551.202(26)(e)(e) Except as provided in sub. (26m), the offering under this subsection is made exclusively through one or more Internet sites and each Internet site is registered with the division under s. 551.205 (1) (b). 551.202(26)(f)(f) Not less than 10 days prior to the commencement of an offering of securities in reliance on the exemption under this subsection, the issuer files a notice with the administrator, in writing or in electronic form as prescribed by the administrator, which the administrator shall make available as an electronic document on the department of financial institutions Internet site, containing all of the following: 551.202(26)(f)1.1. A notice of claim of exemption from registration, specifying that the issuer will be conducting an offering in reliance on the exemption under this subsection, accompanied by the filing fee specified in s. 551.614 (1m). 551.202(26)(f)2.2. A copy of the disclosure statement to be provided to prospective investors in connection with the offering, containing all of the following: 551.202(26)(f)2.a.a. A description of the company, its type of entity, the address and telephone number of its principal office, its history, its business plan, and the intended use of the offering proceeds, including any amounts to be paid, as compensation or otherwise, to any owner, executive officer, director, managing member, or other person occupying a similar status or performing similar functions on behalf of the issuer. 551.202(26)(f)2.b.b. The identity of all persons owning more than 10 percent of the ownership interests of any class of securities of the company. 551.202(26)(f)2.c.c. The identity of the executive officers, directors, managing members, and other persons occupying a similar status or performing similar functions in the name of and on behalf of the issuer, including their titles and their prior experience. 551.202(26)(f)2.d.d. The terms and conditions of the securities being offered and of any outstanding securities of the company; the minimum and maximum amount of securities being offered, if any; either the percentage ownership of the company represented by the offered securities or the valuation of the company implied by the price of the offered securities; the price per share, unit, or interest of the securities being offered; any restrictions on transfer of the securities being offered; and a disclosure of any anticipated future issuance of securities that might dilute the value of securities being offered. 551.202(26)(f)2.e.e. The identity of any person who has been or will be retained by the issuer to assist the issuer in conducting the offering and sale of the securities, including any Internet site operator but excluding persons acting solely as accountants or attorneys and employees whose primary job responsibilities involve the operating business of the issuer rather than assisting the issuer in raising capital. 551.202(26)(f)2.f.f. For each person identified as required under subd. 2. e., a description of the consideration being paid to the person for such assistance. 551.202(26)(f)2.g.g. A description of any litigation, legal proceedings, or pending regulatory action involving the company or its management. 551.202(26)(f)2.h.h. The names and addresses, including the Uniform Resource Locator, of each Internet site that will be used by the issuer to offer or sell securities under this subsection. 551.202(26)(f)2.i.i. Any additional information material to the offering, including, if appropriate, a discussion of significant factors that make the offering speculative or risky. This discussion shall be concise and organized logically and may not be limited to risks that could apply to any issuer or any offering. 551.202(26)(f)3.3. An escrow agreement with a bank, savings bank, savings and loan association, or credit union authorized to do business in this state in which the investor funds will be deposited, providing that all offering proceeds will be released to the issuer only when the aggregate capital raised from all investors is equal to or greater than the minimum target offering amount specified in the business plan as necessary to implement the business plan and that all investors may cancel their commitments to invest if that target offering amount is not raised by the time stated in the disclosure document. 551.202(26)(g)(g) The issuer is not, either before or as a result of the offering, an investment company, as defined in section 3 of the Investment Company Act of 1940 (15 USC 80a-3), or an entity that would be an investment company but for the exclusions provided in section 3 (c) of the Investment Company Act of 1940 (15 USC 80a-3 (c)), or subject to the reporting requirements of section 13 or 15 (d) of the Securities Exchange Act of 1934 (15 USC 78m or 78o (d)). 551.202(26)(h)(h) The issuer informs all prospective purchasers of securities offered under this subsection that the securities have not been registered under federal or state securities law and that the securities are subject to limitations on resale. The issuer shall display the following legend conspicuously on the cover page of the disclosure document: IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR DIVISION OR OTHER REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY SUBSECTION (e) OF SEC RULE 147A (17 CFR 230.147A (e)) AS PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. 551.202(26)(i)(i) The issuer requires each purchaser to certify in writing or electronically as follows: I UNDERSTAND AND ACKNOWLEDGE THAT:
I am investing in a high-risk, speculative business venture. I may lose all of my investment, or under some circumstances more than my investment, and I can afford this loss.
