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"How To Take Your Company Public"



Do It Yourself!

Take Your Company Public

For Under $20,000.00

Even a Start up!












Copyright 2018 by Jack Ferm JD

All rights reserved











Prologue


Until now Going public has been shrouded in mystery, and besieged, and beleaguered with costs. Where do I begin? What do I do? I don’t have the $200,000 or more to pay an attorney to take my company public…

Guess what, you don’t need $200,000; you don’t even need $100,000 or $50,000. You can accomplish this, being a publicly traded company for $20,000! And you will learn how to go public for this small amount in this book.

NOTE: Caveat, this $20,000 figure is an approximate figure and may increase or decrease depending on the Dollar amount you seek to raise and weather and as costs go up periodically.


Actually, you can have your company registered with the SEC and listed on an exchange for as little as $6,000.00. That six thousand dollars would include the CPA Audit, the Opinion letter of counsel, and having the offering circular filed through EDGAR, [see glossary of terms] so the $20,000.00 isn’t all necessary at one time. Keep in mind the following, the offering circular is like a question and answer format, so you don’t have to be an attorney to complete the document, any paralegal, accountant or lay person who can read and understand English can complete it; just as a lay person can prepare a bankruptcy petition, and of course if it’s your own company, you have that right anyway.


You can finance your own Public company with credit cards, or with family and friends taking shares in your new company! Imagine 15 to 20 family members and or friends each investing $1,000.00 in your new company and with an unlimited potential return. That is, providing you have a viable idea, a product or service that investors would like to invest in, or an acquisition of an existing company or income producing property. The concepts for publicly traded companies are diverse and only limited by the human imagination


Example: assuming you gave each initial investor, for their $1,000.00, 100,000 shares of your class “A” common stock. That’s a penny a share; let’s also assume the shares will trade within 24 months for a minimum of $0.50 a share. The $1,000.00 investment would be worth $50,000.00…


That’s a handsome profit isn’t it?


NOTE: Under SEC Rule 144 any one who is a founder because they provided seed money to the company but are NOT control individuals may have the restriction on the reverse side of their security removed and trade the shares after only six [6] months. They will require an opinion letter from an attorney which is generally around $250.00 that letter and stock certificate are then forwarded to the transfer agent and the legend removed, the stock can then be traded by your broker.


Typically, today an attorney will charge from $150,000 to $500,000 and take a large percent of your company stock, sometimes as much as 20%. Why… because they have the knowledge that you didn’t have until now…

The fee attorneys charge is always paid in advance, which makes it almost impossible but for the well financed company, or individual to take that step. It also makes it next to impossible for a start up company to take that leap.

Yet, there is no great mystery in becoming a publicly traded company- Only a lack of knowledge on how to get there!

Going Public is easier then you could imagine! And the benefits far outweigh reasons not to consider this method to finance your company or your product, or your start up project. Today one has to be creative to make money, and investors love creativity, especially if they like your idea.

Remember this; there are three types of stock traders, those that are buying for an immediate profit, those that are buying to share in the company profits through dividends, and those that are looking both to make a profit on your company shares and to receive dividends.

Anyone who has attempted to obtain financing for a commercial project will understand the dilemma of seeking a loan, if you don’t need the money, it is available, but if you really need a loan; what do you have for collateral, let’s see your business plan, do you have an executive summary…how much skin do you have in the project, what does your tax returns look like for the past three [3] years, and let’s have a look at your resume…. Sticking points yes, and the reason this economy is at a standstill. Yes, there is money out there, but not for the start up, at least not from most lending sources.


Also, if you’re going to look for money from commercial brokers and lenders, I recommend complete honesty, there is nothing more upsetting to all involved then when you have made material misrepresentations that the Lender WILL discover and turn your loan down…wasting everyone’s time while you end up being let down hard and depressed!

There is a real need for business start ups…

In an article released by (CNSNews.com) on October 22, 2013 and based on data released by the Bureau of Labor Statistics- The number of Americans who were 16 years or older and who were not participating in the nation's labor force had climbed by September 2013 to a record 90,609,000 as of March 2014 that number was more than 91,000,000. By May of 2018 that decline increased to 95,915,000 American’s no longer in the workforce. We currently have a work force participation rate of 62.7% or 161,539,000. A rate that has remained fairly constant since early 2017. The employment-population ratio, is currently at 60.4 percent,

In January 2009, when President Barack Obama took office, there were 80,507,000 Americans not in the labor force. Moreover, the number of Americans not in the labor force has increased by almost 11,000,000 during Obama's presidency. That number is both chilling and still climbing even under President Trump. Yet we are told it’s because of baby boomers retiring…I don’t buy that argument, today retiring baby boomers don’t have the resources to live on a retirement income, and in some states, it has been reported that a minimum of 1/3rd of seniors over age 60 are still working. In fact, more people are working into their 70’s out of necessity

The number of people actually employed as of March 2014 was 145,266,000 which means the US Labor force that is available for work after deducting those that are really out of the workforce due to retirement or, is really 152,097,938 plus another 36,661,876 that are still looking for work but not being counted for unknown reasons. Imagine if each of these people were back to work and each paid $2,000.00 in federal income taxes that would amount to $377,423,628,000 in additional taxes plus the additional goods and services they would require.

Today we have just over 161 million people employed, yes, the rate is higher, but we also have more people able to work, that for whatever reason aren’t working

But the US is lucky to employ a mere 1,860,000 people annually, while new members of society graduate colleges and then are absorbed into the labor pool, thus increasing the number of people that are available to work. This is a game of catch up that is impossible to win. It appears that more people are coming into the labor force or labor pool then are being employed; we are falling further and further behind each year. But we are told a different story. But, figures don’t lie.

Example:

Annual birth rate:

3,888,000

Annual immigration:

777,600

Total annual population increase:

4,665, 600

Less annual death rate

2,592,000

Net population increase

2,073,600

Example 2:

During the 2013–14 school year, colleges and universities are expected to award the Following number of degrees

Associate’s degrees

943,000

Bachelor's degrees

1,800,000

Master's degrees

778,000

Doctor's degrees

177,000

Total new degrees

3,698,000

* This does not include non-degreed members of society entering the work force.

** During this period, record 21.8 million students were expected to attend American colleges and universities, they will be joining the work force shortly.

Example 3:

students expected to attend college

public 2-year institutions

7,500,000

private 2-year colleges

500,000

public 4-year institutions

8,200,000

private 4-year institutions

5,600,000

Total enrollment

21,800,000

* 8,000,000 of these students will be entering the workforce in 2016

* 13,800,000 students will be entering the work force in 2018

*** We have a minimum annual population increase of 2,072,600

Increases in the traditional college-age population and rising enrollment rates have contributed to the increase in college enrollment. Between 2000 and 2011, the 18- to 24-year-old population rose from approximately 27.3 million to approximately 31.1 million. The percentage of 18- to 24-year-olds enrolled in college also was higher in 2011 (42.0 percent) than in 2000 (35.5 percent) this fall, these traditional college-age students will be joined by around 8.7 million older students ages 25 and over all looking for employment.

Yes, we do have some people leaving the workforce; each and every day 10,000 baby boomers are turning 65. Unfortunately, only a small percentage have enough in reserve to actually retire, but some do. Assuming that half of these baby boomers are able to, and actually will retire, that means 1,800,000 people will or may leave the work force and actually retire. Meanwhile another 13,771,000 people can be expected to be added to the work force this year.

Remember we are finding jobs for about 1,860,000 people annually, while another 1,800,000 are leaving the workforce and retiring. This is leaving a shortfall of 10,111,000 jobs needed on a current basis just to keep up with the workforce population increase. In short, we need to create 842,583 jobs each and every month just to maintain the status quo and twice this number if we are to regenerate the US economy.

Can you see a problem, those entering the workforce far out number those leaving it! Moreover, the unemployment numbers are actually increasing rather then declining. In all honesty we have to include everyone that desires to work whether they have given up looking because there are no jobs, or newly entering the workforce. Statistics can and are being manipulated.

Is there an option?

Yes, there is an option, start your own business…be creative…I will teach you how to generate the money to start a viable business that can also help to reduce our real unemployment that economists finally admit was a real 15.6% and some are saying even higher, myself included, my figures show the real unemployment rate during the Obama presidency was over 19%

Just a couple of years ago small business owners were almost completely shut out by banks that had pretty much stopped lending to all but the most credit worthy long term and successful businesses. That opened the door for more alternative players to enter the scene. Crowd funding, has become a viable source of small business access to capital resources, crowd funding sites like Indiegogo.com, and Kickstarter.com

But for real capital like $1,000,000 and up, unless you have assets of at least twice that amount [not including your home] there are lenders far and few in-between that will even look at your project, unless you have 35% equity in the project and are at a minimum 5% liquid

A Typical project [a construction project] that will cost $5,000,000 will require you to have your own money in that project of $1,750,000 and have another $162,500 in a bank account…If you have this, you can get a bridge loan to complete your project, then a take-out loan which would be long term. Typically, a Bridge loan will provide capital for one to two years.

Assuming you are seeking to acquire a commercial property, you would need 10% to 25% of your own money in the acquisition, and there are options depending on your credit score, those options might include the SBA.

But for a real start up with little capital but a good concept there may be only one option available, and that is to actually file for and become a publicly traded company and to raise money through stock investors.

Today the interest of government is not about job creation, but wealth creation. It may be that the stock market is the last opportunity to generate wealth, as well as retirement income. For that reason, I believe more people are turning to that investment tool and searching for viable companies’

NOTE: each and every work day between 5 and 10 IPO’s are filed with the SEC through their EDGAR electronic filing system, which means that annually, between 1200 and 2400 companies are becoming publicly traded.

As this is a real alternative, I want to say here, that if you can fill out an employment application, you have the ability to prepare the necessary paperwork to take your company public, with only the actual costs required. I will outline and discuss those costs in detail as we move forward.


I will also provide you line by line, item by item information taking you through the entire process. “There is no great mystery…there was until now, only a lack of knowledge!”


DISCLAIMER: This book is intended to provide general educational information about the subject matter covered. It is not meant to provide legal opinions, offer advice, or serve as a substitute for advice by licensed, legal professionals. This book is sold with the understanding that the author is not engaged in rendering legal or other professional services.

The author and publisher does not warrant that the educational information in this book is complete or accurate and does not assume and hereby disclaims any liability to any person for any loss or damage caused by errors, inaccuracies or omissions, or usage of the educational information.

Laws and interpretations of laws change frequently and the subject matter of this book has important legal consequences. If not understood, legal, tax, or other counsel should be consulted. All risk of loss or damage is solely that of the user of this educational information and the author disclaims any liability thereof.

CHAPTER ONE:


AN ECONOMIC CRISIS IS LOOMING IN AMERICA


The US is facing the greatest retirement crisis the world has ever witnessed. Baby Boomers are already slipping into poverty. They are for the most part too poor to retire. Many of retirement age are even now working into their 70’s and beyond

Statistics show that a full Seventy five percent of those turning 65 have inadequate savings; the average 401(k) balance has been estimated at less then $30,000.00. $30,000.00 supplementing Social Security that averages about $1269 a month won’t go very far, and from this deduct for Medicare coverage, which the cost of, continue to rise.

The signs of the retirement crisis are all around you. Simply look at who’s bagging your groceries: or working behind the counter at your local fast food franchise; or greeting you at Wal-Mart; is it a young high school kid, or an older “retiree” who had to go back to work to supplement his income or health insurance?

What happened?

Corporate pensions have been virtually eliminated while the nation’s public pensions are in jeopardy as states have struggled to survive and fend off the prospects of bankruptcy. We are living longer and are financially enjoying it less.

Example: These eight [8] cities have already filed for Bankruptcy

-- City of Detroit

-- City of San Bernardino, Calif.

-- Town of Mammoth Lakes, Calf. (Dismissed)

-- City of Stockton, Calif.

-- Jefferson County, Ala.

-- City of Harrisburg, Pa. (Dismissed)

-- City of Central Falls, R.I.

-- Boise County, Idaho (Dismissed)

* In fact, 24 cities and municipalities have filed for Bankruptcy protection since 2010

As of April 2018, more than 67 Million Americans are receiving Social Security benefits, totaling $80,690,000,000.

Social Security is the major source of income for most of the elderly.

Social Security Facts.

An estimated 163 million workers are covered under Social Security.

In 1940, the life expectancy of a 65-year-old was almost 14 years; today it is more than 20 years.

By 2033, the number of older Americans will increase from 45.1 million today to 77.4 million.

There are currently 2.8 workers for each Social Security beneficiary. By 2033, there will be 2.1 workers for each beneficiary.

Will you be able to retire and live on Social Security? Of course not, so what is the answer?

Why hasn’t congress or the White House focused on the real problem, don’t they understand it or see it coming? America needs jobs, real jobs, not outsourcing that has defined what we have become, a nation slipping into poverty for all but the very few among us.

The real problem is a lack of planning by our elected officials; conservatives are trying to pare back our so-called entitlements while liberals have failed to acknowledge the crisis or propose any solutions. Meanwhile more Americans are now uninsured, receive Welfare and food stamps then at ant time in our history.

There are virtually no jobs that are paying a decent wage, and our standard of living has slipped dramatically. America finishes 17 out of 19 on the Human poverty index, with only two countries in worse financial condition then us, Ireland and Italy.

According to a 2011 U.S. Department of Agriculture report, of the 40 million people receiving food stamps (now called SNAP), about 23 million worked. Working and getting welfare is not uncommon.

Children Age 0-5= 24.7 million (from child stats Government)

Children Age 5-11= 24.7

Children Age 12-17 = 24.9


Current US Population

326,631,110 and counting

Births every 8 seconds daily count

10,800

Deaths one every 12 seconds daily count

7,200

US Immigrants enter the US daily every 40 seconds

2,160

Children under 18 years

- 73,642,285

US workers employed

127,340,000

People out of the work force

95,000,000

People on Welfare presumed not to be working

15,000,000

People on Social Security and SS Disability

67,000,000


* US Welfare recipients can also work




CHAPTER TWO:

RAISING SEED MONEY THROUGH EXEMPTIONS


The rules of society are in place to make us jump through hoops, and the reason is to protect the public from scams operated by those that prey on society. Unfortunately, scams are more common then we would like to admit, always have been and always will be. If we don’t have rules there would be even more scam operators out there, then currently taking advantage of the elderly and their financial weaknesses.

Scammers will always primarily prey on the elderly because in those cases, where they are successful, the senior was in a desperate situation and wasn’t thinking clearly. For that reason, both the SEC and the State counterparts require that even family and friends before investing in your company have sufficient knowledge of your plans before they can make even a small investment.

In short, even when setting up a new company, there must be some exemption that allows individuals and companies to invest in or to finance it!

The intrastate offering exemption is one opportunity. (Investors are all from a single state) it applies even if there is only one person in the company. This offering exemption allows, at the Federal Level and state level, for investors to invest in your company. The SEC cannot reach the company who is registered in a single state and all of their investors are from that same state, as the Jurisdiction of the SEC extends only to interstate commerce. The state may require you to complete a form and, in some cases, pay a small fee.

But, what if you have a relative in another state who wants to invest in your company? This exemption then is not available. Instead the SEC has another exemption that is, “the family and friend’s exemption” the 4(2); 15 U.S. Code § 77d (2) exemption that requires only a well informed and sophisticated investor. In short, Transactions by an issuer not involving any public offering.

The terms a “well informed and sophisticated investor” has been defined by the state of Texas as follows:

The term "well-informed" could be satisfied through the dissemination of printed material to each purchaser prior to his or her purchase, which by a fair and factual presentation discloses the plan of business, the history, and the financial statements of the issuer, including material facts necessary in order that the statements made, in the light of circumstances under which they are made, not be misleading.

