Ariz. Admin. Code § 14-4-118

Current through Register Vol. 30, No. 50, December 13, 2024

Section R14-4-118 - Statements Required in Prospectus

A. This Section applies to securities subject to A.R.S. Title 44, Chapter 12, Articles 6 and 7.

B. The outside front cover page of every prospectus shall include, in a concise and conspicuous manner, a disclosure that neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities or determined if the prospectus is truthful or complete, and that any representation to the contrary is a criminal offense.

C. If any of the following apply to an issuer, the outside front cover page of the prospectus also shall include, in a concise and conspicuous manner, a disclosure regarding the speculative or high-risk nature of the securities:

1. The issuer has not been in the business described in the prospectus for at least three years.

2. The issuer has not had net income in any of its last three fiscal years.

3. The value of the security offered is materially dependent on the fulfillment or accomplishment of a future condition, promotion, or development instead of the issuer's present tangible assets or conditions.

4. A significant portion of the issuer's assets are intangible assets that have not been assigned a value in an audited financial statement according to generally accepted accounting principles.

5. The issuer intends to exchange a significant portion of the securities for intangible assets at a per-unit price that is substantially lower than the per-unit price offered in the prospectus.

6. The securities are issued as part of any project or plan for the sale, development, or exploration of any interest in unimproved or undeveloped land or oil, gas, or other mineral right.

D. Issuers may comply with subsection (C) by using either of the following disclosures or other clear, plain language.

1. "These are speculative securities. You should purchase these securities only if you can afford a complete loss of your investment."

2. "This investment involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment."

Ariz. Admin. Code § R14-4-118

Former Order S-18. Amended by final rulemaking at 6 A.A.R. 1902, effective May 3, 2000 (Supp. 00-2).