New York Codes, Rules and Regulations › Title 13 - DEPARTMENT OF LAW › Chapter II - SECURITIES TRANSACTIONS AND PERSONNEL › Subchapter B - REAL ESTATE SYNDICATES › Part 16 - REAL ESTATE SYNDICATION OFFERINGS › Section 16.9 - Sources of distributions

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
				  Beginning November 1, 1963, all partnerships, corporations, trusts, joint
				  ventures, associations and other groups or entities, persons and offerors who
				  were required heretofore since January 1, 1961 or who hereafter are required by
				  article 23-A of the General Business Law to file an offering statement under
				  section 352-e thereof, or who have obtained an exemption therefrom under
				  section 352-g of article 23-A, or are granted such exemption hereafter, are
				  hereby required to transmit to each of the then owners of securities of said
				  issuer, who are residents of this State, at the end of each quarter thereafter
				  of its respective fiscal year, but not later than 60 days from such date, a
				  statement to be known as a "Source of Distribution Statement", when such owners
				  have been paid distributions from any source by such issuer for or during such
				  quarterly period, which shall indicate clearly to each investor in the manner
				  and form set forth in form SD-1 issued by the Attorney-General:
(1) Whether or not any payments of cash to
				  any investors, partners, stockholders, etc., were made from any of the
				  following sources, and the amounts thereof with full details:
(i) borrowed monies (secured or
				  unsecured);
(ii) loans or
				  additional contributions from officers or partners or other principals or
				  agents thereof;
(iii) proceeds from
				  the sale, transfer, option, exchange or other disposition (including
				  involuntary conversion and insurance proceeds) of property or other assets,
				  contracts, etc. (including monies received as deposit on contracts, returnable
				  and nonreturnable). In the determination of such "proceeds", deferred payments
				  and purchase money mortgages should be treated on the basis of accepted
				  installment accounting principles;
(iv) funds generated from operations, which
				  funds should be defined to include net income as ascertained through the use of
				  standard accounting practices adjusted so that depreciation allowances are not
				  treated as an expense and payment of principal due on debt is deducted.
				  However, in the case of motels, hotels, nursing homes, furnished apartment
				  houses and similar properties, personalty recurrently acquired for use in
				  connection with real property should be deducted as an expense;
(v) monies paid to the issuer by lessees or
				  other obligors as a result of a transaction where rent or other obligations due
				  are intended to be made primarily from the operations of a particular property
				  or properties where the issuer or any principal of the issuer has a material
				  direct or indirect interest in the lessees or obligors when it is known to the
				  issuer or principal thereof that all or part of such monies emanated from
				  sources other than recurrent business earnings of such obligors or lessees in
				  connection with the operation of the particular property or properties
				  concerned.