In determining who is a sophisticated investor at least the following factors should be considered: (i) the financial capacity of the investor, to be of such proportion that the total cost of that investor's commitment in the proposed investment would not be material when compared with his total financial capacity. It may be presumed that if the investment does not exceed 20% of the investor's net worth (or joint net worth with the investor's spouse) at the time of sale that the amount invested is not material, (ii) Knowledge of finance, securities, and investments, generally, (iii) Experience and skill in investments based on actual participation.

Most states have already adopted the ULOE (Uniform Limited Offering Exemption) the counterpart to SEC section 4(2) that provides a safe harbor for investors in their jurisdiction. The language is fairly standard with minor variations from state to state relating to the number of investors you may approach and sell your securities to.


The typical language of the ULOE as expressed by the state of Hawaii is:


Any transaction pursuant to a sale or an offer to sell securities of an issuer, if the transaction is part of an issue in which: (A) There are no more than twenty-five purchasers, wherever located, during any twelve consecutive months; (B) The issuer reasonably believes that all purchasers wherever located, are purchasing for investment purposes and not with the view to, or for sales in connection with, a distribution of the security. The purchase shall be presumed to be made with a view to distribute and not to invest if any resale of a security sold in reliance on this exemption is within twelve months of sale, except a resale pursuant to a registration statement effective under section 485A-301, or to an accredited investor pursuant to an exemption available under this chapter; (C) No commission, discount, or other remuneration is paid or given, directly or indirectly, to a person, other than a broker-dealer or agent registered under this chapter, for soliciting a prospective purchaser in this State; and (D) The securities of the issuer are not offered or sold by general solicitation or any general advertisement or other advertising medium;


Another example from the state of Indiana:


A sale or an offer to sell securities of an issuer, if the transaction is part of a single issue in which:
            (A) not more than twenty-five (25) purchasers are present in this state during any twelve (12) consecutive months…;
            (B) a general solicitation or general advertising is not made in connection with the offer to sell or sale of the securities;
            (C) a commission or other remuneration is not paid or given, directly or indirectly, to a person other than a broker-dealer registered under this article or an agent registered under this article for soliciting a prospective purchaser in this state; and
            (D) the issuer reasonably believes that all the purchasers in this state, are purchasing for investment


Some states require a small filing fee other do not. Some states require notice of the proposed sale, usually a letter notice, some require filling out a form they provide. The filing fee can amount to as little as $25.00 (California) to $300.00 and in many states no fee.


I have provided a sample Private Placement Memorandum (PPM) under the SEC 4(2) exemption and the ULOE state counterparts. I have also provided the list of states and their Law citations therein to be added to the PPM as required.

There are other exemptions that I want to address briefly, Regulation “D”, Regulation “S” and Regulation “A”.

Regulation “A” still requires a filing with the SEC. It is an exemption from the registration requirements mandated by the Securities Act, applicable to small public offerings of securities that do not exceed $5 million in any 12-month period. The act has been amended and now allows for a public raise up to $50,000,000. A company that uses the Regulation “A” exemption for a securities offering must still file an offering statement with the Securities and Exchange Commission. Regulation “A” offerings share many characteristics with registered offerings. The SEC provides the Form for preparing the Regulation “A” offering

The Regulation “S” offering exemption is an exemption from registration where the offerees are non-US Citizens and are living in another country. The pitfalls are a lack of knowledge with foreign country Securities laws rules and regulations that could come back to bite you.


Regulation “D” has four parts the 504, 505, 506, and 506C. A Regulation D offering is intended to make access to the capital markets possible for small companies that could not otherwise bear the costs of a normal SEC registration. (The $150,000 to $500,000 we discussed above) The regulation is found under Title 17 of the Code of Federal Regulations, part 230, Sections 501 through 508. The legal citation is 17 C.F.R. §230.501 et seq (et seq. meaning and the following)

Rule 501 contains definitions that apply to the rest of Reg D. Rule 502 contains the general conditions that must be met to take advantage of the exemptions under Regulation D. Generally speaking, these conditions are (1) that all sales within a certain time period that are part of the same Reg D offering must be "integrated", meaning they must be treated as one offering, (2) information and disclosures must be provided, (3) there must be no "general solicitation", and (4) that the securities being sold contain restrictions on their resale. Rule 503 requires issuers to file a Form D with the SEC when they make an offering under Regulation D. In Rules 504 and 505, Regulation D implements §3(b) of the Securities Act of 1933 (also referred to as the '33 Act), which allows the SEC to exempt issuances of under $5,000,000 from registration. It also provides (in Rule 506) a "safe harbor" under §4(2) of the '33 Act (which says that non-public offerings are exempt from the registration requirement). In other words, if an issuer complies with the requirements of Rule 506, they can rest assured that their offering is "non-public," and thus that it is exempt from registration. Rule 507 penalizes issuers who do not file the Form D, as required by Rule 503. Rule 508 provides the guidelines under which the SEC enforces Regulation D against issuers. The form D will also need to be filed with the states in which you intend to raise money along with a filing of generally between $300 and $500 dollars in each state where you intend to approach investors.

The 504 can also be prepared on a form U7 or a PPM (Private Placement Memorandum) can be developed for it, the limits of a raise are $1,000,000 in any 12-month period, and it must be submitted to the state along with an application fee prior to raising money. The State must approve it, and you are not allowed to raise money through advertising.

The 505 also requires a PPM and also that it is submitted to the State for prior approval along with a filing fee. This is required for each state where you intend to raise money. The limit of the offering is $5,000,000 in any 12-month period. Again, Public offerings are not allowed

The 506 has two parts, the 506b and the new 506c. The 506b is also exempt under 4(5) of the securities act as long and all investors are accredited investors as defined in rule 501 and there is no public advertising. The 506c allows for advertising and also requires the PPM or literature that provides the same information.

The 506b can solicit any number of accredited investors with only a subscription agreement, however as the rule also provides for up to 35 non-accredited investors, in case you take individual investors who are non-accredited you will be required to use a PPM or other literature that makes the same disclosures.

Incidentally, officers and directors of your company whatever their standing financially are considered accredited investors.

Given the choices for start up or seed money capitalization my preference is the 4(2) 77d2 exemption, and then a full public registration for a real money raise sufficient to fully develop your company model.

CHAPTER THREE



THE BENEFITS OF BEING A PUBLIC COMPANY


There are many advantages for a company going public.


1. The financial benefit in the form of ability to raise capital.


2. Capital raised can be used to fund research and development, fund capital expenditure or even used to pay off existing debt.


3. An increased public awareness of the company by making their products known to a new group of potential customers.


4. An IPO also may be used by founding individuals as an exit strategy. Many venture capitalists have used IPOs to cash in on successful companies that they helped start-up.


5. Increased company and stock valuation,


6. The ability to use public stock as currency for acquisitions and assets,


7. Increased prestige


8. To reduce the need for expensive venture capital and other financing sources.


9. instant credibility and a benchmark trading/capital raising price


10. companies are typically valued much higher the moment they go public, than their private counterparts


11. increased liquidity for founders and shareholders


12. Greater Access to Capital


13. Cheaper to Raise Capital


14. Greater Employee Attraction and Retention

15. Ability to Utilize Stock to Make Acquisitions

Being a public company is an exciting and rewarding experience that opens many opportunities for both you and your company.



CHAPTER FOUR


HOW TO BECOME A PUBLICLY TRADED COMPANY!


As a new company there are not many options, unless you have assets that are valued at $75,000,000 or more and have a sufficient number of shareholders along with a public float. Your choice will be either the Bulletin Board or the Pink Sheets or both. As for me, my recommendation is both.

To list on the Bulletin Board, you will be required to file a registration form.

SEC Registration Forms for US issuers

FORM S1

This form is used where there are no other forms available that meet the needs of the registrant. The S1 form is the initial registration form for most all new securities being registered with by the Securities and Exchange Commission (SEC) for public offerings. Any security that meets the criteria and there is no specific form for use must have an S-1 filing before shares can be listed on a national exchange.

This will be the starting point for most new companies unless you intend to acquire and hold real estate, then form S 11 would be proper, if you intend to acquire another company then form S 4 would be proper.

Form S-3

This form is used for registrant and transaction requirements for any registrant which has a class of securities already filed with the Securities and Exchange commission.

Form S-4.

This Form may be used for registration under the Securities Act of 1933 (“Securities Act”) of securities to be issued (1) in a transaction of the type specified in paragraph (a) of Rule 145 (§230.145 of this chapter); (2) in a merger in which the applicable state law would not require the solicitation of the votes or consents of all of the security holders of the company being acquired; (3) in an exchange offer for securities of the issuer or another entity; (4) in a public reoffering or resale of any such securities acquired pursuant to this registration statement; or (5) in more than one of the kinds of transaction listed in (1) through (4) registered on one registration statement.




Form S-6.

This form may be used for registration under the Securities Act of 1933 of securities of any unit investment trust registered under the Investment Company Act of 1940 on form N-8B-2.

Form S-8

This form is used for any registrant that, immediately prior to the time of filing a registration statement on this Form, is subject to the requirement to file reports pursuant to Section 13 (15 U.S.C. 78m) or 15(d) (15 U.S.C. 78o(d)) of the Securities Exchange Act of 1934 (“Exchange Act”); has filed all reports and other materials required to be filed by such requirements during the preceding 12 months (or for such shorter period that the registrant was required to file such reports and materials); is not a shell company (as defined in §230.405 of this chapter) and has not been a shell company for at least 60 calendar days previously (subject to the exception in paragraph (a)(7) of this Instruction A.1.); and if it has been a shell company at any time previously, has filed current Form 10 information with the Commission at least 60 calendar days previously reflecting its status as an entity that is not a shell company (subject to the exception in paragraph (a)(7) of this Instruction

Form S-11.

This form is used for registration under the Securities Act of 1933 of (i) securities issued by real estate investment trust, as defined in Section 856 of the Internal Revenue Code, or (ii) securities issued by other issuers whose business is primarily that of acquiring and holding for investment real estate or interests in real estate or interests in other issuers whose business is primarily that of acquiring and holding real estate or interest in real estate for investment. This form shall not be used, however, by any issuer which is an investment company registered or required to register under the Investment Company Act of 1940. In addition, this form shall not be used for an offering of asset-backed securities, as defined in 17 CFR 229.1101.

Form S-20

This form may be used for registration of standardized options under the Securities Act of 1933 (“Securities Act”) provided that the registrant undertakes not to issue, clear, guarantee or accept an option registered on Form S-20 unless there is a definitive options disclosure document meeting the requirements of Rule 9b-1 of the Securities Exchange Act of 1934 with respect to the options class.


(A.1.), may use this Form for registration under the Securities Act of 1933 (“Act”) (15 U.S.C. 77a et seq.) of the following securities:

(a) Securities of the registrant to be offered under any employee benefit plan to its employees or employees of its subsidiaries or parents. For purposes of this form, the term “employee benefit plan” is defined in Rule 405 of Regulation C (230.405).

To compliment the S1, and to be registered as a fully reporting company you would also at the same time or prior file Form 8A or Form 10

Form F-1 is used for registration under the Securities Act of 1933 (“Securities Act”) of securities of all foreign private issuers as defined in Rule 405 (§230.405 of this chapter) for which no other form is authorized or prescribed.

Example Forms 3, 4, and 5

Corporate insiders – meaning a company's officers and directors, and any beneficial owners of more than ten percent of a class of the company's equity securities registered under Section 12 of the Securities Exchange Act of 1934 – must file with the SEC a statement of ownership regarding those securities. On August 27, 2002, the SEC adopted rules and amendments to Section 16 of the Exchange Act, implementing the provisions of the Sarbanes-Oxley Act of 2002 that accelerated the deadline for filing most insider ownership reports [This comes into play for the Bulletin Board but not for the Pink Sheets]

These are the forms you should become familiar with.

Form 3

The initial filing is on Form 3. An insider of an issuer that is registering equity securities for the first time under Section 12 of the Exchange Act must file this Form no later than the effective date of the registration statement. If the issuer is already registered under Section 12, the insider must file a Form 3 within ten days of becoming an officer, director, or beneficial owner.

Form 4

Changes in ownership are reported on Form 4 and must be reported to the SEC within two business days. You can find the limited categories of transactions not subject to the two-day reporting requirement in the new rule.

Form 5

Insiders must file a Form 5 to report any transactions that should have been reported earlier on a Form 4 or were eligible for deferred reporting. If a Form must be filed, it is due 45 days after the end of the company's fiscal year.

* The SEC also requires companies that maintain websites to now post the forms by the end of the next business day after filing them with the SEC.

Additional forms:

Form 10-k

The federal securities laws require publicly traded companies to disclose information on an ongoing basis. For example, domestic issuers (other than small business issuers) must submit annual reports on Form 10-K,

Form 10-q

They must also submit quarterly reports on Form 10-Q

Form 8-A

This is a short form registration that can be filed instead of form 10. it requires abbreviated information while registering your company under 12g or 12b of the exchange act

Form 8-k

For a number of specified events that must comply with a variety of other disclosure requirements, current reports must be filed on Form 8-K.



* Every business day from 5 to 10, S-1 forms are filed with the SEC's EDGAR filing system.

Pink Sheet Registration

There are two ways to list on the pink sheets;

1. An existing company with a minimum of 40 shareholders and at least 250,000 free trading shares. After a completed score offering [a simple Regulation D 504 offering for up to $1,000,000] this is an exempt security offering for one million dollars. You can list these shares for trading immediately. However, you cannot sell additional shares.

This is a state registered exemption from SEC registration. You must obtain authorization from the state and pay a registration fee to the state. This registration fee is usually around $300.00 but varies from state to state. You will also be required to file a Form “D” with the SEC after you raise your first money, and a similar form with the state. You must first complete a form U7 circular called a Small Company Offering Registration Form (U-7)

NOTE: You may file a new SCOR offering every 12 months and raise $1,000,000 each offering those shares are freely tradable


2. Filing an S1 offering circular and having it declared effective by the SEC. I also suggest in conjunction with this you file a Form 8-A and become a fully SEC reporting company under 12b of the securities act. This is the method I use and what this book will discuss. This will also allow you to list your company on the Bulletin Board

Even while listed on the Pink Sheets alone which you can do, we believe in disclosures, so we recommend filing forms 3, 4 and 5 as appropriate, and we always file form 10k and 10q yearly and quarterly financials, which we believe gives the company more credibility by disclosures investors want to see


The Average daily trading volume: the over the counter Pink market.


Securities listed 2014

9,844

Daily Dollar Volume

$845,453,676

Daily Trade Volume

11,000,000,000

Daily approximate trades

120,620


Volume by Pink Sheet Market tiers [Pink Sheets has three market tiers]


Securities as of 2014

Number

Dollar Volume traded

Total Securities

9,844

$845,453,676

OTCQX

335

$108,665,332

OTCQB

3,178

$ 338,168,859

OTC Pink

6,331

$ 398,619,485


NOTE: Bulletin Board stats for February 2014 show share volume of 33,668,263,203 and dollar volume of $4,757,866,416


Breaking down the Pink Sheet market tiers.


[The Pink Sheets tier level is based on whether or not the company provides disclosures and how much information they disclose].



OTCQX

Has high financial standards, [1] are current in their disclosure and [2] receive third party advisory… generally a Wall Street bank.

This designation is for high growth and for early stage companies seeking to build a more stable valuation and generate visibility in the investment community. These companies will use the SEC’s EDGAR system to distribute their financial information. Non Reporting companies can also use the Pink Sheet OTC Market Group's [OTC Disclosure & News Service]The OTCQX security must also have a bid price of at least $0.10.

