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GIGAPIX STUDIOS, INC.
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STIPULATION AND No. ST-11-7948-S |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the General Statutes of Connecticut, the Connecticut Uniform Securities Act (“Act”), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”) promulgated under the Act;
WHEREAS, Gigapix, a California corporation having its principal office at 9333 Oso Avenue, Chatsworth, California, is an issuer of securities, including shares of Gigapix common stock;
WHEREAS, David Pritchard is President and Colin Mutton is Chief Financial Officer of Gigapix;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”) conducted an investigation of Gigapix (“Investigation”) pursuant to Section 36b-26 of the Act;
WHEREAS, as a result of the Investigation, the Division ascertained that, commencing in December 2007, Gigapix offered and sold securities to at least one Connecticut resident (the “2007 Offering”). At the time of the 2007 Offering, such securities were not registered under Sections 36b-17, 36b-18 or 36b-19 of the Act nor the subject of an exemptive claim or claim of covered security status under Section 36b-21 of the Act. The securities sold in the 2007 Offering were also not the subject of a registration or exemption filing under the federal Securities Act of 1933;
WHEREAS, Section 36b-16 of the Act provides that:
No person shall offer or sell any security in this state unless (1) it is registered under sections 36b-2 to 36b-34, inclusive, (2) the security or transaction is exempted under section 36b-21, or (3) the security is a covered security provided such person complies with any applicable requirements in subsections (c), (d) and (e) of section 36b-21[;]
WHEREAS, as a result of the Investigation, the Division further ascertained that 1) on September 14, 2009, Gigapix filed with the Securities and Exchange Commission (the “SEC”) a Form D pursuant to Rule 506 and Section 4(6) of the Securities Act of 1933; 2) the Form D covered a $3 million offering of Gigapix equity securities, and stated that the first sale had occurred on September 11, 2009; 3) Gigapix sold securities in the 2009 offering to at least one Connecticut resident in October, 2009; and 4) on December 9, 2009, the Division received from Gigapix a Rule 506 notice filing and associated fee for the 2009 offering pursuant to Section 36b-21(e) of the Act;
WHEREAS, Section 36b-21(e) of the Act provides that:
Any person who offers or sells a security that is a covered security under Section 18(b)(4)(D) of the Securities Act of 1933 shall file a notice with the commissioner within fifteen days after the first sale of such a security in this state. Such notice shall contain such information as the commissioner may require and shall be accompanied by a consent to service of process as required by subsection (g) of section 36b-33 and a nonrefundable fee of one hundred fifty dollars[;] (Emphasis supplied)
WHEREAS, the Commissioner believes that the failure by Gigapix to comply with Section 36b-16 of the Act in conjunction with the 2007 Offering and the failure by Gigapix to timely file the notice required by Section 36b-21(e) of the Act in connection with the 2009 offering would support the imposition of administrative sanctions against Gigapix pursuant to Sections 36b-27(a) and 36b-27(d) of the Act;
WHEREAS, an administrative proceeding initiated under Section 36b-27 of the Act would constitute a “contested case” within the meaning of Section 4-166(2) of the General Statutes of Connecticut;
WHEREAS, Section 4-177(c) of the General Statutes of Connecticut and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by stipulation or agreed settlement, unless precluded by law;
WHEREAS, Gigapix desires to settle the matters described herein and, without admitting or denying the allegations herein, voluntarily enters into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding against Gigapix, its officers, directors, employees, agents, representatives or successors in interest adjudicating any issue of fact or law on the specific matters described herein;
WHEREAS, Gigapix, through its execution of this Stipulation and Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;
WHEREAS, the issuance of this Stipulation and Agreement is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the Act;
AND WHEREAS, Gigapix specifically assures the Commissioner that none of the violations alleged in this Stipulation and Agreement shall occur in the future.
NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:
| 1. |
No later than the date this Stipulation and Agreement is executed by the Commissioner, Gigapix shall remit to the Department via cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, the sum of one thousand three hundred dollars ($1,300) as an administrative fine; |
| 2. |
Commencing on the date this Stipulation and Agreement is executed by the Commissioner and continuing for three years thereafter, prior to any issuance, offer or sale of securities in or from Connecticut by Gigapix or its successors in interest, Gigapix or its successors in interest shall: (a) provide the Division Director with written advance notice of such issuance, offer or sale; (b) retain legal counsel experienced in Connecticut securities law to advise it on compliance with the securities laws of Connecticut and other jurisdictions (“Retained Counsel”); (c) identify Retained Counsel to the Division Director in writing; (d) direct Retained Counsel to prepare and submit any required registration or other required documents and fees to the Division, and provide the Division Director with a signed opinion of Retained Counsel setting forth the basis for any claim of exemption or covered security status under Section 36b-21 of the Act at least thirty (30) days prior to the commencement of the offering; and (e) refrain from issuing, offering or selling securities in or from Connecticut prior to receiving a written acknowledgement from Retained Counsel that the Commissioner has declared any such registration effective; |
| 3. | Gigapix, its officers, directors, control persons, affiliates and successors in interest shall refrain from offering or selling securities in or from Connecticut absent compliance with Section 36b-16 of the Act, including timely compliance with any applicable filing requirements; |
| 4. | Upon execution of this Stipulation and Agreement by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Gigapix, its officers, directors, control persons, affiliates and successors in interest based upon the specific factual allegations contained herein; provided that the execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Gigapix, its officers, directors, control persons or successors in interest based upon a violation of this Stipulation and Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof. Execution of this Stipulation and Agreement by the Commissioner shall not be deemed a waiver or estoppel on the part of the Commissioner from proceeding in individual actions against any person who may have violated the Act in any transaction not currently known to the Commissioner at the time the Stipulation and Agreement is executed; and |
| 5. | This Stipulation and Agreement shall become binding when executed by Gigapix and the Commissioner. |
IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.
| Dated at Hartford, Connecticut, | _______/s/_________ | |
| this 24th day of April 2012. | Howard F. Pitkin | |
| Banking Commissioner |
I, David Pritchard [sic], state on behalf of Gigapix Studios, Inc., that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of Gigapix Studios, Inc; and that Gigapix Studios, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
Gigapix Studios, Inc.
By:
___/s/_______________
Chris Blauvelt
CEO
State of: California
County of: Los Angeles
On this the 10th day of April, 2012, before me, Levik Nazari, Notary Public, the undersigned officer, personally appeared Chris Blauvelt, who acknowledged himself to be the President [sic] of Gigapix Studios, Inc., a corporation, and that he, as such President [sic], being authorized to do so, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President [sic].
In witness whereof I hereunto set my hand.
_____/s/__________________________
Notary Public
Date Commission Expires: July 15, 2015