minerals; or(B) have been found by the administrator upon written application to be substantially engaged in the business of exploring for, mining, producing, or refining oil, gas, or minerals so as not to require the protection provided by this chapter;(26) a transaction involving only family members, or involving only family members and the corporations, partnerships, limited liability companies, limited partnerships, limited liability partnerships, associations, joint-stock companies, or trusts that are organized, formed, or created by family members or at the direction of family members; in this paragraph, "family members" means persons who are related, including related by adoption, within the fourth degree of affinity or consanguinity; or(27) a transaction relating to a security that is not part of an initial issue of stock covered by AS 45.55.138, but that is issued by a corporation organized under Alaska law under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act), if the corporation qualifies for exempt status under 43 U.S.C. 1625(a).Added by SLA 2018, ch. 65,sec. 25, eff. 1/1/2019.