OTCQB

This marketplace has effectively replaced the telephone-based, FINRA-operated OTC Bulletin Board (OTCBB) as the primary market for off-exchange traded SEC and bank reporting securities. Investors buy and sell OTCQB securities on OTC Link® ATS, which is an SEC-registered Alternative Trading System and in a manner is almost identical to that of trading a NYSE or NASDAQ security, through the broker of their choice. Investors can buy and sell securities through institutional, retail, or online broker-dealers, making the trading experience nearly identical to that of trading NYSE or NASDAQ securities.

[1] Investors can see prices and access market data [2] Investors can access company information [3] Investors can trade through the broker of their choice

OTC PINK:


The OTC Pink® marketplace offers trading in a wide spectrum of equity securities through any broker. This marketplace is for all types of companies that are there by reasons of [i] default, [ii] distress or [iii] design, which is why they are further segmented based on the level of information that they provide.

OTC Pink Provides a Base Level of Trading Efficiency

1. Electronic trading (through institutional, retail and online brokers) 2. Transparent prices 3. Classification of companies based on the variable levels of disclosure and information availability 4. Access to all types of U.S. and global companies (including ADRs, penny stocks, shells, bankruptcies, and minimally engaged companies)




OTC Pink Marketplace Segments

OTC Markets Group further segments companies based on the quantity and quality of information they provide to investors: Current Information, Limited Information, and No Information


Current Information



These are Companies that follow the International Reporting Standard or the Alternative Reporting Standard by making filings publicly available through the OTC Disclosure & News Service pursuant to OTC Pink Basic Disclosure Guidelines. The Current Information category is based on the level of disclosure and is not a designation of quality or investment risk.

Limited Information


This segment is designed for companies with financial reporting problems, economic distress, or in bankruptcy to make the limited information they have publicly available. The Limited Information category also includes companies that may not be troubled but are unwilling to provide disclosure pursuant to OTC Pink Basic Disclosure Guidelines.


No Information

This segment Indicates companies that do not provide disclosure.


Caveat Emptor


Buyer Beware. There is a public interest concern associated with the company, security, or control person which may include but is not limited to a spam campaign, questionable stock promotion, investigation of fraudulent or other criminal activity, regulatory suspensions, or disruptive corporate actions. During the time it is labeled Caveat Emptor, any stock that is not in OTC Pink Current Information or OTCQB will also have its quotes blocked on www.otcmarkets.com



Generally, when you go public you will file a form S1, if you are required to make amendments you will file an S1-A the A is for amendment, you can expect as much as 4 comment letters from the SEC before the registration becomes effective

To actually get your company through the SEC and your S1 offering circular declared effective and listing on the Pink Sheets and/or the Bulletin Board, and trading, you do not need an attorney to prepare the forms at those stages!

However, after you are listed on the Pink Sheets and/Bulletin Board and are raising money and engaged in the business you took public, and to raise the money for, it would not be a bad idea to hire, on staff or retainer, either an attorney or a paralegal who is familiar with, or is willing to become familiar with the various rules and regulations relating to the SEC and Public companies, these are primarily found at …


The Code of Federal Regulations 17 CFR Chapter II with all subparts found here …http://www.law.cornell.edu/cfr/text/17/chapter-II


The relevant sub parts are:


[1] PART 209 — FORMS PRESCRIBED UNDER THE COMMISSION'S RULES OF PRACTICE (§§ 209.0-1 - 209.1)


[2] PART 210 — FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, INVESTMENT COMPANY ACT OF 1940, INVESTMENT ADVISERS ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975 (§§ 210.1-01 - 210.12-29)

[3] PART 211 — INTERPRETATIONS RELATING TO FINANCIAL REPORTING MATTERS (§§ - )

[4] PART 229 — STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975—REGULATION S-K (§§ 229.10 - 229.1208)

[5] PART 230 — GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 (§§ 230.100 - 230.1001)

[6] PART 231 — INTERPRETATIVE RELEASES RELATING TO THE SECURITIES ACT OF 1933 AND GENERAL RULES AND REGULATIONS THEREUNDER (§§ - )

[7] PART 232 — REGULATION S-T—GENERAL RULES AND REGULATIONS FOR ELECTRONIC FILINGS (§§ 232.10 - 232.600-232.903)

[8] PART 239 — FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 (§§ 239.0-1 - 239.800)


The Dodd-Frank Act [relevant parts are discussed elsewhere in this book]


Sarbanes Oxley Act [relevant parts are discussed elsewhere in this book]


The necessity to have an attorney is more prevalent should you elect to list on the Bulletin Board rather then the Pink Sheets, or a combination of both. However, prudence would dictate that once you are publicly trading you may want assistance from legal counsel and that would be advisable

The Pink Sheets require very little in the way of disclosures, the only requirement they have is that you file quarterly and annual financial information, and they’re not required to be audited, any accountant can prepare them for you and file with either EDGAR or the Pink Sheets filing service. That service provided by Pink Sheets is $500.00 for the set up and an annual fee of $1500.00 a year. EDGAR Uploading will run about $10.00 a page…I recommend using EDGAR, in case you’re considering the Bulletin Board and/or moving up to an exchange in the future.


If you are current with your EDGAR filings including forms 10q and 10k, and forms 3, 4 and 5 and 8-k you will only be required to file a form 8-A to be fully registered.

The form 8-A: registers a company under either 12b or12g of the exchange act, once registered by form 8-A; you are a fully reporting company and are subject to compliance requirements which means full disclosures on forms 3, 4 and 5 as well as the form 8 K [disclosures of events], such as but not limited to a new officer or director, a merger, acquisition dividends etc. as well as the Exchange requirements promulgated by the SEC, Sarbanes-Oxley, Dodd-Frank and the particular exchange.

Most newly filed companies unless there are real assets in excess of $75,000,000 will file under 12b of the exchange act

And of course, forms 10k and 10q; quarterly and annual financial information that is audited

All documents filed with the SEC Must be filed through EDGAR…You will also be required to complete form Id to receive your EDGAR codes…the fill able form is here

http://www.sec.gov/about/forms/formid.pdf this must be filed annually for new codes.


Feature or Requirement

OTCBB

Nasdaq

Minimum quantitative listing requirements

No

Yes

Listing and maintenance fees to issuers

No

Yes

Requirements to maintain quotation or listing

Yes**

Yes

Real-time electronic quotes for domestic issues

Yes

Yes

Minimum Form 211 or listing processing time

3 days

6-8 weeks***

* The OTCBB is separate and distinct from The NASDAQ Stock Market.

** Issuers of securities which began quotation on the OTCBB after January 4, 1999 are required to file periodic financial information with the SEC or other regulatory authority to maintain quotation eligibility.

*** A Form 211 is not required for listing on NASDAQ; however, the average time of approval for listing on NASDAQ is 6-8 weeks.

The OTCBB is distinct from the Pink Sheets. The Pink Sheets are not owned or operated by The NASDAQ Stock Market, Inc. or the FINRA. The Pink Sheets LLC is a privately-owned company whose Electronic Quotation Service provides an Internet-based, real-time quotation service for OTC equities and bonds.




CHAPTER FIVE


CONTINUOUS OFFERINGS UNDER REGISTRATION STATEMENT S1 AND POST EFFECTIVE AMENDMENTS


Q & A Format

Question: If a continuous offering under Securities Act Rule 415 is registered on Form S-1, is a post-effective amendment required to be filed in order to satisfy the requirements of Securities Act Section 10(a)(3), to reflect fundamental changes or to disclose material changes in the plan of distribution?

Answer: Yes. A post-effective amendment is required in these circumstances pursuant to the issuer's Item 512(a) undertakings. Form S-1 does not provide for forward incorporation by reference of Exchange Act reports filed after the effective date of the registration statement. Other changes to the information in the prospectus contained in the registration statement generally may be made by filing a prospectus supplement.

Note: Rule 10A-3 -- Listing Standards Relating to Audit Committees does not apply to Bulletin Board and Pink Sheet companies. They are exempt.

Note 2: Rule 415 -- Delayed or Continuous Offering and Sale of Securities only applies when securities are being sold by other then the issuer… see rule 415 (a) (1) (i)

  1. Securities may be registered for an offering to be made on a continuous or delayed basis in the future, Provided, That:

    1. The registration statement pertains only to:

      1. Securities which are to be offered or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of the registrant or a person of which the registrant is a subsidiary;

In the case of a registration statement pertaining to an at the market offering of equity securities by or on behalf of the registrant, the offering must come within paragraph (a)(1)(x) of this section. As used in this paragraph, the term at the market offering means an offering of equity securities into an existing trading market for outstanding shares of the same class at other than a fixed price.

Securities registered on an automatic shelf registration statement and securities described in paragraphs (a)(1)(vii), (ix), and (x) of this section may be offered and sold only if not more than three years have elapsed since the initial effective date of the registration statement under which they are being offered and sold, provided, however, that if a new registration statement has been filed pursuant to paragraph (a)(6) of this section:

      1. If the new registration statement is an automatic shelf registration statement, it shall be immediately effective pursuant to Rule 462(e); or

Rule 462 -- Immediate Effectiveness of Certain Registration Statements and Post-Effective Amendments

      1. If the new registration statement is not an automatic shelf registration statement:

        1. Securities covered by the prior registration statement may continue to be offered and sold until the earlier of the effective date of the new registration statement or 180 days after the third anniversary of the initial effective date of the prior registration statement; and

        2. A continuous offering of securities covered by the prior registration statement that commenced within three years of the initial effective date may continue until the effective date of the new registration statement if such offering is permitted under the new registration statement.

    1. Prior to the end of the three-year period described in paragraph (a)(5) of this section, an issuer may file a new registration statement covering securities described in such paragraph (a)(5) of this section, which may, if permitted, be an automatic shelf registration statement. The new registration statement and prospectus included therein must include all the information that would be required at that time in a prospectus relating to all offering(s) that it covers. Prior to the effective date of the new registration statement (including at the time of filing in the case of an automatic shelf registration statement), the issuer may include on such new registration statement any unsold securities covered by the earlier registration statement by identifying on the bottom of the facing page of the new registration statement or latest amendment thereto the amount of such unsold securities being included and any filing fee paid in connection with such unsold securities, which will continue to be applied to such unsold securities. The offering of securities on the earlier registration statement will be deemed terminated as of the date of effectiveness of the new registration statement.

  1. This section shall not apply to any registration statement pertaining to securities issued by a face-amount certificate company or redeemable securities issued by an open-end management company or unit investment trust under the Investment Company Act of 1940 or any registration statement filed by any foreign government or political subdivision thereof.

Question: How should a registrant conducting a continuous offering on Form S-1 update the prospectus to reflect the information in its subsequently filed Exchange Act reports?

Answer: If Form S-1 is used for a continuous offering, the prospectus may have to be revised periodically to reflect new information since, unlike Form S-3, the form does not provide for incorporation by reference of subsequent periodic reports. For example, in a continuous offering on a Form S-1 pursuant to Rule 415(a)(1)(ix), a registrant wants to update the prospectus to include Exchange Act reports filed after the effective date of the Form S-1. Item 512(a)(1) of Regulation S-K requires certain changes, including a Section 10(a)(3) update, to be reflected in a post-effective amendment. Other changes may be made in a prospectus supplement filed pursuant to Rule 424(b). If the registrant files a post-effective amendment, it could incorporate by reference previously filed Exchange Act reports if it satisfied the conditions in Form S-1 allowing incorporation by reference.

Question: The ability to incorporate by reference previously filed Exchange Act reports and other materials in Form S-1 is conditioned on the issuer making its incorporated Exchange Act reports and other materials readily accessible on a web site maintained by or for the issuer. May an issuer link to the Commission's EDGAR system to satisfy this requirement?

Answer: An issuer may satisfy this requirement by including on the web site maintained by or for the issuer hyperlinks directly to the issuer's reports or other materials filed on EDGAR. It also may link directly to the issuer's EDGAR filing page. However, linking to the Commission's EDGAR system generally, or to a page where an investor would be required to select the issuer or input the issuer's name, will not satisfy this requirement.

Question: Form S-1 allows eligible registrants to elect "backwards" incorporation by reference of previously filed Exchange Act reports and other materials. At effectiveness, must the prospectus filed as part of the Form S-1 registration statement identify all previously filed Exchange Act reports and materials that are incorporated by reference?

Answer: Yes. If the registrant elects to incorporate by reference pursuant to General Instruction VII and Item 12 of Form S-1, then it must incorporate by reference, in their entirety, all Exchange Act reports and other materials required by Item 12. If a registrant wants to incorporate by reference an Exchange Act report that the registrant files after the filing date of a Form S-1 or an amendment thereto but prior to effectiveness, the registrant must file a pre-effective amendment to include a specific reference to such report in the prospectus filed as part of the registration statement.

CHAPTER SIX


RULE 144 AND THE SALE OF RESTRICTED AND CONTROL STOCK


Rule 144: Selling Restricted and Control Securities

When you acquire restricted securities or hold control securities, you must find an exemption from the SEC's registration requirements to sell them in a public marketplace. Rule 144 allows public resale of restricted and control securities if a number of conditions are met. This overview tells you what you need to know about selling your restricted or control securities. It also describes how to have a restrictive legend removed.

What Are Restricted and Control Securities?

Restricted securities are securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, Regulation D offerings, employee stock benefit plans, as compensation for professional services, or in exchange for providing "seed money" or start-up capital to the company. Rule 144(a)(3) identifies what sales produce restricted securities.

Control securities are those held by an affiliate of the issuing company. An affiliate is a person, such as an executive officer, a director or large shareholder, in a relationship of control with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. If you buy securities from a controlling person or "affiliate," you take restricted securities, even if they were not restricted in the affiliate's hands.

If you acquire restrictive securities, you almost always will receive a certificate stamped with a "restrictive" legend. The legend indicates that the securities may not be resold in the marketplace unless they are registered with the SEC or are exempt from the registration requirements. Certificates for control securities usually are not stamped with a legend.



What Are the Conditions of Rule 144?

If you want to sell your restricted or control securities to the public, you must first meet the applicable conditions set forth in Rule 144. The rule is not the exclusive means for selling restricted or control securities but provides a "safe harbor" exemption to sellers. The rule's five conditions are summarized below:

  1. Holding Period. Before you may sell any restricted securities in the marketplace, you must hold them for a certain period of time. If the company that issued the securities is a “reporting company” in that it is subject to the reporting requirements of the Securities Exchange Act of 1934, then you must hold the securities for at least six months. If the issuer of the securities is not subject to the reporting requirements, then you must hold the securities for at least one year. The relevant holding period begins when the securities were bought and fully paid for. The holding period only applies to restricted securities. Because securities acquired in the public market are not restricted, there is no holding period for an affiliate who purchases securities of the issuer in the marketplace. But the resale of an affiliate's shares as control securities is subject to the other conditions of the rule.

Additional securities purchased from the issuer do not affect the holding period of previously purchased securities of the same class. If you purchased restricted securities from another non-affiliate, you can tack on that non-affiliate's holding period to your holding period. For gifts made by an affiliate, the holding period begins when the affiliate acquired the securities and not on the date of the gift. In the case of a stock option, including employee stock options, the holding period begins on the date the option is exercised and not the date it is granted.

  1. Current Public Information.  There must be adequate current information about the issuing company publicly available before the sale can be made. For reporting companies, this generally means that the companies have complied with the periodic reporting requirements of the Securities Exchange Act of 1934. For non-reporting companies, this means that certain company information, including information regarding the nature of its business, the identity of its officers and directors, and its financial statements, is publicly available.

  2. Trading Volume Formula. If you are an affiliate, the number of equity securities you may sell during any three-month period cannot exceed the greater of 1% of the outstanding shares of the same class being sold, or if the class is listed on a stock exchange, the greater of 1% or the average reported weekly trading volume during the four weeks preceding the filing of a notice of sale on Form 144.  Over-the-counter stocks, including those quoted on the OTC Bulletin Board and the Pink Sheets, can only be sold using the 1% measurement.

