2017 Arizona Revised Statutes
Title 44 - Trade and Commerce
§ 44-1894 Prospectus; contents; use of consolidated financial statements; amendment or supplement to prospectus required to show material change

Universal Citation: AZ Rev Stat § 44-1894 (2017)

44-1894. Prospectus; contents; use of consolidated financial statements; amendment or supplement to prospectus required to show material change

A. Except as provided in section 44-1901, the prospectus required by section 44-1892 shall be filed with the application, and shall include the following, together with other information the commission requires:

1. The name and address of the issuer, date of incorporation or organization, general character of the business transacted or to be transacted and a description of the principal assets of the issuer.

2. The name and address and business experience of each officer and director of the issuer, if a corporation or unincorporated association, of each trustee or other fiduciary, if a trust, or of each partner, if a partnership.

3. The total authorized capital of the issuer, the total amount of each class of securities authorized and the total amount of securities of each class issued and outstanding.

4. The total amount of each class of securities held by each officer or director, if a corporation or unincorporated association, by each trustee or other fiduciary, if a trust, by each partner, if a partnership, and by each beneficial owner of ten per cent or more of any class of securities.

5. The total amount of securities of each class issued or to be issued for options, contracts, leases, patents, assignments, services or expenses, goodwill or other intangible assets, the name and address of each person to whom the securities have been or are to be issued and the consideration received or to be received by the issuer therefor.

6. The title or descriptive name and amount of the securities to be offered, the offering price per unit and in the aggregate, the name and address of the principal underwriter and the nature of the underwriting commitment, the amount of underwriting discounts or commissions or other selling expenses per unit and in the aggregate and the net per unit and in the aggregate to be received by the issuer. The statement of underwriting discounts or commissions or other selling expense shall include the maximum amount to be paid by the issuer in cash or otherwise, directly or indirectly, in connection with the sale of the securities.

7. The specific purposes for which funds to be derived from the sale of the securities are to be used and the approximate amount to be devoted to each purpose.

8. A description of all material contracts to which the issuer is a party and of all material litigation involving the issuer.

9. A balance sheet that reflects the issuer s financial position as of a date not more than one hundred twenty days before the date of filing, and, if the balance sheet is not certified, also a certified balance sheet as of a date not more than one year before the date of filing unless the fiscal year of the issuer has ended within one hundred twenty days before the date of filing, in which case the certified balance sheet may be as of the end of the preceding fiscal year.

10. Statements of income or operations, stockholders' equity or retained earnings and cash flows that reflect the issuer s results of operations and cash flows for each of the three fiscal years preceding the date of the most recent balance sheet filed and for the period, if any, between the close of the most recent of such fiscal years and the date of the most recent balance sheet filed, or other financial information the commission establishes by order or rule. If the issuer has been in existence for less than three fiscal years, statements of income or operations, stockholders' equity or retained earnings and cash flows shall be for the period of the issuer's existence.

B. If the issuer has one or more subsidiaries, the commission or the director may require, in addition to the balance sheet and related statements of income or operations, stockholders' equity or retained earnings and cash flows required by subsection A, paragraphs 9 and 10 of this section, a consolidated balance sheet and related consolidated statements of income or operations, stockholders' equity or retained earnings and cash flows that reflect the consolidated financial position, results of operations and cash flows for the issuer and its subsidiaries as of the same dates as required by subsection A, paragraphs 9 and 10 of this section.

C. If any material change occurs in the matters set forth in the prospectus filed under section 44-1892 and this section, or if any material change occurs in the plan of business of the issuer as set forth in the prospectus, each change shall be included in an amended prospectus or in a supplement to the prospectus which shall be promptly filed with the commission.

D. In connection with the registration of real property investment contracts, in addition to other information required by this chapter, the prospectus shall include the following:

1. A legal description or address of the property subject to the lien securing the note or contract being made or sold.

2. The name and address of the fee owner of the property subject to the lien securing the note or contract being made or sold.

3. Such information relative to the ability of the person liable on the obligation to meet the contractual payments, as the commission may require.

4. The existence of any improvements on the property or any utilities on or adjacent to the property which will service the property.

5. Terms and conditions of the contract or note being made or sold, including the principal balance owed, and the status of the principal and interest payments on the contract or note.

6. The terms and conditions of all prior recorded encumbrances which constitute liens on the property, the principal balance of such encumbrances and the status of principal and interest payments on the encumbrances.

7. Any assessments and tax liens of record on the property securing the contract or note being sold.

8. An independent appraisal of the value of the property subject to the lien securing the note or contract being made or sold. The appraisal shall state the value of the property as it exists on the date the appraisal is made.

9. The qualifications of the appraiser and the methods used in making the appraisal.

10. The loan to value ratio.

11. A description and amount of all fees paid by the borrower and investor.

12. A description of the method by which the yield is calculated.

E. Notwithstanding the provisions of this section, nothing in this section prevents the commission from entering into formal or informal agreements with the administrators of the securities laws of other states, Canada or Mexico and, as deemed appropriate by the commission, with the North American securities administrators association for the establishment of an international, national or regional coordinated uniform review of equity, debt or any other class of securities to reduce the regulatory burden and expense of registering public offerings in multiple states, Canada and Mexico.

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