Sample Prospectus – Securities Regulation

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  1. Sample Prospectus o See 44-101F1.

o Warning at the top: No securities commission has passed upon the merits (have to tell you whether it is a new issue OR secondary offering (Note: if this was a prelim prospectus would have a red herring at top) o How much $ to UWs/company o Risk factors

o Summary (b/c every prospectus must have a summary)

o Everything about company that is material, including: business of company, use of proceeds (must disclose what you will do with money), financial forecast and warnings, financial statements (capital, principal shareholders, directors/officers), UW agreement details (market out clause: obligations of UW can be terminated), escrow arrangements (to balance risks between new and old shareholders), Material contracts (and risks), AND legal proceedings, certificate of company (strict liab), certificate of underwriters (gives rise to due diligence defence)

o Obligations of UW may be terminated at their discretion based on their assessment of state of financial markets (market out clause), purchaser’s stat rights, remedy for rescission/damage, certificate

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