  3. Ordinary Brokerage Transactions.  If you are an affiliate, the sales must be handled in all respects as routine trading transactions, and brokers may not receive more than a normal commission.  Neither the seller nor the broker can solicit orders to buy the securities.

  4. Filing a Notice of Proposed Sale with the SEC.  If you are an affiliate, you must file a notice with the SEC on Form 144 if the sale involves more than 5,000 shares or the aggregate dollar amount is greater than $50,000 in any three-month period.  The sale must take place within three months of filing the notice and, if the securities have not been sold, you must file an amended notice.

If I Am Not an Affiliate of the Issuer, What Conditions of Rule 144 Must I Comply With?

If you are not (and have not been for at least three months) an affiliate of the company issuing the securities and have held the restricted securities for at least one year, you can sell the securities without regard to the conditions in Rule 144 discussed above.  If the issuer of the securities is subject to the Exchange Act reporting requirements and you have held the securities for at least six months but less than one year, you may sell the securities as long as you satisfy the current public information condition.

Can the Securities Be Sold Publicly If the Conditions of Rule 144 Have Been Met?

Even if you have met the conditions of Rule 144, you can't sell your restricted securities to the public until you've gotten the legend removed from the certificate. Only a transfer agent can remove a restrictive legend. But the transfer agent won't remove the legend unless you've obtained the consent of the issuer—usually in the form of an opinion letter from the issuer's counsel—that the restrictive legend can be removed. Unless this happens, the transfer agent doesn't have the authority to remove the legend and permit execution of the trade in the marketplace.

To begin the legend removal process, an investor should contact the company that issued the securities, or the transfer agent for the securities, to ask about the procedures for removing a legend. Removing the legend can be a complicated process requiring you to work with an attorney who specializes in securities law.

What If a Dispute Arises Over Whether I Can Remove the Legend?

If a dispute arises about whether a restrictive legend can be removed, the SEC will not intervene. Removal of a legend is a matter solely in the discretion of the issuer of the securities. State law, not federal law, covers disputes about the removal of legends. Thus, the SEC will not take action in any decision or dispute about removing a restrictive legend.

On line fill able form 144 can be found here 

https://www.pdffiller.com/en/project/15741837.htm?form_id=1278305

CHAPTER SEVEN


GETTING READY- FORMING YOUR CORPORATION.


Most companies that seek to go public understand the need for sufficient shares in order to raise money both during their initial public offering as well as subsequent offerings. When I form a public company I usually require a minimum of 500,000,000 shares…I also will have authorized another 10,000,000 shares of preferred stock, which I may or may not even issue.


In the index of exhibits in the back of this book I have included By Laws I have used in the past…they provide for all stock to be issues fully pre paid and non assessable, a requirement for all publicly traded shares.


Knowing your costs in advance is helpful to bring into your company enough family and friends to raise the funds necessary for the intended future public offering.


When you incorporate, and the state isn’t that critical, although a significant number of companies do choose Delaware. I don’t use Delaware or California or New York. I use a smaller more-friendly state. The state to incorporate in is probably best to be the state where you live.


You will also need a first meeting of shareholders, election of officers and directors and a resolution to form the Public company. In the Index I have provided, My First Meeting of shareholders minutes


Now you have formed the corporation and have 15 to 20 shareholders who have each agreed to put $1,000.00 into the treasury…you’re ready for the next step.


As a side note how much money do you really need to get you’re offering circular filed with the SEC?


1. Filing fees… [Currently $124.50 per million to be raised] always check with the SEC for the current fee schedule as it goes up periodically. The current filing fee will be good until September 2018


2. CPA Audited financials for a new company approximately $4,000.00


3. EDGAR filing fees approximately $10.00 per page [$600.00 for 60 pages; $800.00 for 80 pages]


Total to get this far assuming you are seeking $10,000,000 is about $5,888.00 to $6,088.00


You should have an additional $2,400.00 in reserve in case you have to respond to as many as four comment letters…Your CPA will address the comment letters with you and for you. (By the way four [4] comment letters, from the SEC, is not uncommon) following is a sample comment letter that was received by an issuer.

-----------------------------------------------------------------------------------------------------------




SEC Letter head and identification of issuer deleted


December 17, 2012

Via E-Mail

////////////

President and Chief Executive Officer

Re: /// Corp.

Amendment no. 2 to Form 10

Filed November 28, 2012

File No. 000-0000


Dear Mr. ///:


Unless otherwise stated, references to prior comments refer to those from our letter dated November 20, 2012. We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.


Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.


After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments.


Item 1. Business


Search for Target Business, page 5


1. Your response to prior comment 5 does not address whether and how compensation to be received by Mr. ///, other affiliates, or the company will affect the decision to proceed with a business combination and the role compensation has played in the past in analyzing business combinations with prior blank check companies with which Mr. /// has been involved. Please revise your disclosure to address these concerns.


Emerging Growth Company, page 8


2. We note your added disclosure in response to prior comment 2. Please tell us how you determined that as a smaller reporting company, you “benefit from the same exemptions and exclusions as an Emerging Growth Company,” addressing each of the exemptions that are available to you as an Emerging Growth Company. For example, please address how you believe that as a smaller reporting company, you are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002.


Item 6. Executive Compensation


Summary Compensation Table, page 28


3. We note that in response to prior comment 8, you have removed the stock Mr. /// received in exchange for services rendered to the company from the Summary Compensation Table. Item 402(m) of Regulation S-K requires you to discuss all compensation, including non-cash items. Please revise your executive compensation disclosure accordingly.


We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.


In responding to our comments, please provide a written statement from the company acknowledging that:


the company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.


Please contact ////////// at (202) ///-//// or me at (202) ///-//// with any questions.


Sincerely,







CHAPTER EIGHT

Sarbanes-Oxley and Dodd-Frank.

Before a company can begin trading on an exchange, [other then the OTC Bulletin Board or listing on the Pink Sheets] it must meet certain initial requirements or "listing standards." The various exchanges set their own standards for listing and continuing to trade a company’s stock. The SEC does not generally set listing standards except in relation to a law passed by congress such as Sarbanes-Oxley and Dodd-Frank. One standard absent from the over the counter markets is a requirement to have an Audit Committee. The Bulletin Board and Pink Sheets do not require this committee, and small filers are exempt from its requirement.

NOTE: Dodd-Frank Act Permanently Exempts Non-Accelerated Filers from Auditor Attestation Requirement of Section 404(b) of Sarbanes-Oxley Act

Accelerated filer and large accelerated filer17 CFR 240.12b-2 – Definitions


Accelerated filer

The term accelerated filer means an issuer after it first meets the following conditions as of the end of its fiscal year:

(i)

The issuer had an aggregate worldwide market value of the voting and non-voting common equity held by its non-affiliates of $75 million or more, but less than $700 million, as of the last business day of the issuers most recently completed second fiscal quarter;

(ii)

The issuer has been subject to the requirements of section 13(a) or 15(d) of the Act (15 U.S.C. 78m or 78o(d)) for a period of at least twelve calendar months;

(iii)

The issuer has filed at least one annual report pursuant to section 13(a) or 15(d) of the Act; and

(iv)

The issuer is not eligible to use the requirements for smaller reporting companies in part 229 of this chapter for its annual and quarterly reports.

large accelerated filer

The term large accelerated filer means an issuer after it first meets the following conditions as of the end of its fiscal year:

(i)

The issuer had an aggregate worldwide market value of the voting and non-voting common equity held by its non-affiliates of $700 million or more, as of the last business day of the issuers most recently completed second fiscal quarter;

(ii)

The issuer has been subject to the requirements of section 13(a) or 15(d) of the Act for a period of at least twelve calendar months;

(iii)

The issuer has filed at least one annual report pursuant to section 13(a) or 15(d) of the Act; and

(iv)

The issuer is not eligible to use the requirements for smaller reporting companies in part 229 of this chapter for its annual and quarterly reports


Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") serves to permanently exempt non-accelerated filers (public companies with market capitalization of less than $75 million) from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act").


Exemption for Non-Accelerated Filers

The Sarbanes-Oxley Act requires that the management of public companies assess the effectiveness of the internal controls of issuers for financial reporting. Specifically, Section 404 of the Sarbanes-Oxley Act is contentious due to the high compliance costs to companies, especially smaller companies. Section 404(a) requires company management to report, as part of each annual filing under the Securities Exchange Act of 1934 (the "Exchange Act"), with respect to the adequacy of the company's internal controls over financial reporting. Section 404(b) requires the company's public accountants to attest to, and report on, the adequacy of the company's internal control by filing a formal "attestation" with the Securities and Exchange Commission (the "SEC").


In part because of the disproportionately high cost to smaller companies, since the passage of the Sarbanes-Oxley Act, the SEC has allowed smaller companies to defer the attestation requirement contained in Section 404(b).


Recognizing the heavy burden imposed on smaller reporting companies, with the passage of the Dodd-Frank Act, lawmakers permanently exempted all non-accelerated filers from Section 404(b).


Title IX of the Dodd-Frank Act amends the Sarbanes-Oxley Act by adding a new subsection (c) to Section 404 of the Sarbanes-Oxley Act. Subsection (c) reads in its entirety as follows:


"(c) EXEMPTION FOR SMALLER ISSUERS. Subsection (b) shall not apply with respect to any audit report prepared for an issuer that is neither a 'large accelerated filer' nor an 'accelerated filer' as those terms are defined in Rule 12b-2 of the Commission (17 C.F.R. 240.12b-2)"


Consequently, only accelerated and large accelerated filers are now required to comply with the auditor attestation requirements. Pursuant to Rule 12b-2 of the Exchange Act, to qualify as an accelerated filer or a large accelerated filer, Dodd-Frank gave a list of requirements that a company must first meet. Stated above…


As such, any company which does not meet these equity and reporting requirements is not deemed to be an accelerated filer nor a large accelerated filer and is exempt, pursuant to the new Section 404(c) of the Sarbanes-Oxley Act, from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. (Note that notwithstanding the exemption from Section 404(b), all non-accelerated filers remain subject to Section 404(a), which requires disclosure of management's report on the adequacy of the company's internal control over financial reporting

Sarbanes Oxley requires in section 406 and 407, two disclosures, [i] a disclosure of whether your company has an audit committee, and if not, you have to explain why not; simply as a small filer it isn’t required for you, also the OTC markets do not require it, and [ii] that you have a code of ethics or disclose why you don’t.

In the Index I have provided a sample code of ethics that Public companies are using.

As a result of Sarbanes Oxley, which applies to all financials filed with the SEC, top management must now individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Also, Sarbanes Oxley increased the independence of the outside auditors who review the accuracy of corporate financial statements and increased the oversight role of boards of directors.

Sarbanes Oxley contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the law. Harvey Pitt, the 26th chairman of the SEC, led the SEC in the adoption of dozens of rules to implement the Sarbanes–Oxley Act. It created a new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting and disciplining accounting firms in their roles as auditors of public companies. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure.

The 11 sections of Sarbanes-Oxley are as follows:

  1. Public Company Accounting Oversight Board (PCAOB)

Title I consist of nine sections and establishes the Public Company Accounting Oversight Board, to provide independent oversight of public accounting firms providing audit services ("auditors"). It also creates a central oversight board tasked with registering auditors, defining the specific processes and procedures for compliance audits, inspecting and policing conduct and quality control, and enforcing compliance with the specific mandates of SOX.

  1. Auditor Independence

Title II consists of nine sections and establishes standards for external auditor independence, to limit conflicts of interest. It also addresses new auditor approval requirements, audit partner rotation, and auditor reporting requirements. It restricts auditing companies from providing non-audit services (e.g., consulting) for the same clients.

  1. Corporate Responsibility

Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 requires that the company's "principal officers" (typically the Chief Executive Officer and Chief Financial Officer) certify and approve the integrity of their company financial reports quarterly.

  1. Enhanced Financial Disclosures

Title IV consists of nine sections. It describes enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers. It requires internal controls for assuring the accuracy of financial reports and disclosures, and mandates both audits and reports on those controls. It also requires timely reporting of material changes in financial condition and specific enhanced reviews by the SEC or its agents of corporate reports.

  1. Analyst Conflicts of Interest

Title V consists of only one section, which includes measures designed to help restore investor confidence in the reporting of securities analysts. It defines the codes of conduct for securities analysts and requires disclosure of knowable conflicts of interest.

  1. Commission Resources and Authority

Title VI consists of four sections and defines practices to restore investor confidence in securities analysts. It also defines the SEC's authority to censure or bar securities professionals from practice and defines conditions under which a person can be barred from practicing as a broker, advisor, or dealer.

  1. Studies and Reports

Title VII consists of five sections and requires the Comptroller General and the SEC to perform various studies and report their findings. Studies and reports include the effects of consolidation of public accounting firms, the role of credit rating agencies in the operation of securities markets, securities violations and enforcement actions, and whether investment banks assisted Enron, Global Crossing and others to manipulate earnings and obfuscate true financial conditions.

  1. Corporate and Criminal Fraud Accountability

Title VIII consists of seven sections and is also referred to as the "Corporate and Criminal Fraud Accountability Act of 2002". It describes specific criminal penalties for manipulation, destruction or alteration of financial records or other interference with investigations, while providing certain protections for whistle-blowers.

  1. White Collar Crime Penalty Enhancement

Title IX consists of six sections. This section is also called the "White Collar Crime Penalty Enhancement Act of 2002." This section increases the criminal penalties associated with white-collar crimes and conspiracies. It recommends stronger sentencing guidelines and specifically adds failure to certify corporate financial reports as a criminal offense.

  1. Corporate Tax Returns

Title X consists of one section. Section 1001 states that the Chief Executive Officer should sign the company tax return.

  1. Corporate Fraud Accountability

Title XI consists of seven sections. Section 1101 recommends a name for this title as "Corporate Fraud Accountability Act of 2002". It identifies corporate fraud and records tampering as criminal offenses and joins those offenses to specific penalties. It also revises sentencing guidelines and strengthens their penalties. This enables the SEC to resort to temporarily freezing transactions or payments that have been deemed "large" or "unusual".

Sarbanes–Oxley Section 302: Disclosure controls

Under Sarbanes–Oxley, two separate sections came into effect—one civil and the other criminal. 15 U.S.C. § 7241 (Section 302) (civil provision); 18 U.S.C. § 1350 (Section 906) (criminal provision).

Section 302 of the Act mandates a set of internal procedures designed to ensure accurate financial disclosure. The signing officers must certify that they are "responsible for establishing and maintaining internal controls" and "have designed such internal controls to ensure that material information relating to the company and its consolidated subsidiaries is made known to such officers by others within those entities, particularly during the period in which the periodic reports are being prepared." 15 U.S.C. § 7241(a)(4). The officers must "have evaluated the effectiveness of the company's internal controls as of a date within 90 days prior to the report" and "have presented in the report their conclusions about the effectiveness of their internal controls based on their evaluation as of that date."

The SEC interpreted the intention of Sec. 302 in Final Rule 33–8124. In it, the SEC defines the new term "disclosure controls and procedures," which are distinct from "internal controls over financial reporting." Under both Section 302 and Section 404, Congress directed the SEC to promulgate regulations enforcing these provisions.

External auditors are required to issue an opinion on whether effective internal control over financial reporting was maintained in all material respects by management. This is in addition to the financial statement opinion regarding the accuracy of the financial statements. The requirement to issue a third opinion regarding management's assessment was removed in 2007.

