FILING A SMALL CORPORATE OFFERING REGISTRATION (SCOR)

Filling out the SCOR Form (Form U-7) can present difficulty without an idea of how to proceed. Before beginning the SCOR Form, the State securities examiners suggest you consider the following guidelines:

1. Familiarize yourself with the securities laws of Florida. Obtain a copy for your use of the appropriate Statutes and Administrative Code Rules.
    

2. Read the General Instructions of the SCOR Form. Understanding these General Instructions is helpful before you address the specific instructions and discussions under each question.
   
   

3. Review the entire SCOR Form before answering any question. Think about what each question is asking. This will help you decide on the appropriate location for the company's disclosures.
   
   

4. Determine whether the SCOR Form will be adequate for the types of disclosures the company must make. The SCOR Form does not have questions that cover certain types of businesses and business activities. Issuers with complex capital structures or subsidiaries, portfolio companies such as real estate investment trusts, financial companies and mortgage pools and cooperatives, may not find the SCOR Form suitable. If the questions in the SCOR Form do not cover all the important areas of disclosure, the Form should not be used.
    

5. Focus the company's disclosures on the use of the money to be raised and the period of time over which the money will be expended. Concentrate on the most important aspects of the Company's product and development. Discussions that project many years into the future are too speculative and divorced from the realities of small business.
    

6. Write about the risk factors of the offering only after you have completed all other sections of the Form. Question 2 of the SCOR Form requires the Company to list in order of importance, the major risks to the investor. The Company can best determine the priority of the risk factors after the Company finishes the disclosure in the rest of the Form.
    

7. Be as brief as possible in answering the questions. The challenge in filling out the SCOR Form is to disclose all material facts about the Company's offering in the shortest, most readable and most understandable way. Brevity, however, does not excuse failure to make full disclosure. If further discussion is required on any question, the SCOR Form should be expanded to accommodate this. Disclosure can always be made in Question 45 when no other place can be found.
    

8. Avoid hype; stick to the facts. Knowledgeable investors will always be looking for the essential features of the Company's business plan. Avoid the use of technical jargon that will not be understood by investors or examiners. If a technical term must be used, define or explain it in the context of the answer. Plain and straight forward discussions will be best received.
    

9. Answer each of the questions. If the question is inapplicable, so indicate. The SCOR Form encourages cross-referencing disclosure sections. The Company should not, however, refer to other sections or documents such as a business plan, rather than answering the question.
    

10. Prepare a worksheet showing the computations used to arrive at the ratios, percentages, and numerical responses to Questions 5, 6, 7(a), 8(a), 8(b), 17(a), 37, 38 and 41(a). The Department will require the worksheet to be filed as an exhibit to the application to register securities. Check your work against the Company's financial statements.
     

11. Obtain the assistance of an accountant and an attorney familiar with securities accounting and securities or corporate law. Although the Company's management may feel comfortable in completing the SCOR Form, several of the questions in the Form relate to legal, accounting or tax matters that require the review of a professional.
     

12. Include audited financial statements prepared in accordance with GAAP. If these statements are dated more than 90 days prior to the filing with the Department, also furnish an unaudited balance sheet, dated within that 90 day period, along with an oath of affirmation to the correctness of the balance sheet, signed by an authorized officer of the Company.
     

13. All sales of securities in Florida must be made by Dealers registered with the Department.
     

14. Do not file your application until you have a complete application and have consulted the appropriate Florida Statutes and Administrative Code Rules.