(a) Except as provided in (b) and (c) of this section, a merger and acquisition broker is exempt from registration under AS 45.56.300.
(b) A merger and acquisition broker is not exempt from registration under AS 45.56.300 if the broker
(1) directly or indirectly, in connection with the transfer of ownership of an eligible privately held company, receives, holds, transmits, or has custody of the funds or securities to be exchanged by the parties to the transaction;
(2) engages on behalf of an issuer in a public offering of any class of securities that is registered, or is required to be registered, with the Securities and Exchange Commission under 15 U.S.C. 78l(b) (Securities Exchange Act of 1934) or with respect to which the issuer files, or is required to file, periodic information, documents, and reports under 15 U.S.C. 78o(d) (Securities Exchange Act of 1934); or
(3) engages on behalf of any party in a transaction involving a public shell company.
(c) A merger and acquisition broker is not exempt from registration under AS 45.56.300 if the broker is subject to
(1) suspension or revocation of registration under 15 U.S.C. 78o(b)(4) (Securities Exchange Act of 1934);
(2) a statutory disqualification described in 15 U.S.C. 78c(a)(39) (Securities Exchange Act of 1934);
(3) a disqualification established by the rules adopted by the Securities and Exchange Commission under Public Law 112-106, sec. 302(d), for 15 U.S.C. 77d (Dodd-Frank Wall Street Reform and Consumer Protection Act); or
(4) a final order described in 15 U.S.C. 78o(b)(4)(H) (Securities Exchange Act of 1934).
(d) This section may not be construed to limit any other authority of the department to exempt any person, or any class of persons, from a provision of this chapter, or a provision of a rule or regulation adopted under this chapter.
(e) In this section,
(1) “control” means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise; there is a presumption of control for any person who
(A) is a director, general partner, limited liability company member, limited liability company manager, an officer who exercises executive responsibility, or an officer who has status or functions similar to an officer who exercises executive responsibility;
(B) has the right to vote 20 percent or more of a class of voting securities or the power to sell or direct the sale of 20 percent or more of a class of voting securities; or
(C) in the case of a partnership or limited liability company, has the right to receive upon dissolution, or has contributed, 20 percent or more of the capital;
(2) “eligible privately held company” means a company that
(A) does not have any class of securities registered, or required to be registered, with the Securities and Exchange Commission under 15 U.S.C. 78l(b) (Securities Exchange Act of 1934), or with respect to which the company files, or is required to file, periodic information, documents, and reports under 15 U.S.C. 78o(d) (Securities Exchange Act of 1934); and
(B) in the fiscal year ending immediately before the fiscal year in which the services of the merger and acquisition broker are initially engaged with respect to the securities transaction, meets either or both of the following conditions, determined in accordance with the historical financial accounting records of the company:
(i) the earnings of the company before interest, taxes, depreciation, and amortization are less than $25,000,000;
(ii) the gross revenue of the company is less than $250,000,000;
(3) “merger and acquisition broker” means a broker, and a person associated with the broker, engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company, regardless of whether that broker acts on behalf of a seller or buyer, through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the eligible privately held company, if the broker reasonably believes that
(A) upon consummation of the transaction, a person acquiring securities or assets of the eligible privately held company, acting alone or in concert, will control and, directly or indirectly, be active in the management of the eligible privately held company or the business conducted with the assets of the eligible privately held company; and
(B) if a person is offered securities in exchange for securities or assets of the eligible privately held company, the person will, before becoming legally bound to consummate the transaction, receive or have reasonable access to the most recent fiscal year-end financial statements of the issuer of the securities as customarily prepared by its management in the normal course of operations and, if the financial statements of the issuer are audited, reviewed, or compiled, any related statement by the independent accountant; a balance sheet dated not more than 120 days before the date of the exchange offer; and information pertaining to the management, business, results of operations for the period covered by the foregoing financial statements, and any material loss contingencies of the issuer;
(4) “public shell company” means a company that, at the time of a transaction with an eligible privately held company,
(A) has any class of securities registered, or required to be registered, with the Securities and Exchange Commission under 15 U.S.C. 78l(b), or with respect to which the company files, or is required to file, periodic information, documents, and reports under 15 U.S.C. 78o(d);
(B) has no assets or has nominal operations; and
(C) has
(i) no assets or has nominal assets;
(ii) assets consisting solely of cash and cash equivalents; or
(iii) assets consisting of any amount of cash and cash equivalents and nominal other assets.