Sarbanes–Oxley Section 303: Improper Influence on Conduct of Audits

a. Rules to Prohibit. It shall be unlawful, in contravention of such rules or regulations as the Commission shall prescribe as necessary and appropriate in the public interest or for the protection of investors, for any officer or director of an issuer, or any other person acting under the direction thereof, to take any action to fraudulently influence, coerce, manipulate, or mislead any independent public or certified accountant engaged in the performance of an audit of the financial statements of that issuer for the purpose of rendering such financial statements materially misleading.

Sarbanes–Oxley Section 401: Disclosures in periodic reports (Off-balance sheet items)

The bankruptcy of Enron drew attention to off-balance sheet instruments that were used fraudulently. During 2010, the court examiner's review of the Lehman Brothers bankruptcy also brought these instruments back into focus, as Lehman had used an instrument called "Repo 105" to allegedly move assets and debt off-balance sheet to make its financial position look more favorable to investors. Sarbanes-Oxley required the disclosure of all material off-balance sheet items. It also required an SEC study and report to better understand the extent of usage of such instruments and whether accounting principles adequately addressed these instruments; the SEC report was issued June 15, 2005. Interim guidance was issued in May 2006, which was later finalized. Critics argued the SEC did not take adequate steps to regulate and monitor this activity.

Sarbanes–Oxley Section 404: Assessment of internal control

The most contentious aspect of Sarbanes–Oxley is Section 404, which requires management and the external auditor to report on the adequacy of the company's internal control on financial reporting (ICFR). This is the most-costly aspect of the legislation for companies to implement, as documenting and testing important financial manual and automated controls requires enormous effort.

Under Section 404 of the Act, management is required to produce an "internal control report" as part of each annual Exchange Act report. See 15 U.S.C. § 7262. The report must affirm "the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting." 15 U.S.C. § 7262(a). The report must also "contain an assessment, as of the end of the most recent fiscal year of the Company, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting." To do this, managers are generally adopting an internal control framework such as that described in COSO.

To help alleviate the high costs of compliance, guidance and practice have continued to evolve. The Public Company Accounting Oversight Board (PCAOB) approved Auditing Standard No. 5 for public accounting firms on July 25, 2007. This standard superseded Auditing Standard No. 2, the initial guidance provided in 2004. The SEC also released its interpretive guidance on June 27, 2007. It is generally consistent with the PCAOB's guidance but intended to provide guidance for management. Both management and the external auditor are responsible for performing their assessment in the context of a top-down risk assessment, which requires management to base both the scope of its assessment and evidence gathered on risk. This gives management wider discretion in its assessment approach. These two standards together require management to:

Sarbanes-Oxley 404 compliance costs represent a tax on inefficiency, encouraging companies to centralize and automate their financial reporting systems. This is apparent in the comparative costs of companies with decentralized operations and systems, versus those with centralized, more efficient systems. For example, the 2007 Financial Executives International (FEI) survey indicated average compliance costs for decentralized companies were $1.9 million, while centralized company costs were $1.3 million. Costs of evaluating manual control procedures are dramatically reduced through automation.

Sarbanes–Oxley 404 and smaller public companies

After the SEC and PCAOB issued their guidance in June 2007, the SEC required smaller public companies (non-accelerated filers) with fiscal years ending after December 15, 2007 to document a Management Assessment of their Internal Controls over Financial Reporting (ICFR). Outside auditors of non-accelerated filers however opine or test internal controls under PCAOB (Public Company Accounting Oversight Board) Auditing Standards for years ending after December 15, 2008. Another extension was granted by the SEC for the outside auditor assessment until years ending after December 15, 2009. The reason for the timing disparity was to address the House Committee on Small Business concern that the cost of complying with Section 404 of the Sarbanes–Oxley Act of 2002 was still unknown and could therefore be disproportionately high for smaller publicly held companies. On October 2, 2009, the SEC granted another extension for the outside auditor assessment until fiscal years ending after June 15, 2010. The SEC stated in their release that the extension was granted so that the SEC's Office of Economic Analysis could complete a study of whether additional guidance provided to company managers and auditors in 2007 was effective in reducing the costs of compliance. They also stated that there will be no further extensions in the future.

Note: On September 15, 2010 the SEC issued final rule 33-9142 that permanently exempts registrants that are neither accelerated nor large accelerated filers as defined by Rule 12b-2 of the Securities and Exchange Act of 1934 from Section 404(b) internal control audit requirement. This is important for start up companies seeking to go public

Note: The aggregate worldwide market value of the issuer's outstanding voting and non-voting common equity shall be computed by use of the price at which the common equity was last sold, or the average of the bid and asked prices of such common equity, in the principal market for such common equity.

Sarbanes–Oxley Section 802: Criminal penalties for influencing US Agency investigation/proper administration

Section 802(a) of the Sarbanes–Oxley, 18 U.S.C. § 1519 states:

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both”.

Sarbanes–Oxley Section 906: Criminal Penalties for CEO/CFO financial statement certification

§ 1350. Section 906 states: Failure of corporate officers to certify financial reports

(a) Certification of Periodic Financial Reports— Each periodic report containing financial statements filed by an issuer with the Securities Exchange Commission pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m (a) or 78o (d)) shall be accompanied by Section 802(a) of the Sarbanes-Oxley a written statement by the chief executive officer and chief financial officer (or equivalent thereof) of the issuer.

(b) Content— The statement required under subsection (a) shall certify that the periodic report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of [1] 1934 (15 U.S.C. 78m or 78o (d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

(c) Criminal Penalties— Whoever— (1) certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or

(2) willfully certifies any statement as set forth in subsections (a) and (b) of this section knowing that the periodic report accompanying the statement does not comport with all the requirements set forth in this section shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both.

Sarbanes–Oxley Section 1107: Criminal penalties for retaliation against whistleblowers

Section 1107 of the SOX 18 U.S.C. § 1513(e) states:

Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, shall be fined under this title, imprisoned not more than 10 years, or both.”

Clawbacks of executive compensation for misconduct

One of the highlights of the law was a provision that allowed the SEC to force a company's CEO or CFO to disgorge any executive compensation (such as bonus pay or proceeds from stock sales) earned within a year of misconduct that results in an earnings restatement. However, according to Gretchen Morgenson of The New York Times, such clawbacks have actually been rare, due in part to the requirement that the misconduct must be either deliberate or reckless. The SEC did not attempt to claw back any executive compensation until 2007, and as of December 2013 had only brought 31 cases, 13 of which were begun after 2010. However, according to Dan Whalen of the accounting research firm Audit Analytics, the threat of clawbacks, and the time-consuming litigation associated with them has forced companies to tighten their financial reporting standards.

Now after reading through Sarbanes-Oxley and if you are completely panicked, Relax! Sarbanes Oxley, It is not a law to be feared, but rather understood. Small filers are exempted from the most expensive parts of compliance and on the Pink Sheets there are even fewer requirements. However if you follow the rules which means with Honesty and Integrity and as you raise money and begin to develop your company, and you retain the appropriate professionals for guidance, you will be fine.

The most important part of Sarbanes Oxley for the small filer: Be Honest and Truthful! And make full and complete disclosures

The CEO/CFO must certify their financial filings

The statement required shall certify that the periodic report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of [1] 1934 (15 U.S.C. 78m or 78o (d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.”

Your auditor can help you with this!

Concerning Listing requirements.

To be listed initially, a company must meet minimum financial and non-financial standards. Among other things, the standards cover total market value, stock price, and the number of publicly traded shares and shareholders a firm has. After a company's stock starts trading on an exchange, it usually is subject to other, less stringent requirements; if it fails to meet those, the stock can be delisted. As with listing requirements, the standards for delisting shares are not uniform; each exchange has its own requirements.

Generally, the larger exchanges will require at least 300 to 500 shareholders and a share selling price of $5.00. They will also require the value of the company to be in excess of $25,000,000.

Starting out on the Public company path your options as start ups are limited… two services will be friendly for a start up company…e.g. the Bulletin Board and the Pink Sheets which is a listing service…there is no negative to listing on both.




CHAPTER NINE


THE DODD FRANK WALL STREET REFORM

AND CONSUMER PROTECTION ACT OF 2010,


Not much of Dodd-Frank applies to Over the Counter listed companies. The rules fairly much apply to the exchanges.


Example:

Corporate Governance & Disclosure

SUMMARY: The SEC adopted a new rule and amendments to their proxy disclosure rules to implement Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 10C to the Securities Exchange Act of 1934. Section 10C requires the Commission to adopt rules directing the national securities exchanges and national securities associations to prohibit the listing of any equity security of an issuer that is not in compliance with Section 10C’s compensation committee and compensation adviser requirements. In accordance with the statute, new Rule 10C-1 directs the national securities exchanges to establish listing standards that, among other things, require each member of a listed issuer’s compensation committee to be a member of the board of directors and to be “independent,” as defined in the listing standards of the national securities exchanges adopted in accordance with the final rule. In addition, pursuant to Section 10C(c)(2), they adopted amendments to their proxy disclosure rules concerning issuers’ use of compensation consultants and related conflicts of interest.

.

SUPPLEMENTARY INFORMATION: The SEC adopted a new Rule 10C-1 under the Securities Exchange Act of 1934 and amendments to Item 407.2 of Regulation S-K.


Since Over the Counter listing services are not included in this rule, this is for informational purposes only….



See Exchange Act Sections 10C(a) and (f).


Adopted rules concerning shareholder approval of executive compensation and "golden parachute" compensation arrangements. The new rules specify that say-on-pay votes required under the Dodd-Frank Act must occur at least once every three years and that companies are required to hold a "frequency" vote at least once every six years in order to allow shareholders to decide how often they would like to be presented with the say-on-pay vote. (Jan. 25, 2011) [§951]

CHAPTER TEN

GLOSSARY OF TERMS


Advisory Affiliate: Your advisory affiliates are (1) all of your officers, partners, or directors (or any person performing similar functions); (2) all persons directly or indirectly controlling or controlled by you; and (3) all of your current employees (other than employees performing only clerical, administrative, support or similar functions).


Accredited Investors: Accredited Investors as defined by Rule 501 of Regulation D. These are individuals that can invest in your company with a simple subscription agreement

  1. a director, executive officer, or general partner of the company selling the securities;

  2. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;

  3. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

See more below


ADR: [American depositary receipt] It is a stock that trades in the United States but represents a specified number of shares in a foreign corporation.


Affiliates: other related companies or persons

Bonds: Debt securities offered instead of equity they are usually discounted and carry an interest rate which will determine their yield

Arbitrage: The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.


Bond Yield: Bonds have four yields: [1] coupon (the bond interest rate), [2] current (the bond interest rate as a percentage of the current price of the bond), [3] yield to maturity (an estimate of what an investor will receive if the bond is held to its maturity date)., and [4] the Bond discount rate at purchase.


Book Value: A measure used by owners of common shares to determine the level of safety associated with each individual share after all debts are paid accordingly. The formula would be


Bridge Loans: Short term money loaned to cover an interval between two transactions, generally construction and a take-out loan. The Bridge loan gets the project up and completed so the borrower can move on to the final step.


CIK Numbers: The CIK is a unique, public number that is assigned to each entity that submits filings to the SEC. Use of the CIK allows the SEC to differentiate between filing entities with similar names. CCC (CIK Confirmation Code) The CCC is a code used in combination with the CIK to submit a filing via EDGAR.


Common Shares; usually the shares a company offers for trading.

'Common Stock' is a security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladder for ownership structure.


CUSIP Numbers: these are similar to bank routing numbers


Dodd-Frank act: Financial reform act that requires two [2] independent directors for each [1] director with a financial interest in the company


EDGAR: means Electronic Data Gathering, Analysis and Retrieval (US SEC).

FINRA: [Financial Industry Regulatory Authority] is a private corporation that acts as a self-regulatory organization.


FLOAT: The total number of shares available for trading. Float is calculated by subtracting closely-held shares from the total number of outstanding shares.


Form ID This form is used to obtain the EDGAR Codes for uploading documents to the SEC


Form 211: The Form 211; is the form which must be completed pursuant to FINRA Rule 6432 and submitted to the FINRA OTC Compliance Unit to initiate or resume quotations in the OTCBB, OTC Markets or any other quotation medium pursuant to SEC Rule 15c2-11.


Market Maker: A Broker that fills out and files the form 211

Mezzanine Loans: (a) A mezzanine loan is a form of commercial loan used to finance large commercial properties - typically tall office towers, large hotels, shopping centers and industrial parks. (b) Mezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares. Mezzanine financings can be structured either as debt (typically an unsecured and subordinated note) or preferred stock.

Outstanding Shares: A company's stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stock.” The number of outstanding shares is used in calculating key metrics such as a company’s market capitalization, as well as its earnings per share (EPS) and cash flow per share (CFPS).

Preferred shares: stock that entitles the holder to a fixed dividend, whose payment takes priority over that of common-stock dividends.

Preferred stock; provides a class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.

The precise details as to the structure of preferred stock are specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as "preferred shares".

Primary Standard Industrial Classification Code: The Standard Industrial Classification (SIC) is a system for classifying industries by a four-digit code. Established in the United States in 1937, it is used by government agencies to classify industry areas.


The North American Industry Classification System (NAICS code), is a six-digit code Industrial identifier that may replace the SIC Code in the future


Trading Symbol: The stock identifying symbol assigned by FINRA upon the filing and acceptance of the form 211


Sarbanes–Oxley Act: Regulations about 'Public Company Accounting Reform and Investor Protection. One requirement is that exchange listed companies have an audit, compensation, and nominating corporate governance committees, or an audit committee financial expert. Since Pink Sheets and the Bulletin Board do not require these committees you will not be required to have them


Accredited Investors: Continued


From CFR §230.215   accredited investor.

The term accredited investor as used in section 2(15)(ii) of the Securities Act of 1933 (15 U.S.C. 77b(15)(ii)) shall include the following persons:

(a) Any savings and loan association or other institution specified in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of Table I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such Act, which is a savings and loan association, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

(b) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

(c) Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

(d) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

(e) Any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000.

(1) Except as provided in paragraph (e)(2) of this section, for purposes of calculating net worth under this paragraph (e):

(i) The person's primary residence shall not be included as an asset;

(ii) Indebtedness that is secured by the person's primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of the sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and

(iii) Indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence shall be included as a liability.

(2) Paragraph (e)(1) of this section will not apply to any calculation of a person's net worth made in connection with a purchase of securities in accordance with a right to purchase such securities, provided that:

(i) Such right was held by the person on July 20, 2010;

(ii) The person qualified as an accredited investor on the basis of net worth at the time the person acquired such right; and

(iii) The person held securities of the same issuer, other than such right, on July 20, 2010.

(f) Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

(g) Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in §230.506(b)(2)(ii); and

(h) Any entity in which all of the equity owners are accredited investors.

[47 FR 11261, Mar. 16, 1982, as amended at 53 FR 7868, Mar. 10, 1988; 54 FR 11372, Mar. 20, 1989; 76 FR 81805, Dec. 29, 2011]

CHAPTER ELEVEN


COSTS OF GOING PUBLIC


The actual costs to go public are as follows:


1. Filing Fees payable to the SEC are currently $124.50 per each million dollars to be raised a $10,000,000 raise for example will cost $1,245.00 filing fee. There is no requirement that an offering should be for $10 Million dollars. The listing requirements and reporting requirements are the same whether more or less is sought to be raised.


2. Transfer Agent retainer [by year] approximately $5,000.00 will generally include CUSIP registration (one-time charge) approximately $500.00 and stock design and printing approximately $500.00.

A transfer agent performs three main functions:

1. Issue and cancel certificates to reflect changes in ownership.

[a] when a company declares a stock dividend or stock split, the transfer agent issues new shares.  

