PROSPECTUS
SUMMIT SECURITIES, INC.
$40,000,000 Investment Certificates, Series A
150,000 Shares Variable Rate Cumulative
Preferred Stock, Series S-3
($100 Per Share Offering Price
and Liquidation Preference)
The Investment Certificates, Series A ("Certificates") and the
shares of Variable Rate Cumulative Preferred Stock, Series S-3
("Preferred Stock") of Summit Securities, Inc. ("Summit") are being
offered separately and not as units. A Certificateholder may elect to
receive interest monthly, quarterly, semi-annually or annually,
without compounding; or, at the election of a Certificateholder, if
interest is left with Summit it will compound semi-annually until
maturity; or, at the election of the Certificateholder the
Certificates will pay equal monthly installments of principal and
interest until maturity according to an amortization schedule
selected by the owner. The Certificates are unsecured debt
instruments, senior in liquidation to outstanding equity securities,
subordinated to collateralized debt, on parity with unsecured
accounts payable and accrued liabilities and on parity with all
previously issued and outstanding investment certificates. At
September 30, 1996 the Consolidated Group had approximately
$67,717,000 of debt senior to and approximately $1,367,000 of debt in
parity with the approximately $42,824,000 of outstanding
Certificates. The Certificates will be issued in fully negotiable
form in fractional denominations of $0.01 or multiples thereof at
100% of the principal amount paid. Summit reserves the right to
change, prospectively, by way of supplement to this Prospectus, the
interest rates, maturities, and minimum investment amounts on unsold
Certificates. The current provisions are set forth below. See
"DESCRIPTION OF CERTIFICATES".
<TABLE>
<CAPTION>
INVESTMENT CERTIFICATES, SERIES A
<S> <C> <C>
MINIMUM TERM TO MATURITY ANNUAL INTEREST RATE
INVESTMENT 12-23 MONTHS 6.500%
$100 24-35 MONTHS 6.750%
$100 36-47 MONTHS 7.000%
$1,000 48-59 MONTHS 7.500%
$1,000 60-71 MONTHS 8.500%
$1,000 72-120 MONTHS 8.875%
$100
INSTALLMENT CERTIFICATES, SERIES A
$2,000 60-120 MONTHS 6.750%
PREFERRED STOCK, SERIES S-3
PRICE PER SHARE DISTRIBUTION FORMULA (Applicable Rate)
$100.00 The greater of the per annum rate of
the Three-month U.S. Treasury Bill
Rate
the Ten Year Constant Maturity
Rate, or
the Twenty Year Constant Maturity
Rate,
Plus .5% (Minimum 6%/Maximum 14%
</TABLE>
The Preferred Stock offered hereunder will be sold in whole or
fractional units. Preferred Stock distributions are cumulative and
are to be declared and paid monthly. See "DESCRIPTION OF PREFERRED
STOCK-Distributions". Preferred Stock may be redeemed, in whole or
in part, at the option of Summit at the redemption prices set forth
herein. Under certain limited circumstances, the Board of Directors
may, in its sole discretion and without any obligation to do so,
redeem shares tendered for redemption by stockholders. See
"DESCRIPTION OF PREFERRED STOCK-Redemption of Shares". In
liquidation, Preferred Stock is subordinate to all debts of Summit
including Summit's Certificates, on parity with other preferred stock
and senior to Summit's common stock. See "DESCRIPTION OF PREFERRED
STOCK-Liquidation Rights".
There is no trading market for the Certificates or the Preferred
Stock and none is expected to be established in the future. See
"RISK FACTORS". A list of persons willing to sell or purchase
Summit's issued and outstanding shares of preferred stock is
maintained by Metropolitan Investment Securities, Inc., ("MIS") as a
convenience to holders of Summit's preferred stock. See "DESCRIPTION
OF PREFERRED STOCK-Redemption of Shares". This offering of
Certificates and Preferred Stock is subject to withdrawal or
cancellation by Summit without notice. No minimum amount of
Certificates or Preferred Stock must be sold.
FOR A DISCUSSION OF MATERIAL RISKS ASSOCIATED WITH THE
CERTIFICATES AND PREFERRED STOCK OFFERED HEREBY SEE RISK FACTORS ON
PAGE 18 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO ISSUER
DISCOUNTS AND OR OTHER PERSONS (2)
PRICE TO COMMISSIONS
PUBLIC (1)
<S> <C> <C> <C>
Per 100% 0% to 6% 100% to 94%
Certificate
Total: $40,00,000 None- $40,000,000-
$2,400,000 37,600,000
Per Preferred $100 0% to 6% 100% to 94%
Share
Total: $15,000,000 None - $15,000,000-
$900,000 $14,000,000
</TABLE>
(1) There is no direct sales charge to the investor.
Certificates earn interest, and Preferred Stock distributions are
calculated on their full respective offering prices, without
deduction. Summit will reimburse MIS, a wholly-owned subsidiary, for
commissions paid to licensed securities sales representatives. Sales
commission rates on the sale of Certificates depend upon the terms of
the sale and upon whether the sales are reinvestments or new
purchases. See "PLAN OF DISTRIBUTION".
(2) Before deducting other expenses estimated at $570,000.
The Certificates and Preferred Stock are being offered for sale
on a continuous, best efforts basis. There are no minimum amounts of
securities that must be sold. No offering will be made pursuant to
this Prospectus subsequent to January 31, 1998. The offering is
subject to NASD Rule 2720 (formerly Schedule E). See "PLAN OF
DISTRIBUTION".
The date of this Prospectus is April 28, 1997.
