NAC90.480. Contents of registration statement or offering document; penalty for failure to comply.

     1. The registration statement, in the case of a security registered pursuant to NRS 90.480, or the offering document required by subsection 11 of NRS 90.500 in the case of a security registered pursuant to NRS 90.490, must set forth with reasonable specificity:

     (a) The intended use of the proceeds of the offering;

     (b) The type of business in which the issuer is or will be engaged;

     (c) The product or service offered or to be offered by the issuer; and

     (d) The name of each principal manager of the business of the issuer.

     2. If, in the case of a security other than a security described in subsection 3, the information required by subsection 1 is not set forth with the specificity required by that subsection, the Administrator may deem the offering to be a blank check blind pool and may deny, suspend or revoke the effectiveness of the registration statement pursuant to NRS 90.510 unless:

     (a) The net offering proceeds to the issuer, after deducting offering expenses and commissions, are not less than $150,000;

     (b) Notwithstanding the provisions of NAC 90.490, the issuer has equity, contributed in cash, of not less than 10 percent of the aggregate offering price;

     (c) Specific disclosure is made of the criteria to be used by management in acquiring a business or other asset;

     (d) Disclosure is made of any previous involvement of any officer or director of the issuer in any similar offering, including:

          (1) The nature of any transaction entered into by the issuer in connection with that offering;

          (2) The dilution experienced by public shareholders as a result of that transaction; and

          (3) The extent to which the criteria for selection set forth in the original prospectus were followed in effecting that transaction;

     (e) The issuer undertakes in the prospectus to obtain the approval of a majority of disinterested shareholders if he or she proposes to:

          (1) Spend more than 50 percent of the net offering proceeds in a transaction or series of related transactions;

          (2) Issue new shares of stock equivalent, after completion of the transaction or series of related transactions, to more than 50 percent of the issued and outstanding stock;

          (3) Change, without a meeting of the shareholders and within any 12-month period, more than one-half the members of the board of directors; or

          (4) Change the criteria for acquisitions set forth in the prospectus; and

     (f) The issuer undertakes in the prospectus to distribute an informational statement, before any vote of the shareholders conducted pursuant to paragraph (e), setting forth:

          (1) All material facts regarding the proposal, including specific disclosure of the manner in which the criteria for selection set forth in the offering prospectus have been applied;

          (2) A reasonably detailed description of any business or asset to be acquired in the proposed transaction;

          (3) A detailed disclosure of any related-party transaction, finders’ fee, consulting fee or agreement expected to be entered into or paid within the 12 months following the proposed transaction with or to any person who is an officer, director, promoter or principal shareholder of the issuer; and

          (4) A pro forma balance sheet, prepared in accordance with generally accepted accounting principles, which gives effect to the proposed transaction and discloses the dilution to shareholders resulting from the transaction and the book value of the issuer immediately before and immediately after the transaction.

     3. If, in the case of a security registered on Form SB-2 with the United States Securities and Exchange Commission, pursuant to Rule 419 of the Securities and Exchange Commission, 17 C.F.R. § 230.419, and registered pursuant to NRS 90.480, the information required by subsection 1 is not set forth with the specificity required by that subsection, the Administrator may deem the offering to be a blank check blind pool and may deny, suspend or revoke the effectiveness of the registration statement pursuant to NRS 90.510 unless the registration statement sets forth with reasonable specificity:

     (a) The name of each principal manager of the business of the issuer;

     (b) That the net offering proceeds to the issuer are not less than $75,000;

     (c) That, notwithstanding the provisions of NAC 90.490, the issuer has equity, contributed in cash, of not less than 10 percent of the aggregate offering price;

     (d) That specific disclosure has been made of the criteria to be used by management in acquiring a business or other asset;

     (e) That disclosure has been made of any previous involvement of any officer, director or principal manager of the issuer in any similar offering, including:

          (1) The nature of any transaction entered into by the issuer in connection with that offering;

          (2) The dilution experienced by public shareholders as a result of that transaction; and

          (3) The extent to which the criteria for selection set forth in the original prospectus were followed in effecting that transaction;

     (f) That the issuer has undertaken in the prospectus to distribute an informational statement, before any vote of the shareholders is conducted pursuant to Rule 419 of the Securities and Exchange Commission, 17 C.F.R. § 230.419, setting forth:

          (1) All material facts regarding the proposal, including specific disclosure of the manner in which the criteria for selection set forth in the offering prospectus have been applied;

          (2) A detailed description of any business or asset to be acquired in the proposed transaction;

          (3) A detailed disclosure of any related-party transaction, finders’ fee, consulting fee or agreement expected to be entered into or paid within the 12 months following the proposed transaction with or to any person who is an officer, director, principal manager, promoter or principal shareholder of the issuer; and

          (4) A pro forma balance sheet, prepared in accordance with generally accepted accounting principles, which gives effect to the proposed transaction and discloses the dilution to shareholders resulting from the transaction and the book value of the issuer immediately before and immediately after the transaction;

     (g) That the offering will be completed within 3 months after the registration statement registered pursuant to NRS 90.480 becomes effective and that all the money of the investors that was raised in the offering will be held in an escrow account described in 17 C.F.R. § 230.419(b)(1)(i)(A) or in a trust account described in 17 C.F.R. § 230.419(b)(1)(i)(B);

     (h) That the money of the investors that is held in the escrow or trust account will not be distributed to any officer, director, principal manager or promoter until an acquisition of another company has been completed and confirmed by the investors; and

     (i) Either that any acquisition of another company resulting from an offering made pursuant to Rule 419 of the Securities and Exchange Commission, 17 C.F.R. § 230.419, will be completed within 9 months after the date on which the offering is completed or that the money of the investors which is held in the escrow or trust account, including any interest, will be returned to the investors within 5 days after that date.

     (Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R047-04, 5-25-2004)