[b] Transfer agents keep records of who owns a company’s stocks and bonds and how those stocks and bonds are held

[c] Transfer agents also keep records of how many shares or bonds each investor owns.

2. Act as an intermediary for the company.

[a] A transfer agent may serve as the company’s paying agent to pay out interest, cash and stock dividends, or other distributions to stock

[b] Transfer agents can act as proxy agent e.g. sending out proxy materials, or as an exchange agent e.g. exchanging a company’s stock or bonds in a merger, or tender agent e.g. tendering shares in a tender offer, and/or mailing agent e.g. mailing the company’s quarterly, annual, and other reports.

3. Handle lost, destroyed, or stolen certificates.

3. Audited financials by CPA, [not financially involved with the company] based on bank account activity cash invested income and expenses, etc, for a company that is more then two years old…around $5,000 a year: two (2) years are required. A new company only has to provide one [1] year of audited financials.


4. SEC Attorney opinion letter $750.00, this is merely for his opinion that the stock can be delivered non-assessable and fully paid up after it is purchased


5. Cost to file through the SEC Electronic filing system [EDGAR} about $600.00 for about 60 pages [if there are any comment letters plan on another $600.00 for a separate filing, a comment letter is generally a request for additional disclosures] Generally there will be some comments where the SEC wants a disclosure clarified so you will be required to amend the registration. You are allowed ten [10] days from your receipt of the comment letter [generally sent by email] to make the amendment, or to give the SEC a time when you will make and file the amended registration. It is not uncommon to receive four [4] comment letters


6. The form ID filed for the EDGAR access codes… there is No charge for the form filing. A new form is filed annually I have attached this form as an addendum to the Index. Note it must be notarized.


7. A broker [market maker] to prepare and file the form 15c211 to go through FINRA for trading authorization…No Charge allowed Under FINRA a market maker can not charge to prepare the form. [The Broker is the Market Maker]


8. Printing costs for the prospectuses about $3,500.00 this may be increased as investors acquire stock Depending on the Market Maker you may be able to deliver the prospectus electronically. Stock can be advertised and sold through the Company website with the electronic delivery


9. Advertising prices vary…approximately $130.00 per news PR Release by News wires…and Pink Sheets has their own news service


10. Pink Sheets now requires that they are retained for your information uploads; the cost is $500.00 for the set up and $1,500.00 annually thereafter.


The actual cost: Under $20,000


Documents to be filed as exhibits:


1. Articles of Inc.

2. By Laws

3. The S1 circular

4. Any employment contracts

5. Any subscription agreements for the founders

6. The Adopted company code of ethics

CHAPTER TWELVE


PREPAIRING THE S1 REGISTRATION STATEMENT


The S1 Registration statement is very strait forward. (See Index to Exhibits in the back of the book on the CD provided for a sample of a completed S1 registration form)


In preparing the S1 statement the best advice that I can give anyone is (i) to answer the question fully, (ii) then state why you answered the question the way you did, and (iii) then state why the statement applies to you. When completing the S1 or any SEC forms use 10 point type. For this book I am using 12 point type which is easier to read


Following are the first two pages of the S1 registration form; this is how the finished product should appear


************************************************

As filed with the Securities and Exchange Commission on , 2014

Registration No.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT

Under

The Securities Act of 1933



Business and Commercial Funding, Inc.

(Exact name of Registrant as specified in its charter)

Utah 6199

(State or other jurisdiction of
incorporation or organization)

(Primary Standard Industrial
Classification Code Number)

(I.R.S. Employer
Identification Number)




xxxx W. Sunset Blvd. Suite 1-134
St. George, Utah 84770
(435) 674-xxxx

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Name
xxxx W. Sunset Blvd. Suite 1-134
St. George, Utah 84770
(435) 674-xxxx

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:





Name

xxxx W. Sunset Blvd. Suite 1-134
St. George, Utah 84770
(435) 674-xxxx



Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.


If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. [ ]


If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]


If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]


If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ]

(Do not check if a smaller reporting company) Smaller reporting company [X]


SEC 870 (02-08) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [X]



CALCULATION OF REGISTRATION FEE

Filing fee is calculated pursuant to Rule 457(o) under the Securities Act,

Title of Each Class of
Securities to be Registered

Proposed Maximum
Aggregate Offering

Price (1)(2)

Amount of Registration Fee






Class A common stock, par value $0.001 per share $ 10,000,000 $ 1,245.00


  1. Estimated solely for the purpose of computing the amount of the registration fee, in accordance with Rule 457(o) promulgated under the Securities Act of 1933.

  2. Includes offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any.


The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting any offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Prospectus (Subject to Completion)

Dated March ___, 2014


*************************************


Everything is self explanatory with the exception of the “Primary Standard Industrial
Classification Code Number.” The Standard Industrial Classification (SIC) is a system for classifying industries by a four-digit code. The system was established in the United States in 1937, it is used by government agencies to classify industry areas. Every area is represented by the industry code. I have provided the entire code as an exhibit on the CD which is provided.


This is how page three should appear:



**************************

Shares

Business and Commercial Funding, Inc


Class A Common Stock

Business and Commercial Funding, Inc., is offering shares of its Class “A” common stock, there are NO selling stockholders. This is our initial public offering, and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $0.50 and $1.00 per share.

Following this offering we will have two classes of authorized stock; Class A common stock, and Class B Preferred stock. The holders of Class A common stock will be entitled to one vote per share. The holders of Class B Preferred Stock will have no voting rights but will have a preference for dividends.

We expect to apply to list our Class “A” common stock on either the Bulletin Board or the Pink Sheets.

Investing in our Class “A” common stock involves risks. See “Risk Factors” beginning on page 14.


PRICE: $0.60 Per Share



Price to

Public


Underwriter Discounts

and Commission

Proceeds to BCF


Proceeds to Selling Shareholders

Per Share

$0.60

$0.042

$0.558

NA

Total

$10,000,000

$700,000

$9,300,000

NA

Business and Commercial Funding, Inc [“BCF”} is self underwriting this offering. BCF has not granted any underwriters the right to purchase additional shares to cover over-allotments.

The price to the public and allocation of shares will be determined primarily by an auction process. As part of this auction process, we are attempting to assess the market demand for our Class “A” common stock; and to set the size and price of this offering to meet that demand. Buyers hoping to capture profits shortly after our Class “A” common stock begins trading may be disappointed. The method for submitting bids and a more detailed description of this process are included in “Auction Process” beginning on page 22.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. It is expected that the shares will be delivered to purchasers on or about June 1, 2014


You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our Class “A” common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is complete and accurate only as of the date of the front cover regardless of the time of delivery of this prospectus or of any sale of shares; except where the context requires otherwise, in this prospectus, the “Company,” “Business and Commercial Funding, Inc” “BCF” “we,” “us” and “our” refer to Business and Commercial Funding, Inc, a UTAH corporation, and, where appropriate, its subsidiaries.


We have not undertaken any efforts to qualify this offering for offers to individual investors in any jurisdiction outside the U.S.; therefore, individual investors located outside the U.S. should not expect to be eligible to participate in this offering.



**********************************



Page 4 is your Table of Contents



TABLE OF CONTENTS

Special Note Regarding Forward-Looking Statements

5

Sarbanes-Oxley Disclosure

5

Election under Rule 229.10f

5

Item 101: and Item 511-Description of Business

5

Item 201-Market Price, Dividends and description of Capital Stock

6

Item 301-Selected Financial Data

6

Financial Projections

6-8

Item 302-Supplemental financial information

8

Item 303-Managemen Discussion/ Analysis of Financial Condition and Result of Operations

8

Item 305-Disclosures about Market Risk

9

Item 402- Executive Compensation, and shares eligible for future sale

10

Item 404- Certain Relationships and Related Party Transactions

11

Item 407- Corporate Governance and Management

12

Item 503: Prospectus Summary Risk Factors, and Ratio of Earnings to Fixed Charges:

13

Item 503(a) -Prospectus Summary

13

Item 503(b) -Risk Factors

14-17

Item 503(c) -Ratio of Earnings and Fixed Charges

18

Item 504 -Use of Proceeds

20

Item 506- Dilution

20

Item 507. Selling security holders

21

Item 508- Plan of distribution

21

Item 509- Description of securities to be registered

21

Item 510- Experts: Interest of names experts and counsel

21

Underwriters

21

Item 401[f] Legal Matters

21

Experts

21

Where You Can Find Additional Information

21

Item 512- Undertakings

22

Financial Statements

22


Next, we have to make a required disclosure in compliance with The Sarbanes-Oxley act. The act requires two disclosures


This is how I have answered the required disclosure:


Sarbanes-Oxley Disclosure: Business and Commercial Funding, Inc., does not at this time have an audit, compensation, and nominating corporate governance committees, or an audit committee financial expert. WE plan to list on the Pink Sheets and/or the Bulletin Board and these committees are not currently required for either the Pink Sheet or Bulletin Board listing. In addition, as a small company filer and non-accelerated filer we can apply SEC Rule 33-9142 that permanently exempts registrants that are neither accelerated nor large accelerated filers as defined by Rule 12b-2 of the Securities and Exchange Act of 1934 from Section 404(b) internal control audit requirement. We meet the standard because [1] the company’s aggregate worldwide market value of the voting and non-voting common equity held by its non-affiliates are less then $75,000,000 as of the last business day of the issuer’s most recently completed second fiscal quarter; [2] The company has not been subject to the requirements of section 13(a) or 15(d) of the Act (15 U.S.C. 78m or 78o(d)) for a period of at least twelve calendar months; [3] The issuer has not filed at least one annual report pursuant to section 13(a) or 15(d) of the Act; and [4] The issuer is eligible to use the requirements for smaller reporting companies in part 229 of this chapter for its annual and quarterly reports.

Business and Commercial Funding does have a code of ethics which is provided as an exhibit


********************************

NOTE: 15 U.S.C. 78m or 78o(d) refer to companies that are already required to file periodic reports with the SEC. As a new IPO this does not apply to you.


Ok, take a deep breath and don’t panic! This is an actual response for a company that expects to list on the Bulletin Board, and or the Pink Sheets. And one I have used. Simply put, if you are just getting ready to file a registration statement with the SEC which is what the S1 is, then none of the regulations, or rules in the answer would apply to you


Let’s move on to determine the shares that will be offered to the public and how we calculate the offering price:









**********************

Calculation of Registration Fee


Title of Each Class

of Securities to

be Registered


Amount to be

Registered



Proposed Maximum

Offering

Price Per Unit


Proposed Maximum

Aggregate

Offering Price

Amount of

Registration Fee



Note: Specific details relating to the fee calculation shall be furnished in notes to the table, including references to provisions of Rule 457 (§230.457 of this chapter) relied upon, if the basis of the calculation is not otherwise evident from the information presented in the table. If the filing fee is calculated pursuant to Rule 457(o) under the Securities Act, only the title of the class of securities to be registered, the proposed maximum aggregate offering price for that class of securities and the amount of registration fee need to appear in the Calculation of Registration Fee table. Any difference between the dollar amount of securities registered for such offerings and the dollar amount of securities sold may be carried forward on a future registration statement pursuant to Rule 429 under the Securities Act.


******************************

Rule 457(o) provides: Where an issuer registers an offering of securities, the registration fee may be calculated on the basis of the maximum aggregate offering price of all the securities listed in the ‘‘Calculation of Registration Fee’’ table. The number of shares or units of securities need not be included in the ‘‘Calculation of Registration Fee’’ Table. If the maximum aggregate offering price increases prior to the effective date of the registration statement, a pre-effective amendment must be filed to increase the maximum dollar value being registered and the additional filing fee shall be paid.


This table is how I calculate the registration fee


CALCULATION OF REGISTRATION FEE

Filing fee is calculated pursuant to Rule 457(o) under the Securities Act,

Title of Each Class of
Securities to be Registered

Proposed Maximum
Aggregate Offering

Price (1)(2)

Amount of Registration Fee






Class A common stock, par value $0.001 per share $ 10,000,000 $ 1,245.00


SEC Form question: If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: [ ] (This box should not be checked unless you plan on a delayed offering; as a start up company this will generally not involve your company)


SEC Form question: If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] (This deals with post effective amendments and generally will not apply to your company)


SEC Form question: If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] (Again this section deals with post effective amendments and will not involve your filing)


SEC Form question: If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] (Again this section deals with post effective amendments and will not involve your filing)


SEC Form question: Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


*See the definition of accelerated filer and large accelerated filer on Page_____)

You will not be either unless you have tremendous assets which as a start up, you probably won’t have. In most all cases you would be a …Smaller reporting company” see this definition at page _____


Election under 17 CFR 229.10 f; (17 CFR 229.10f) Smaller reporting companies


(f) Smaller reporting companies. The requirements of this part apply to smaller reporting companies. A smaller reporting company may comply with either the requirements applicable to smaller reporting companies or the requirements applicable to other companies for each item, unless the requirements for smaller reporting companies specify that smaller reporting companies must comply with the smaller reporting company requirements. The following items of this part set forth requirements for smaller reporting companies that are different from requirements applicable to other companies:


The next disclosure (Election under Rule 229.10(f) (17 CFR 229.10f) this is not a question, it is an election to use a simpler format.


Disclosure and election:


We are a Smaller reporting company. And elect to provide the information required under Rule 229.10(f) (17 CFR 229.10 f). This rule applies to us because (1) we are not an investment company, (2) we are not an asset-backed issuer (as defined in § 229.1101), (3) we are not a majority-owned subsidiary of a parent that is not a smaller reporting company and that: (4) we do not have $75 million in a public float or (5) $50 million in annual revenues. (6) we are not a reporting company under the exchange act. We are a new company and have had no operating experience or income.


Item 101: and Item 511: Description of Business:


Here write, a description of your business, or business idea. The length of the response is not an issue here the information is what is important. State the information as clearly as you can so anyone can understand it


Item 201: Market price of, and dividends on registrant's common equity and related stockholder matters:


The information required by this section is as follows:


If the information called for by this paragraph (a) is being presented in a registration statement on Form S-1 (§ 239.11 of this chapter) under the Securities Act or on Form 10 (§ 249.210 of this chapter) under the Exchange Act relating to a class of common equity for which at the time of filing there is no established United States public trading market, indicate the amount(s) of common equity:

(i) That is subject to outstanding options or warrants to purchase, or securities convertible into, common equity of the registrant;

(ii) That could be sold pursuant to § 230.144 (rule 144) of this chapter or that the registrant has agreed to register under the Securities Act for sale by security holders; or

(iii) That is being, or has been publicly proposed to be, publicly offered by the registrant (unless such common equity is being offered pursuant to an employee benefit plan or dividend reinvestment plan), the offering of which could have a material effect on the market price of the registrant's common equity.

(b) Holders.

(1) Set forth the approximate number of holders of each class of common equity of the registrant as of the latest practicable date.

(2) If the information called for by this paragraph (b) is being presented in a registration statement filed pursuant to the Securities Act or a proxy statement or information statement filed pursuant to the Exchange Act that relates to an acquisition, business combination or other reorganization, indicate the effect of such transaction on the amount and percentage of present holdings of the registrant's common equity owned beneficially by (i) any person (including any group as that term is used in section 13(d)(3) of the Exchange Act) who is known to the registrant to be the beneficial owner of more than five percent of any class of the registrant's common equity and (ii) each director and nominee and (iii) all directors and officers as a group, and the registrant's present commitments to such persons with respect to the issuance of shares of any class of its common equity.


(c) Dividends.

