CR-SCOR: West

Overview
Coordinated Review-SCOR-West (CR-SCOR-West) is a program available to issuers seeking to sell equity securities in multiple Western states in an offering to be made using the Small Company Offering Registration (SCOR) Form.  The program coordinates the registration process in all states in the region in which the issuer seeks to sell, saving the issuer time and money.  The program expedites the registration process through strict review deadlines and by allowing an issuer to complete the registration while only interacting with one state regulator regardless of the number of states in which the offering will be registered. As an added benefit, the program provides for some relief from applicable merit standards as detailed in the CR-SCOR-West Eligibility and Review Policy Matrix.  Eleven (11) western states participate in the program.

If you are considering offering in additional states, consult the central website for the CR-SCOR programs, which include CR-SCOR-Mid-Atlantic, CR-SCOR-Midwest, and CR-SCOR-Southwest. If you are considering offering on a national basis, check out the Coordinated Review-3(b) Program for Regulation A offerings and the Coordinated Review-Equity Program for federally registered equity offerings.  Offerings of interests in real estate investment trusts, business development companies, oil and gas programs and other direct participation programs can take advantage of Coordinated Review-Direct Participation Programs.

Participating States
States currently participating in the CR-SCOR-West program include:

Alaska Idaho New Mexico Washington
Arizona Montana Oregon Wyoming
Colorado Nevada Utah  

 

Coordinated review is only available if the issuer intends to register in two (2) or more of these states.

Eligibility
CR-SCOR-West is only available to SCOR offerings of common stock, preferred stock, warrants, rights and units comprised of equity securities.  The offering must be exempt from federal registration under Rule 504 of Regulation D.

If you are considering a differing type of offering, please consider using one of the other coordinated review programs that are available.  More information is available at www.coordinatedreview.org.

How to Apply for Coordinated Review
To apply for registration through CR-SCOR-West, the issuer will need to make a filing in each state in which the offering is to be registered.  The filing will consist of certain documents and a filing fee.

  • Forms: The issuer should submit directly to each state in which it wishes to register the forms required by that state. These forms typically include:
  1. Uniform Application to Register Securities (Form U-1);
  2. Uniform Consent to Service of Process (Form U-2);
  3. Uniform Form of Corporate Resolution (Form U-2A) (see page 5 of document);
  4. Application for Coordinated Review-SCOR-West (Form CR-SCOR-West-1); and
  5. Copy of the completed SCOR Form with exhibits.
  • Financial Statements: The participating CR-SCOR-West states differ in their requirements regarding financial statements of the issuer. For offerings of $1,000,000 or less, audited financial statements may not be required, however the issuer must generally provide financial statements prepared in accordance with generally accepted accounting principles (GAAP) with appropriate footnotes. An issuer without reviewed or audited financial statements is strongly encouraged to retain a CPA to compile the issuer’s financial statements into GAAP format.  For offerings in excess of $1 million, most states in the region require audited financial statements.
  • Fees: The issuer is required to remit the payment required by each state in which it seeks to sell its securities. Such payment shall be submitted to that state along with the other documentation.
  • Salesperson Licensing: Most states in the region require that securities offered under the CR-SCOR-West program be sold through appropriately licensed securities salespersons. Examinations may not be required for officers and directors of the company who sell the securities without receiving commission or other sales based compensation. In order to obtain a license, each salesperson must generally submit a Form U-4 and a nominal filing fee.  If an application neglects to include the necessary salesperson application materials, the states participating in coordinated review will inform the issuer of the requirements in their initial coordinated review comment letter.

Washington acts as the CR-SCOR-West Program Administrator. In addition to submitting the paperwork to each state in which it seeks to sell, the issuer shall also file Form CR-SCOR-West-1 with the State of Washington if the issuer’s principal place of business is not located in one of the participating CR-SCOR-West states. In these instances, Washington is responsible for selecting the “lead” jurisdiction from those selected by the issuer on the Form CR-SCOR-West-1. If the issuer’s principal place of business is within the one of the participating states, that state, known as the Home State, will either be the lead jurisdiction or coordinate the selection of the lead jurisdiction. If the issuer does not seek to sell its securities in Washington, the issuer submits only the Form CR-SCOR-West-1. If the issuer seeks to sell in Washington, it should also submit the appropriate registration forms, offering documents, and fees.

Selection of the Lead Examiner
The issuer does not have the option of requesting a specific lead state. Washington, as Program Administrator, or the Home State will select the lead state based on a number of factors, including the state’s resources, experience in CR-SCOR-West applications, and a number of other considerations. While the Home State will frequently be the lead state, the factors cited above may dictate the selection of a different lead state.

Timing
Within three business days after receipt of the issuer’s Form CR-SCOR-West-1, the Home State or Program Administrator (Washington) will designate a lead state. This state is selected from the states the issuer has chosen on the Form CR-SCOR-West-1. All participating states have ten business days to comment on the issuer’s application and forward those comments to the lead state. Within another five business days, the lead state will collect and consolidate all the comments and send one coordinated comment letter to the issuer. The lead state then works to resolve outstanding comments with the issuer or its counsel. Once the lead state clears the application, all participating states agree to clear it as well. The issuer can anticipate receiving the initial response letter from the participating states within 3-4 weeks.

Lead Examiner Responsibilities

The lead examiner is responsible for:

  • Collecting comments from the participating states;
  • Drafting one comment letter to the issuer;
  • Forwarding a copy of the initial comment letter to the participating states;
  • Forwarding a copy of the issuer’s response letter to the participating states;
  • Negotiating the resolution of comments with the issuer;
  • Negotiating the resolution of comments with the participating states;
  • Making all final decisions regarding the resolution of comments; and
  • Recommending registration of the issuer’s offering and forwarding that recommendation to all participating states.

Issuer Responsibilities

The issuer is responsible for the following:

  • Filing the Application for CR-SCOR-West Form CR-SCOR-West-1 and all other appropriate documents and fees with each participating state in which it seeks to sell;
  • Filing the Application for CR-SCOR-West Form CR-SCOR-West-1 in Washington if the issuer’s principal place of business is not within one of the states participating in CR-SCOR-West;
  • Filing all amendments with the participating states;
  • Communicating with the lead examiner to resolve comments;
  • Forwarding all amendments to the issuer’s offering documents to the participating states; and
  • If necessary, negotiating the resolution of state specific comments with the participating states.

Applicable Statements of Policy
If you apply for registration in any participating states that impose merit standards, the following statements of policy will be applied to the offering where applicable and as modified by the CR-SCOR-West Eligibility and Review Policy Matrix:

 

Who to Contact with Questions
If you have any questions about CR-SCOR-West, please contact the Washington Securities Division by email at securitiesregistration@dfi.wa.gov or by phone at 360-902-8760.

Additional Resources

SCOR Overview

Small Company Offering Registration Form (Form U-7)

Issuer’s Manual for Form U-7

CR-SCOR-West Eligibility and Review Policy Matrix

CR-SCOR-West-1 Form

Application to Register Securities (Form U-1)

Consent to Service of Process (Form U-2)

Salesperson Application Form (Form U4)