No person has been authorized to give any information or to make
any representations not contained or incorporated by reference in
this Prospectus and any Pricing Supplement. Neither the delivery of
this Prospectus and any Pricing Supplement nor any sale made
thereunder shall, under any circumstances, create any implication
that the information therein is correct at any time subsequent to the
date thereof. This Prospectus and any Pricing Supplement shall not
constitute an offer to sell or a solicitation of an offer to buy any
of the Certificates or Preferred Stock offered hereby by anyone in
any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation
is not qualified to do so or to any person to whom it is unlawful to
make such offer or solicitation.
AVAILABLE INFORMATION
Summit is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act")and,
in accordance therewith, files periodic reports and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports and other information filed by Summit with the Commission can
be inspected and copied at the public reference facilities maintained
by the Commission in Washington, D.C. at 450 Fifth Street, N.W.,
Washington, DC 20549 and at certain of its regional offices which are
located in the New York Regional Office, Seven World Trade Center,
Suite 1300, New York, NY 10048, and the Chicago Regional Office,
CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661-2511. In addition, the Commission maintains a World Wide Web
site that contains reports, proxy and information statements and
other information regarding registrants, such as the Issuer, that
file electronically with the Commission at the following address:
(http:\\www.sec.gov).
Summit has filed with the Securities and Exchange Commission in
Washington, D.C., a Registration Statement on Form S-2 under the
Securities Act of 1933, as amended, with respect to the securities
offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, as permitted by
the rules and regulations of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are
incorporated herein by reference in this prospectus:
(a) Annual report on Form 10-K for the fiscal year ended September
30, 1996 (filed January 13, 1997);
(b) Quarterly report on Form 10-Q for the three month period ended
December 31, 1996 (filed February 19, 1997).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
Summit will provide without charge to each person, including to
whom a Prospectus is delivered, upon written or oral request of such
person, a copy of any and all of the information that has been
referenced in this Prospectus other than exhibits to such documents.
Requests for such copies should be directed to Corporate Secretary,
Summit Securities, Inc., PO Box 2162, Spokane, WA 99210-2162,
telephone number (509) 838-3111.
TABLE OF CONTENTS
Page
Available Information.............................
Incorporation of Certain Documents by Reference...
Prospectus Summary ...............................
Summary Consolidated Financial Data...............
Risk Factors......................................
Description of Securities.........................
Description of Certificates..................
Description of Capital and Common Stock......
Description of Preferred Stock...............
Relative Rights of Common Stock..............
Legal Matters.....................................
Legal Opinion................................
Legal Proceedings............................
Experts...........................................
Plan of Distribution..............................
Use of Proceeds...................................
Capitalization....................................
Selected Consolidated Financial Data..............
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................................
Business..........................................
Management........................................
Executive Compensation.......................
Indemnification...................................
Principal Shareholders............................
Certain Relationships and Related Transactions.
Index to Consolidated Financial Statements........
PROSPECTUS SUMMARY
This summary is qualified in its entirety by reference to, and
should be read in conjunction with, the detailed information and
financial statements appearing elsewhere in this Prospectus. This
offering involves certain investment considerations for prospective
investors which are set forth in "DESCRIPTION OF SECURITIES" & " RISK
FACTORS".
The Summit Consolidated Group of Companies
Summit Securities, Inc.(Summit) was incorporated under the laws
of the State of Idaho on July 25, 1990. Its principal executive
offices are located at 929 West Sprague Avenue, Spokane WA 99210-
2162. Its mailing address is PO Box 2162, Spokane WA 99210-2162 and
its telephone number is (509) 838-3111. Summit also maintains an
office at 8601 W. Emerald, Ste. 150, Boise, Idaho 83704 and its
telephone number is (208)376-8260.
Where reference herein is intended to include Summit Securities,
Inc. and its subsidiaries, they are jointly referred to as the
"Consolidated Group". Where reference herein is intended to refer to
Summit Securities, Inc. as the parent company only, it is referred to
individually as "Summit".
Summit was founded in 1990 by Metropolitan Mortgage & Securities
Co., Inc. (Metropolitan) as a wholly-owned subsidiary. On September
9, 1994, Summit was acquired by National Summit Corp., which is
wholly-owned by C. Paul Sandifur, Jr. Mr. Sandifur is President and
controlling shareholder of Metropolitan. Accordingly, the change in
ownership altered the form of control, but did not result in a change
of the individual in control. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS".
Between January and June of 1995, Summit acquired MIS and a
wholly-owned holding company acquired Old Standard Life Insurance
Company (Old Standard) from Metropolitan. In addition, Summit
commenced operation of a property development company, Summit
Property Development Inc. On December 28, 1995, Old Standard
acquired Arizona Life Insurance Company ("Arizona Life"). See
"BUSINESS" & "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".
The Consolidated Group is engaged, nationwide, in the business
of acquiring, holding and selling receivables (hereinafter
Receivables). These Receivables include real estate contracts, and
promissory notes collateralized by first position liens on
residential real estate. The Consolidated Group also invests in
Receivables consisting of real estate contracts and promissory notes
collateralized by second and lower position liens, structured
settlements, annuities, lottery prizes, and other investments. The
Receivables collateralized by real estate are typically non-
conventional in that they were originated as the result of seller
financing, or they were originated by institutional lenders who
specialize in borrowers with impaired credit histories. See
"BUSINESS-Receivable Investments". In addition to Receivables, the
Consolidated Group invests in U.S. Treasury obligations, corporate
bonds and other securities. See "BUSINESS-Securities Investments".
The Consolidated Group invests in Receivables using funds