(1) State the frequency and amount of any cash dividends declared on each class of its common equity by the registrant for the two most recent fiscal years and any subsequent interim period for which financial statements are required to be presented by § 210.3 of Regulation S-X. Where there are restrictions (including, where appropriate, restrictions on the ability of registrant's subsidiaries to transfer funds to the registrant in the form of cash dividends, loans or advances) that currently materially limit the registrant's ability to pay such dividends or that the registrant reasonably believes are likely to limit materially the future payment of dividends on the common equity so state and either (i) describe briefly (where appropriate quantify) such restrictions, or (ii) cross reference to the specific discussion of such restrictions in the Management's Discussion and Analysis of financial condition and operating results prescribed by Item 303 of Regulation S-K (§ 229.303) and the description of such restrictions required by Regulation S-X in the registrant's financial statements.


(2) Where registrants have a record of paying no cash dividends although earnings indicate an ability to do so, they are encouraged to consider the question of their intention to pay cash dividends in the foreseeable future and, if no such intention exists, to make a statement of that fact in the filing. Registrants which have a history of paying cash dividends also are encouraged to indicate whether they currently expect that comparable cash dividends will continue to be paid in the future and, if not, the nature of the change in the amount or rate of cash dividend payments.


(d) Securities authorized for issuance under equity compensation plans.

(1) In the following tabular format, provide the information specified in paragraph (d)(2) of this Item as of the end of the most recently completed fiscal year with respect to compensation plans (including individual compensation arrangements) under which equity securities of the registrant are authorized for issuance, aggregated as follows:

(i) All compensation plans previously approved by security holders; and

(ii) All compensation plans not previously approved by security holders.


Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))


(a)

(b)

(c)

Equity compensation plans approved by security holders




Equity compensation plans not approved by security holders




Total




Equity Compensation Plan Information

(2) The table shall include the following information as of the end of the most recently completed fiscal year for each category of equity compensation plan described in paragraph (d)(1) of this Item:

(i) The number of securities to be issued upon the exercise of outstanding options, warrants and rights (column (a));

(ii) The weighted-average exercise price of the outstanding options, warrants and rights disclosed pursuant to paragraph (d)(2)(i) of this Item (column (b)); and

(iii) Other than securities to be issued upon the exercise of the outstanding options, warrants and rights disclosed in paragraph (d)(2)(i) of this Item, the number of securities remaining available for future issuance under the plan (column (c)).

(3) For each compensation plan under which equity securities of the registrant are authorized for issuance that was adopted without the approval of security holders, describe briefly, in narrative form, the material features of the plan.

Instructions to paragraph (d).

1. Disclosure shall be provided with respect to any compensation plan and individual compensation arrangement of the registrant (or parent, subsidiary or affiliate of the registrant) under which equity securities of the registrant are authorized for issuance to employees or non-employees (such as directors, consultants, advisors, vendors, customers, suppliers or lenders) in exchange for consideration in the form of goods or services as described in FASB ASC Topic 718, Compensation—Stock Compensation, and FASB ASC Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees”.

No disclosure is required with respect to

a. Any plan, contract or arrangement for the issuance of warrants or rights to all security holders of the registrant as such on a pro rata basis (such as a stock rights offering) or

b. Any employee benefit plan that is intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code (26 U.S.C. 401(a)).


2. For purposes of this paragraph, an “individual compensation arrangement” includes, but is not limited to, the following: a written compensation contract within the meaning of “employee benefit plan” under § 230.405 of this chapter and a plan (whether or not set forth in any formal document) applicable to one person as provided under Item 402(a)(6)(ii) of Regulation S-K (§ 229.402(a)(6)(ii)).


3. If more than one class of equity security is issued under its equity compensation plans, a registrant should aggregate plan information for each class of security.


4. A registrant may aggregate information regarding individual compensation arrangements with the plan information required under paragraph (d)(1)(i) and (ii) of this Item, as applicable.


5. A registrant may aggregate information regarding a compensation plan assumed in connection with a merger, consolidation or other acquisition transaction pursuant to which the registrant may make subsequent grants or awards of its equity securities with the plan information required under paragraph (d)(1)(i) and (ii) of this Item, as applicable. A registrant shall disclose on an aggregated basis in a footnote to the table the information required under paragraph (d)(2)(i) and (ii) of this Item with respect to any individual options, warrants or rights assumed in connection with a merger, consolidation or other acquisition transaction.


6. To the extent that the number of securities remaining available for future issuance disclosed in column (c) includes securities available for future issuance under any compensation plan or individual compensation arrangement other than upon the exercise of an option, warrant or right, disclose the number of securities and type of plan separately for each such plan in a footnote to the table.


7. If the description of an equity compensation plan set forth in a registrant's financial statements contains the disclosure required by paragraph (d)(3) of this Item, a cross-reference to such description will satisfy the requirements of paragraph (d)(3) of this Item.


8. If an equity compensation plan contains a formula for calculating the number of securities available for issuance under the plan, including, without limitation, a formula that automatically increases the number of securities available for issuance by a percentage of the number of outstanding securities of the registrant, a description of this formula shall be disclosed in a footnote to the table.


9. Except where it is part of a document that is incorporated by reference into a prospectus, the information required by this paragraph need not be provided in any registration statement filed under the Securities Act.


How I have answered this question:

First provide a table showing all shareholders and the amount and % of their ownership as well as the class of securities.



Shareholders of record/Founders

Class “A” Common

% held

Class “B” Preferred

Linda

17,000,000

.44%

00

Randy

14,000,000

.36%

00

Gus

2,000,000

.051%

00

Jack

2,000,000

.051%

00

Paula

2,000,000

.051%

00

Nick

100,000

.0025%

00

Joann

100,000

.0025%

00

Mike

100,000

.0025%

00

Jim

100,000

.0025%

00

Laurence

100,000

.0025%

00

Mark

100,000

.0025%

00

Nicholas

100,000

.0025%

00

Brandon

100,000

.0025%

00

Marshall

100,000

.0025%

00

Thomas

100,000

.0025%

00

Brent

100,000

.0025%

00

Charles

100,000

.0025%

00

John

100,000

.0025%

00

Arlene

100,000

.0025%

00


100,000

.0025%

00

Total Shares outstanding

38,500,000

100%

00


NOTE: How to determine the % of ownership: take the shares held by each shareholder and divide by the total number of shares that are issued and outstanding. Example Linda has 17,000,000 shares, divide that by 38,500,000 shares and the answer is .44%


I respond to the remainder of the question as follows:


1. We have not paid dividends in the past.

2. We have no stock warrants and no options

3 There are no outstanding options or warrants to purchase, or securities convertible into, common equity of the registrant;

4 There are no securities that can be sold subject to Rule 144

5 We have no employee benefit plans

6. We have twenty (20) shareholders of record as Identified in the table above all holding our Class “A” Common stock

7. We are not registering these shares for any acquisition, business combination or other reorganization plan.

8. The beneficial owners of the company, name and Name control _____ the majority of our standing shares

9. One director is the president of the company and his shares are stated above in the shareholder table; the other two are not financially involved with the company and are independent.

10. All directors and officers as a group, control ___% of the company and the registrant has no other present commitments to such persons with respect to the issuance of shares of any class of its common equity.

11. All outstanding shares are restricted.

12. We have no Securities authorized for issuance under any equity compensation plans


The Table required:


Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))


(a) None

(b) NA

(c) None

Equity compensation plans approved by security holders

NONE

NONE

NONE

Equity compensation plans not approved by security holders

NONE



NONE

NONE

Total (NONE)




Equity Compensation Plan Information


Item 202; Description of securities to be registered.


We are registering our Class “A” Common stock.


INFORMATION REGARDING SECURITIES:

BOTH OFFERED AND NOT OFFERED


Type of securities offered:

Class “A” Common Stock Only

Class “A” Common Stock: Offered

Class “B” Preferred Stock: Not offered

Cumulative voting rights

Yes

No

Other special voting rights

No

No

Preemptive rights to purchase in new issues of shares

Yes

Yes

Preference as to dividends or interest

No

Yes

Preference upon liquidation

No

Yes

Are the securities convertible?

No

Yes

Are the securities notes or other types of debt securities?

No

No

Are the securities callable or subject to redemption?

No

No

Are the securities intended to be collateralized by real property?

No

No

Conversion schedule

No

1 for 10

Sinking Fund

No

No


Note: Securities can be defined as you like, there is no precise method, this is how I designed the securities. You can design any number of types of Common stock even a class B common stock that has No voting rights.







Item 301: Selected financial data:


Smaller reporting companies are not required to respond to this item. However, I provide a table of projected income.


Example:


Projected Income/ Profitability / based on a 12 month cycle

Assuming $10M raised

Year 1

Year 2

Year 3

Year 4

Year 5

Based on 12 months results

$10,000,000

Invested

$14,800,000

Invested

$19,925,000

Invested

$25,605,080

Invested

$33,884,584

Invested

Interest Income [12%]

$1,200,000

$1,776,000

$2,391,000

$3,072,609

$4,066,150

Project loan Points [4] first year, [1] second year rollover. [1] point exit which is not discussed

$ 400,000

[1% of $5,M]

[4% of $9.8M]

would be $442,000

[1% of $9.8M]

[4% of $10M]

Would be $498,000

[1% of $10M]

[4% of $15,605,000] would be $624,200

[1% of $15,606,000]

[4% of $18,279,584]

Would be $887,183

Project equity participation [10%] Minimum

$5,000,000

$4,400,000

$5,000,000

$7,802,500

$9,139,842

Total Gross Profit

$6,.600,000

$7,118,000

$7,889,000

$11,499,309

$14,093,175

Operational Cost 10%

$ 660,000

$ 711,800

$ 788,900

$ 1,149,930

$ 1,409,317

Annual Net Profit before dividends

$6,000,000

$6,406,500

$7,100,100

$10,349,379

$12,683,858

Dividends (20 % of Profit)

$1,200,000

$1,281,300

$1,420,020

$ 2,069,875

$ 2,536,771

Net Bottom Line Profit…

$4,800,000

$5,125,200

$5,680,080

$8,279,504

$10,147,087


Projected stock Book Value, after the fifth year and with the assets of the company anticipated to be [$46,568,442 in active loans] and assuming there are 100,000,000 shares outstanding, the projected book value of $0.465; the trading value of the company common shares would be anticipated to trade at around $4.65 [10X book value] or higher.


[NOTE 1] We assume that 50% of the loans will roll over for a second year

[NOTE 2] We assume that our 10% equity for the loan will equal 50% or more of the actual loan amount when the project is completed, refinanced or sold

[NOTE 3] Our Maximum loan term will be two [2] years

[NOTE 4] Our minimum interest will be 12% and 4 points with 1 point additional for the second year extension, and a [1] point exit.

[NOTE 5] Our loans are all bridge loans no take out loans

[NOTE 6] we have not set aside funds for anticipated losses, as we will control the money on each deal and each will be collateralized.


Item 302: Supplementary financial information: How I respond:

We are a Smaller reporting company. A registrant that qualifies as a smaller reporting company, as defined by § 229.10(f)(1), is not required to provide the information required by this Item. We will report that we have no net sales, or gross profit, we are a new company with no prior sales or income.


We have no supplemental financial information to provide in addition to what our CPA has already provided. With the $10 Million this offering is expected to raise, we believe we will be in a position to develop a substantial income and expand our footprint as a commercial market lender resource while providing dividends to our investors and a real share value.


Item 303: Management's discussion and analysis of financial condition and results of operations:


My Response: We are a Smaller reporting companies., as defined by § 229.10(f)(1), we may provide the information required in paragraph (a)(3)(iv) of this Item for the last two most recent fiscal years of the registrant if we provide financial information on net sales and revenues and on income from continuing operations for only two years. A smaller reporting company is not required to provide the information required by paragraph (a)(5) of this Item. But we have provided the contractual table anyway


The company has had no operations in the last two years; this is a start up company. We have no off-balance sheet arrangements


Contractual Obligations Table

Payments due by period


Total Less then 1-3 3-5 More then

1 Year: Years: Years: 5 Years


[Long-Term Debt

Obligations]

None





[Capital Lease

Obligations]

None





[Operating Lease

Obligations]

None





[Purchase Obligations]

None





[Other Long-Term Liabilities

Reflected on the Registrant's

Balance Sheet under GAAP]

None





Total

None







Item 305: Quantitative and qualitative disclosures about market risk:


The Registrants shall provide, in their reporting currency, quantitative information about market risk as of the end of the latest fiscal year, in accordance with one of the following three disclosure alternatives. In preparing this quantitative information, registrants shall categorize market risk sensitive instruments into instruments entered into for trading purposes and instruments entered into for purposes other than trading purposes. Within both the trading and other than trading portfolios, separate quantitative information shall be presented, to the extent material, for each market risk exposure category (i.e., interest rate risk, foreign currency exchange rate risk, commodity price risk, and other relevant market risks, such as equity price risk). A registrant may use one of the three alternatives set forth in this section for all of the required quantitative disclosures about market risk. A registrant also may choose, from among the three alternatives, one disclosure alternative for market risk sensitive instruments entered into for trading purposes and another disclosure alternative for market risk sensitive instruments entered into for other than trading purposes. Alternatively, a registrant may choose any disclosure alternative, from among the three alternatives, for each risk exposure category within the trading and other than trading portfolios. The three disclosure alternatives are:

1. Tabular presentation of information related to market risk sensitive instruments; such information shall include fair values of the market risk sensitive instruments and contract terms sufficient to determine future cash flows from those instruments, categorized by expected maturity dates.

2.Tabular information relating to contract terms shall allow readers of the table to determine expected cash flows from the market risk sensitive instruments for each of the next five years. Comparable tabular information for any remaining years shall be displayed as an aggregate amount.

3. Within each risk exposure category, the market risk sensitive instruments shall be grouped based on common characteristics. Within the foreign currency exchange rate risk category, the market risk sensitive instruments shall be grouped by functional currency and within the commodity price risk category, the market risk sensitive instruments shall be grouped by type of commodity.


Instruments entered into for trading purposes

Instru Instruments entered into for non trading purposes

None

None



Item 401(f) Legal Maters


See 17 C.F.R. § 229.103 (2009) (disclosure of “legal proceedings”); id. § 229.401(f ) (disclosure concerning involvement of directors or executive officers in certain legal proceedings).


This is the information that Must be responded to…

(f) Involvement in certain legal proceedings. Describe any of the following events that occurred during the past ten years and that are material to an evaluation of the ability or integrity of any director, person nominated to become a director or executive officer of the registrant:

(1) A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii) Engaging in any type of business practice; or

(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

(5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

(7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

(i) Any Federal or State securities or commodities law or regulation; or

(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26) )), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29) )), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Instructions to paragraph (f) of Item 401: 1. For purposes of computing the ten-year period referred to in this paragraph, the date of a reportable event shall be deemed the date on which the final order, judgment or decree was entered, or the date on which any rights of appeal from preliminary orders, judgments, or decrees have lapsed. With respect to bankruptcy petitions, the computation date shall be the date of filing for uncontested petitions or the date upon which approval of a contested petition became final.

2. If any event specified in this paragraph (f) has occurred and information in regard thereto is omitted on the grounds that it is not material, the registrant may furnish to the Commission, at time of filing (or at the time preliminary materials are filed, or ten days before definitive materials are filed in preliminary filing is not required, pursuant to Rule 14a-6 or 14c-5 under the Exchange Act (§§ 240.14a-6  and 240-14c-5 of this chapter)), as supplemental information and not as part of the registration statement, report, or proxy or information statement, materials to which the omission relates, a description of the event and a statement of the reasons for the omission of information in regard thereto.

3. The registrant is permitted to explain any mitigating circumstances associated with events reported pursuant to this paragraph.

4. If the information called for by this paragraph (f) is being presented in a proxy or information statement, no information need be given respecting any director whose term of office as a director will not continue after the meeting to which the statement relates.

5. This paragraph (f)(7) shall not apply to any settlement of a civil proceeding among private litigants.

(g) Promoters and control persons.

