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H. Cautionary Language in the San Nicholas Offering Memorandum
The face of the offering memorandum warned, in block
letters, that “THIS OFFERING INVOLVES A HIGH DEGREE OF RISK”.
The offering memorandum also included the following cautionary
language in block letters:
PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO CONSTRUE
THIS MEMORANDUM OR ANY PRIOR OR SUBSEQUENT
COMMUNICATIONS AS CONSTITUTING LEGAL OR TAX ADVICE.
* * * INVESTORS ARE URGED TO CONSULT THEIR OWN COUNSEL
AS TO ALL MATTERS CONCERNING THIS INVESTMENT.
* * * * * * *
THERE IS NO PUBLIC OR OTHER MARKET FOR THE UNITS, NOR
WILL SUCH MARKET DEVELOP.
* * * * * * *
THE PURCHASE OF SUCH UNITS DESCRIBED IN THIS MEMORANDUM
INVOLVES A HIGH DEGREE OF RISK (SEE “RISK FACTORS”) AND
SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE
TOTAL LOSS OF THEIR INVESTMENT.
* * * * * * *
EACH PURCHASER OF THE UNITS HEREIN SHOULD AND IS
EXPECTED TO CONSULT WITH HIS OWN TAX ADVISOR AS TO THE
TAX ASPECTS.
In addition, the offering memorandum limited the sale of
partnership units to investors with a net worth (exclusive of
home, furnishings, and automobiles) of at least $150,000, or
investors whose net worth was at least $50,000 (exclusive of
home, furnishings, and automobiles) and who anticipated that, for
the taxable year of the investment, they would have gross income
of at least $65,000 or taxable income, a portion of which, but
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