This offering has not been reviewed or approved by any state or federal securities commission or division or other regulatory authority and that no such person or authority has confirmed the accuracy or determined the adequacy of any disclosure made to me relating to this offering.
The securities I am acquiring in this offering are illiquid, that there is no ready market for the sale of such securities, that it may be difficult or impossible for me to sell or otherwise dispose of this investment, and that, accordingly, I may be required to hold this investment indefinitely.
I may be subject to tax on my share of the taxable income and losses of the company, whether or not I have sold or otherwise disposed of my investment or received any dividends or other distributions from the company.
.... (Signature)
551.202(26)(j)(j) The issuer obtains from each purchaser of a security offered under this subsection evidence that the purchaser is a resident of this state and, if applicable, is an accredited investor or certified investor. 551.202(26)(k)(k) All payments for purchase of securities offered under this subsection are directed to and held by the financial institution specified in par. (f) 3. The bank or depository institution shall notify the administrator of the receipt of payments for securities. This information shall be confidential as provided in s. 551.607 (2) (g). 551.202(26)(L)(L) The issuer of securities offered under this subsection provides a copy of the disclosure document provided to the administrator under par. (f) 2. to each prospective investor at the time the offer of securities is made to the prospective investor. 551.202(26)(m)(m) No offer or sale of a different class or series of security has been made by the issuer in reliance on the exemption under this subsection or sub. (27) during the immediately preceding 12-month period. 551.202(26)(n)(n) If the offer or sale of the security had been undertaken under an exemption specified in Rule 506 (a) to (c) adopted under the Securities Act of 1933 (17 CFR 230.506 (a) to (c)), the transaction would not have been disqualified from the exemption under Rule 506 (d) adopted under the Securities Act of 1933 (17 CFR 230.506 (d)), except that the administrator may waive the requirement under this paragraph and authorize transactions in reliance on the exemption under this subsection notwithstanding the condition specified in this paragraph. 551.202(26m)(a)(a) An offer to sell, but not a sale, of a security by an issuer if, subject to par. (b), the offer is conducted in accordance with all of the following requirements: 551.202(26m)(a)1.1. The offer contains information required in the solicitation of interest form prescribed by the division and is made by or on behalf of the issuer by means of a newspaper publication, scripted media broadcast, Internet posting, or delivery of notices to be published or other documents, for the sole purpose of soliciting an indication of interest from prospective purchasers in receiving a prospectus, private placement memorandum, or equivalent disclosure document for the security. 551.202(26m)(a)2.2. The issuer intends that sales of the security be made pursuant to the exemption under sub. (26). 551.202(26m)(a)3.3. Prior to the initial solicitation of interest made under this subsection, the offeror files with the division a completed solicitation of interest form, as prescribed by the division, together with any other materials to be used to conduct solicitations of interest, including the script of any broadcast to be made, any information to be posted on the Internet, and a copy of any notice to be published. Any amendments to the solicitation of interest form or to any related materials used to conduct solicitations shall be filed with the division not later than the date of their first use. Any written or posted document under this subdivision may include a coupon, or digital form, returnable to the issuer indicating interest in a potential offering and revealing the name, address, electronic mail address, and telephone number of the prospective purchaser. 551.202(26m)(a)4.4. The text of any published notice or script for broadcast, any information to be posted on the Internet, and any printed material delivered in any solicitation of interest under this subsection begins with the disclosures and information required in, and in the format of, the solicitation of interest form prescribed by the division. 551.202(26m)(a)5.5. The offeror does not know, and in the exercise of reasonable care could not know, that any of the issuer’s officers, directors, general partners, controlling persons, or affiliates are or would be disqualified from use of the registration exemption under this subsection. 551.202(26m)(a)6.6. No solicitation of interest pursuant to this subsection is made after the filing of materials required for the exemption under sub. (26). 551.202(26m)(a)7.7. No sales of the securities that are the subject of solicitations of interest under this subsection are made until 20 calendar days after the last delivery of a solicitation of interest document, scripted media broadcast, Internet post, or other media publication. For purposes of this subdivision, the last delivery date for solicitations of interest by means of the Internet is the last day on which a digital form is available for a prospective purchaser’s response indicating interest. 