California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 10 - Real Estate Programs › Miscellaneous Provisions › Section 260.140.118.4 - Financial Information

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The following financial information shall be provided
						  with any application:
(a) Financial
						Statements of Program. The prospectus shall include audited financial
						statements of the program for each of the last three fiscal years (or for the
						life of the program, if less), provided that the only audited balance sheet
						that shall be required shall be as of the end of the most recent fiscal year of
						the program. When a program has operated less than one fiscal year, audited
						financial statements are not required unless requested by the
						Commissioner.
(b) Financial
						Statements of Corporate Sponsor. The prospectus shall contain audited financial
						statements which shall be required to consist only of an audited balance sheet
						of each corporate sponsor as of the end of the sponsor's most recent fiscal
						year. An audited statement of income for the last fiscal year shall also be
						submitted with the application. The inclusion of statements of income in the
						prospectus shall be at the discretion of the Commissioner.
(c) Other Sponsors. A balance sheet for each
						non-corporate sponsor (including individual partners or individual joint
						venturers of a sponsor) as of a date not more than one hundred thirty-five days
						prior to the date of filing the application shall be submitted. Such balance
						sheet shall be prepared in accordance with generally accepted accounting
						principles and reviewed and reported upon by an independent certified public
						accountant under the review standards set forth by the American Institute of
						Certified Public Accountants, and shall be signed and sworn to by such sponsor.
						A representation of the amount of such net worth must be included in the
						prospectus, or in the alternative, a representation that such sponsor meets the
						net worth requirements of Section
						260.140.111.2 shall be so
						included.
(d) Affiliates of
						Sponsors. The submission of financial statements of affiliates of a sponsor
						will be required when material.
(e)
						Interim Financial Information. Where an audited balance sheet required by this
						Section is as of a date more than 90 days prior to the date of filing, an
						unaudited balance sheet as of a date not more than 90 days prior to the date of
						filing shall also be provided. Where the application is made in coordination
						with a Registration Statement submitted to the Securities and Exchange
						Commission pursuant to the Securities Act of 1933, an interim unaudited balance
						sheet as of a date not more than one hundred thirty-five days prior to the date
						of filing shall be provided only if the audited balance sheet is as of a date
						more than 135 days prior to the date of filing. Interim unaudited statements of
						income, partners' equity, and cash flows shall also be provided with the
						unaudited balance sheet in instances where such statements are required by this
						section as part of the audited financial statements.
(f) Filing of Other Statements. The
						Commissioner may permit the omission of one or more of the financial statements
						required under this Section and the filing (in substitution thereof) of
						appropriate statements verifying financial information having comparable
						relevance to an investor in determining whether to invest in the program. Such
						substitution will only be allowed where the Commissioner finds this would be
						consistent with the protection of investors.
1.
						  Renumbering and amendment of former section
						  260.140.118.4 to section
						  260.140.118.3; and renumbering and
						  amendment of former section
						  260.140.118.5 to section
						  260.140.118.4 filed 1-27-84;
						  effective thirtieth day thereafter (Register 84, No. 4).
2.
						  Amendment filed 5-18-92; operative 6-17-92 (Register 92, No. 22).
3.
						  Change without regulatory effect amending subsection (c) filed 9-25-2002
						  pursuant to section
						  100, title 1, California Code of
						  Regulations (Register 2002, No. 39).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.