Delivery of Financial Statements; Inspection Rights Clause Samples
The "Delivery of Financial Statements; Inspection Rights" clause requires a party, typically a borrower or company, to provide regular financial statements and related documents to another party, such as a lender or investor. In practice, this means the obligated party must deliver periodic balance sheets, income statements, and other financial reports within specified timeframes, and may also grant the right to inspect books and records upon request. This clause ensures transparency and allows the receiving party to monitor financial health and compliance, thereby reducing information asymmetry and supporting informed decision-making.
Delivery of Financial Statements; Inspection Rights. The Parties shall cause the Company to deliver to each Party, at the Company’s expense, (i) annual audited and quarterly and monthly unaudited financial statements prepared in accordance with Japanese GAAP consistently applied, including any independent auditor’s report or opinion thereon, if any, and (ii) any information necessary to enable a Party to prepare consolidated financial statements, in each case within sixty (60) days after the end of each fiscal year of the Company and within thirty (30) days after the end of each quarterly accounting period of the Company and calendar month. Each Party will indemnify the Company and hold it harmless for, from and against any claims, demands, costs or expenses arising out of or relating to such consolidated financial statements, provided that such indemnity shall not apply to claims, demands, costs or expenses to the extent they are related to the Company’s financial statements provided to such Party. In addition to any inspection rights granted under Law, upon notice to the Company of at least twenty-four (24) hours, each Party shall have full access to all properties, books of account, and records of the Company.
Delivery of Financial Statements; Inspection Rights. (1) The Company will furnish the following reports to each Investor holding at least 1,000,000 shares of the Company’s Preferred Stock (as adjusted for any share splits, combinations, dividends or the like with respect to such shares) (a “Major Investor”):
(i) as soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred eighty (180) days thereafter, a balance sheet of the Company as at the end of such fiscal year and statement of stockholders’ equity as of the end of such year, and statements of income and cash flows of the Company for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), which will be audited and certified by an independent public accounting firm selected by the Company unless otherwise determined by the Board; and
(ii) at least thirty (30) days after the beginning of each fiscal year, an annual budget and forecast for such fiscal year, prepared on a quarterly basis.
(2) The Company shall permit each Major Investor, at such Major Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by the Major Investor.
(3) The Company shall not be obligated under this Section 3 to provide any information that (i) it deems in good faith to be a trade secret or similar confidential information or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel, as advised by counsel.
Delivery of Financial Statements; Inspection Rights. (a) The Company shall deliver to each Lender:
(i) as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company (beginning with the fiscal year ending December 31, 2021), an income statement for such fiscal year and a balance sheet of the Company, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by independent public accountants of nationally recognized standing selected by the Company;
(ii) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement and statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (A) be subject to normal year-end audit adjustments and (B) not contain all notes thereto that may be required in accordance with GAAP);
(iii) as soon as practicable, but in any event at least thirty (30) days prior to the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets, income statements and statements of cash flows for such months and, as soon as prepared, any other budgets or revised budgets prepared by the Company;
(iv) as soon as practicable, but in any event within thirty (30) days after the end of each fiscal quarter of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Lenders to calculate their respective percentage ownership in the Company;
(v) such other information relating to the financial condition, business or corporate affairs of the Company as the Requisite Noteholders may from time to time reasonably request; provided, however, that the Company shall not be obligated u...