551.202(26m)(a)8.8. During the solicitation of interest period, neither the issuer nor any person acting on its behalf accepts or solicits money, subscriptions, or commitments to purchase securities. 551.202(26m)(b)(b) A failure to comply with any of the requirements for exemption under par. (a) does not result in the loss of the exemption under this subsection for any offer to a particular person if the offeror demonstrates that all of the following apply: 551.202(26m)(b)1.1. The failure to comply did not pertain to a requirement directly intended to protect that particular person. 551.202(26m)(b)2.2. The failure to comply was insignificant with respect to the offering as a whole. 551.202(26m)(b)3.3. A good faith and reasonable attempt was made to comply with all requirements under par. (a). 551.202(27)(27) An offer or sale of a security by an issuer if the offer or sale is conducted in accordance with all of the following requirements: 551.202(27)(a)(a) The issuer of the security is a business entity with a principal place of business in this state and that is doing business in this state. 551.202(27)(b)(b) The transaction meets the requirements of the federal exemption for intrastate offerings in section 3 (a) (11) of the Securities Act of 1933 (15 USC 77c (a) (11)) and Rule 147A adopted under the Securities Act of 1933 (17 CFR 230.147A). 551.202(27)(c)1.1. Except as provided in subd. 2., the sum of all cash and other consideration to be received for all sales of the security in reliance on the exemption under this subsection, excluding sales to any accredited investor, certified investor, or institutional investor, does not exceed the following amount: 551.202(27)(c)1.a.a. If the issuer has not undergone and made available to each prospective investor and the administrator the documentation resulting from a financial audit of its most recently completed fiscal year which complies with generally accepted accounting principles, $1,000,000 subject to adjustment under s. 551.206, less the aggregate amount received for all sales of securities by the issuer within the 12 months before the first offer or sale made in reliance on the exemption under this subsection. 551.202(27)(c)1.b.b. If the issuer has undergone and made available to each prospective investor and the administrator the documentation resulting from a financial audit of its most recently completed fiscal year which complies with generally accepted accounting principles, $2,000,000 subject to adjustment under s. 551.206, less the aggregate amount received for all sales of securities by the issuer within the 12 months before the first offer or sale made in reliance on the exemption under this subsection. 551.202(27)(c)2.2. An offer or sale to an officer, director, partner, trustee, or individual occupying similar status or performing similar functions with respect to the issuer or to a person owning 10 percent or more of the outstanding shares of any class or classes of securities of the issuer does not count toward the monetary limitation in subd. 1. a. and b. 551.202(27)(d)(d) The issuer does not accept more than $10,000 from any single purchaser unless the purchaser is an accredited investor or certified investor. 551.202(27)(e)(e) No commission or other remuneration is paid or given, directly or indirectly, for any person’s participation in the offer or sale of securities for the issuer unless the person is registered as a broker-dealer or agent under this chapter. This paragraph does not apply if the offer or sale of the security is to a certified investor. 551.202(27)(f)(f) No general solicitation or general advertising is made in connection with the offer to sell or sale of the securities unless it has been permitted by the administrator. 551.202(27)(g)(g) All funds received from investors are deposited into a bank, savings bank, savings and loan association, or credit union authorized to do business in this state, and all the funds are used in accordance with representations made to investors. 551.202(27)(h)(h) Before the 101st offer of the security, the issuer provides a notice to the administrator in writing or in electronic form, accompanied by the filing fee specified in s. 551.614 (1m). The administrator shall prescribe the form required for the notice and make the form available as an electronic document on the department of financial institutions Internet site. Notwithstanding s. 551.204 (1) and (3), the notice shall be limited to all of the following: 551.202(27)(h)1.1. Stating that the issuer is conducting an offering in reliance on the exemption under this subsection. 551.202(27)(h)2.2. Identifying the names and addresses of all of the following persons: 551.202(27)(h)2.b.b. All persons who will be involved in the offer or sale of securities on behalf of the issuer. 551.202(27)(h)2.c.c. The bank, savings bank, savings and loan association, or credit union in which investor funds will be deposited. 551.202(27)(i)(i) The issuer is not, either before or as a result of the offering, an investment company, as defined in section 3 of the Investment Company Act of 1940 (15 USC 80a-3), or subject to the reporting requirements of section 13 or 15 (d) of the Securities Exchange Act of 1934 (15 USC 78m or 78o (d)). 551.202(27)(j)(j) The issuer informs all purchasers that the securities have not been registered under this chapter and makes the disclosures required under subsection (f) of Rule 147A adopted under the Securities Act of 1933 (17 CFR 230.147A (f)). 551.202(27)(k)(k) No offer or sale of a different class or series of security has been made by the issuer in reliance on the exemption under this subsection or sub. (26) during the immediately preceding 12-month period. 551.202(27)(L)(L) If the offer or sale of the security had been undertaken under an exemption specified in Rule 506 (a) to (c) adopted under the Securities Act of 1933 (17 CFR 230.506 (a) to (c)), the transaction would not have been disqualified from the exemption under Rule 506 (d) adopted under the Securities Act of 1933 (17 CFR 230.506 (d)), except that the administrator may waive the requirement under this paragraph and authorize transactions in reliance on the exemption under this subsection notwithstanding the condition specified in this paragraph. 551.202 AnnotationWhen a certificate of stock was mailed to the plaintiff in Wisconsin, and extensive solicitation was conducted by the defendants in Wisconsin, there was an “offer” within former s. 551.02 (11) (b), 1969 stats. Since the securities were neither registered in Wisconsin nor exempt from registration, the plaintiff was entitled to rescind the transaction and recover the purchase price of the securities, plus costs. Hardtke v. Love Tree Corp., 386 F. Supp. 1085 (1975). 551.202 AnnotationRegistration and reporting requirements for exempt transactions are discussed. Feitler v. Midas Associates, 418 F. Supp. 735 (1976). 551.202 NoteNOTE: The above annotations refer to ch. 551 as it existed prior to its repeal and recreation by 2007 Wis. Act 196. 551.202 AnnotationTo Fund or Not to Fund: Deficiencies in the Wisconsin Crowdfunding Act that Hamper the Viability of Intrastate Crowdfunding. Hovestol. 100 MLR 1063 (2017).
551.203551.203 Additional exemptions and waivers. A rule adopted or order issued under this chapter may exempt a security, transaction, or offer; a rule under this chapter may exempt a class of securities, transactions, or offers from any or all of the requirements of ss. 551.301 to 551.306 and 551.504; and an order under this chapter may waive, in whole or in part, any or all of the conditions for an exemption or offer under ss. 551.201 and 551.202. 551.203 HistoryHistory: 2007 a. 196. 551.204551.204 Denial, suspension, revocation, condition, or limitation of exemptions; burden of proof; additional information. 551.204(1)(1) Enforcement related powers. Except with respect to a federal covered security or a transaction involving a federal covered security, an order under this chapter may deny, suspend application of, condition, limit, or revoke an exemption created under s. 551.201 or 551.202 or an exemption or waiver created under s. 551.203 with respect to a specific security, transaction, or offer, except to the extent limited by the National Securities Markets Improvement Act of 1996. An order under this section may be issued only pursuant to the procedures in s. 551.306 (4) or s. 551.604 and only prospectively. 551.204(2)(2) Knowledge of order required. A person does not violate s. 551.301, 551.303 to 551.306, 551.504, or 551.511 by an offer to sell, offer to purchase, sale, or purchase effected after the entry of an order issued under this section if the person did not know, and in the exercise of reasonable care could not have known, of the order. 551.204(3)(3) Additional information required. With respect to an exemption under s. 551.201 or 551.202 that is perfected if a notice or other information is filed with the division of securities and the division does not disallow the exemption within a specified period after the filing, the division may, within 10 days after the filing date of the notice or other information, require that additional information reasonably related to the offering be filed. If the division requires additional information, the date by which the division may disallow the exemption is 10 days after the date of filing that information. 551.204 HistoryHistory: 2007 a. 196. 551.205551.205 Additional provisions related to crowdfunding exemption for intrastate offerings through Internet sites. 551.205(1)(1) All of the following requirements apply to an offer or sale of securities pursuant to the exemption under s. 551.202 (26): 551.205(1)(a)(a) Prior to any offer or sale of securities, the issuer shall provide to the Internet site operator evidence that the issuer has a principal place of business in this state and is doing business in this state. 551.205(1)(b)1.1. The Internet site operator shall register with the division by filing a statement, which the administrator shall make available as an electronic document on the department of financial institutions Internet site, accompanied by the filing fee specified in s. 551.614 (1m), that includes all of the following: 551.205(1)(b)1.a.a. That the Internet site operator is a business entity organized under the laws of this state and authorized to do business in this state. 551.205(1)(b)1.c.c. The identity and location of, and contact information for, the Internet site operator. 551.205(1)(b)1.d.d. Except as provided in subds. 2. and 4., that the Internet site operator is registered as a broker-dealer under s. 551.401. 551.205(1)(b)2.2. The Internet site operator is not required to register as a broker-dealer under s. 551.401 if all of the following apply with respect to the Internet site and its operator: 551.205(1)(b)2.b.b. It does not solicit purchases, sales, or offers to buy the securities offered or displayed on the Internet site.