(1) Registrants, which have not been subject to the reporting requirements of section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a)  or 78  o(d)) for the twelve months immediately prior to the filing of the registration statement, report, or statement to which this Item is applicable, and which had a promoter at any time during the past five fiscal years, shall describe with respect to any promoter, any of the events enumerated in paragraphs (f)(1) through (f)(6) of this Item that occurred during the past five years and that are material to a voting or investment decision.

(2) Registrants, which have not been subject to the reporting requirements of section 13(a) or 15(d) of the Exchange Act for the twelve months immediately prior to the filing of the registration statement, report, or statement to which this Item is applicable, shall describe with respect to any control person, any of the events enumerated in paragraphs (f)(1) through (f)(6) of this section that occurred during the past five years and that are material to a voting or investment decision.

Instructions to paragraph (g) of Item 401: 1. Instructions 1. through 3. to paragraph (f) shall apply to this paragraph (g).

2. Paragraph (g) shall not apply to any subsidiary of a registrant which has been reporting pursuant to Section 13(a) or 15(d) of the Exchange Act for the twelve months immediately prior to the filing of the registration statement, report or statement.


Response…If none of these areas apply then you should state that in the past 10 years no officer, Director, Promoter or 10% holder of the securities have either been bankrupt, had litigation that they were involved in that was either civil or criminal except as follows:…and if none state none.


Item 402 Executive Compensation


(a)(2)This Item requires clear, concise and understandable disclosure of all plan and non-plan compensation awarded to, earned by, or paid to the named executive officers designated under paragraph (a)(3) of this Item, and directors covered by paragraph (k) of this Item, by any person for all services rendered in all capacities to the registrant and its subsidiaries, unless otherwise specifically excluded from disclosure in this Item. All such compensation shall be reported pursuant to this Item, even if also called for by another requirement, including transactions between the registrant and a third party where a purpose of the transaction is to furnish compensation to any such named executive officer or director. No amount reported as compensation for one fiscal year need be reported in the same manner as compensation for a subsequent fiscal year; amounts reported as compensation for one fiscal year may be required to be reported in a different manner pursuant to this Item.


(3) Persons covered. Disclosure shall be provided pursuant to this Item for each of the following (the “named executive officers”):

(i) All individuals serving as the registrant's principal executive officer or acting in a similar capacity during the last completed fiscal year (“PEO”), regardless of compensation level;

(ii) All individuals serving as the registrant's principal financial officer or acting in a similar capacity during the last completed fiscal year (“PFO”), regardless of compensation level;

(iii) The registrant's three most highly compensated executive officers other than the PEO and PFO who were serving as executive officers at the end of the last completed fiscal year; and

(iv) Up to two additional individuals for whom disclosure would have been provided pursuant to paragraph (a)(3)(iii) of this Item but for the fact that the individual was not serving as an executive officer of the registrant at the end of the last completed fiscal year.


SUMMARY COMPENSATION TABLE

__________________________________________________________________________________

Non

Equity

Incentive All Plan Other

Stock Option Compen- Compen-

Name & Principal Salary Bonus Awards: Awards sation sation Total

Position Year ( ) ( ) ( ) ( ) ( ) ( ) ( )

Gus 2013 0 0 2,000,000 0 0 0 0

President/Chairman Common

Of the Board of Directors Shares


Linda 2013 0 0 17,000,000 0 0 0 0

Treasurer Common

Shares

Paula i

Secretary 2013 0 0 2,000,000 0 0 0 0

Common

Shares

Randy 5%

Security Holder 2013 0 0 14,000,000 0 0 0 0

Common

Shares

­­­­­­­­­­­­­­­­__________________________________________________________________________________


We have no pension, health, annuity, bonus, insurance, stock options, or similar benefit plans. No stock options or stock appreciation rights have been granted to any of our directors, managers or executive officers; none of our directors or executive officers exercised any stock options or stock appreciation rights; and none of them hold unexercised stock options. We have no long-term incentive plans.


There has been no current compensation to any executives; they all have their separate incomes at present. All money has been reinvested in the development of the company. We anticipate a reasonable compensation for officers and management to be in year one, $60,000 annually, moreover all salaries are anticipated to come from the Points obtained from the individual loans, and not from the actual raise itself. As the model is established and becomes profitable, which is believed will occur within months of completing the raise; we have allowed a salary increase in year two from $60,000 annually to $120,000 annually, this is for each executive and manager. We also plan after year two to employ a Compensation Consultant as is now required under Dodd-Frank section 952.


Shares that will be available for future sales


The company has authorized 500,000,000 shares of our common stock Class “A” with this offering we anticipate that there will be 40.000,000 shares outstanding; that leaves 460,000,000 shares of which some or all could be utilized in a second offering.



Item 404: Transactions with related persons, promoters and certain control persons:


(a) Transactions with related persons. Describe any transaction, since the beginning of the registrant's last fiscal year, or any currently proposed transaction, in which the registrant was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest. Disclose the following information regarding the transaction:

(1) The name of the related person and the basis on which the person is a related person.

(2) The related person's interest in the transaction with the registrant, including the related person's position(s) or relationship(s) with, or ownership in, a firm, corporation, or other entity that is a party to, or has an interest in, the transaction.

(3) The approximate dollar value of the amount involved in the transaction.

(4) The approximate dollar value of the amount of the related person's interest in the transaction, which shall be computed without regard to the amount of profit or loss.

(5) In the case of indebtedness, disclosure of the amount involved in the transaction shall include the largest aggregate amount of principal outstanding during the period for which disclosure is provided, the amount thereof outstanding as of the latest practicable date, the amount of principal paid during the periods for which disclosure is provided, the amount of interest paid during the period for which disclosure is provided, and the rate or amount of interest payable on the indebtedness.

(6) Any other information regarding the transaction or the related person in the context of the transaction that is material to investors in light of the circumstances of the particular transaction.


Instructions to Item 404(a). 1. For the purposes of paragraph (a) of this Item, the term related person means:

a. Any person who was in any of the following categories at any time during the specified period for which disclosure under paragraph (a) of this Item is required:

i. Any director or executive officer of the registrant;

ii. Any nominee for director, when the information called for by paragraph (a) of this Item is being presented in a proxy or information statement relating to the election of that nominee for director; or

iii. Any immediate family member of a director or executive officer of the registrant, or of any nominee for director when the information called for by paragraph (a) of this Item is being presented in a proxy or information statement relating to the election of that nominee for director, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such director, executive officer or nominee for director, and any person (other than a tenant or employee) sharing the household of such director, executive officer or nominee for director; and

b. Any person who was in any of the following categories when a transaction in which such person had a direct or indirect material interest occurred or existed:

i. A security holder covered by Item 403(a) (§ 229.403(a)); or

ii. Any immediate family member of any such security holder, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such security holder, and any person (other than a tenant or employee) sharing the household of such security holder.

2. For purposes of paragraph (a) of this Item, a transaction includes, but is not limited to, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships.

3. The amount involved in the transaction shall be computed by determining the dollar value of the amount involved in the transaction in question, which shall include:

a. In the case of any lease or other transaction providing for periodic payments or installments, the aggregate amount of all periodic payments or installments due on or after the beginning of the registrant's last fiscal year, including any required or optional payments due during or at the conclusion of the lease or other transaction providing for periodic payments or installments; and

b. In the case of indebtedness, the largest aggregate amount of all indebtedness outstanding at any time since the beginning of the registrant's last fiscal year and all amounts of interest payable on it during the last fiscal year.

4. In the case of a transaction involving indebtedness:

a. The following items of indebtedness may be excluded from the calculation of the amount of indebtedness and need not be disclosed: Amounts due from the related person for purchases of goods and services subject to usual trade terms, for ordinary business travel and expense payments and for other transactions in the ordinary course of business;

b. Disclosure need not be provided of any indebtedness transaction for the related persons specified in Instruction 1.b. to paragraph (a) of this Item; and

c. If the lender is a bank, savings and loan association, or broker-dealer extending credit under Federal Reserve Regulation T (12 CFR part 220) and the loans are not disclosed as nonaccrual, past due, restructured or potential problems (see Item III.C.1. and 2. of Industry Guide 3, Statistical Disclosure by Bank Holding Companies (17 CFR 229.802(c))), disclosure under paragraph (a) of this Item may consist of a statement, if such is the case, that the loans to such persons:

i. Were made in the ordinary course of business;

ii. Were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender; and

iii. Did not involve more than the normal risk of collectibility or present other unfavorable features.

5.a. Disclosure of an employment relationship or transaction involving an executive officer and any related compensation solely resulting from that employment relationship or transaction need not be provided pursuant to paragraph (a) of this Item if:

i. The compensation arising from the relationship or transaction is reported pursuant to Item 402 (§ 229.402); or

ii. The executive officer is not an immediate family member (as specified in Instruction 1 to paragraph (a) of this Item) and such compensation would have been reported under Item 402 (§ 229.402) as compensation earned for services to the registrant if the executive officer was a named executive officer as that term is defined in Item 402(a)(3) (§ 229.402(a)(3)), and such compensation had been approved, or recommended to the board of directors of the registrant for approval, by the compensation committee of the board of directors (or group of independent directors performing a similar function) of the registrant.

b. Disclosure of compensation to a director need not be provided pursuant to paragraph (a) of this Item if the compensation is reported pursuant to Item 402(k) (§ 229.402(k)).

6. A person who has a position or relationship with a firm, corporation, or other entity that engages in a transaction with the registrant shall not be deemed to have an indirect material interest within the meaning of paragraph (a) of this Item where:

a. The interest arises only:

i. From such person's position as a director of another corporation or organization that is a party to the transaction; or

ii. From the direct or indirect ownership by such person and all other persons specified in Instruction 1 to paragraph (a) of this Item, in the aggregate, of less than a ten percent equity interest in another person (other than a partnership) which is a party to the transaction; or

iii. From both such position and ownership; or

b. The interest arises only from such person's position as a limited partner in a partnership in which the person and all other persons specified in Instruction 1 to paragraph (a) of this Item, have an interest of less than ten percent, and the person is not a general partner of and does not hold another position in the partnership.

7. Disclosure need not be provided pursuant to paragraph (a) of this Item if:

a. The transaction is one where the rates or charges involved in the transaction are determined by competitive bids, or the transaction involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority;

b. The transaction involves services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services; or

c. The interest of the related person arises solely from the ownership of a class of equity securities of the registrant and all holders of that class of equity securities of the registrant received the same benefit on a pro rata basis.

(b) Review, approval or ratification of transactions with related persons.

(1) Describe the registrant's policies and procedures for the review, approval, or ratification of any transaction required to be reported under paragraph (a) of this Item. While the material features of such policies and procedures will vary depending on the particular circumstances, examples of such features may include, in given cases, among other things:

(i) The types of transactions that are covered by such policies and procedures;

(ii) The standards to be applied pursuant to such policies and procedures;

(iii) The persons or groups of persons on the board of directors or otherwise who are responsible for applying such policies and procedures; and

(iv) A statement of whether such policies and procedures are in writing and, if not, how such policies and procedures are evidenced.

(2) Identify any transaction required to be reported under paragraph (a) of this Item since the beginning of the registrant's last fiscal year where such policies and procedures did not require review, approval or ratification or where such policies and procedures were not followed.


Instruction to Item 404(b). Disclosure need not be provided pursuant to this paragraph regarding any transaction that occurred at a time before the related person became one of the enumerated persons in Instruction 1.a.i., ii., or iii. to Item 404(a) if such transaction did not continue after the related person became one of the enumerated persons in Instruction 1.a.i., ii., or iii. to Item 404(a).


(c) Promoters and certain control persons.

(1) Registrants that are filing a registration statement on Form S-1 under the Securities Act (§ 239.11 of this chapter) or on Form 10 under the Exchange Act (§ 249.210 of this chapter) and that had a promoter at any time during the past five fiscal years shall:

(i) State the names of the promoter(s), the nature and amount of anything of value (including money, property, contracts, options or rights of any kind) received or to be received by each promoter, directly or indirectly, from the registrant and the nature and amount of any assets, services or other consideration therefore received or to be received by the registrant; and

(ii) As to any assets acquired or to be acquired by the registrant from a promoter, state the amount at which the assets were acquired or are to be acquired and the principle followed or to be followed in determining such amount, and identify the persons making the determination and their relationship, if any, with the registrant or any promoter. If the assets were acquired by the promoter within two years prior to their transfer to the registrant, also state the cost thereof to the promoter.

(2) Registrants shall provide the disclosure required by paragraphs (c)(1)(i) and (c)(1)(ii) of this Item as to any person who acquired control of a registrant that is a shell company, or any person that is part of a group, consisting of two or more persons that agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of a registrant, that acquired control of a registrant that is a shell company. For purposes of this Item, shell company has the same meaning as in Rule 405 under the Securities Act (17 CFR 230.405) and Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

(d) Smaller reporting companies. A registrant that qualifies as a “smaller reporting company,” as defined by § 229.10(f)(1), must provide the following information in order to comply with this Item:

(1) The information required by paragraph (a) of this Item for the period specified there for a transaction in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the smaller reporting company's total assets at year end for the last two completed fiscal years;

(2) The information required by paragraph (c) of this Item; and

(3) A list of all parents of the smaller reporting company showing the basis of control and as to each parent, the percentage of voting securities owned or other basis of control by its immediate parent, if any.


Instruction to Item 404(d). 1. Include information for any material underwriting discounts and commissions upon the sale of securities by the smaller reporting company where any of the persons specified in paragraph (a) of this Item was or is to be a principal underwriter or is a controlling person or member of a firm that was or is to be a principal underwriter.

2. For smaller reporting companies information shall be given for the period specified in paragraph (a) of this Item and, in addition, for the fiscal year preceding the small reporting company's last fiscal year.


Definition of a Promoter:

"Promoter" includes:

(i) Any person who, acting alone or in conjunction with one or more other persons, directly or indirectly takes initiative in founding and organizing the business or enterprise of an issuer; or

(ii) Any person who, in connection with the founding and organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both services and property, 10 percent or more of any class of securities of the issuer or 10 percent or more of the proceeds from the sale of any class of such securities. However, a person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this paragraph if such person does not otherwise take part in founding and organizing the enterprise. Securities Act of 1933, Rule 405, 17 C.F.R. § 230.405.

Response:


Promoters: Jack xxxx is the promoter of the company he received 2,000,000 shares and will receive $100,000 from the raise in consideration for developing the company, bringing everyone together and organizing the participants in completing the S1 Registration statement to bring the company public.


Transactions:


No transactions have occurred at all; there are no compensation plans or arrangements between any officer, director or 5% beneficial owner of the company for any commission or remuneration of any kind either in stock, stock options, warrants or cash, and no such compensation was paid in the past two years prior to this registration statement

Moreover, as the officers and directors of the company are also independent commercial loan brokers and or insurance agents and we anticipate they may also receive compensation from the borrower, in the form of points when bringing the client to BCF. In addition, our Secretary is a Licensed Insurance agent and may receive referrals for Commercial default insurance from our borrowers and will be able to receive commissions therefrom. We understand the relationships and do not consider this activity to be a conflict of interest as we are in the commercial loan business and provide referrals and work with all commercial loan brokers. However there have been no commissions or other fees made to the date of this filing and anticipate none in the future.


Item 407: Corporate governance and management:


a) Director independence. Identify each director and, when the disclosure called for by this paragraph is being presented in a proxy or information statement relating to the election of directors, each nominee for director, that is independent under the independence standards applicable to the registrant under paragraph (a)(1) of this Item.


In addition, if such independence standards contain independence requirements for committees of the board of directors, identify each director that is a member of the compensation, nominating or audit committee that is not independent under such committee independence standards. If the registrant does not have a separately designated audit, nominating or compensation committee or committee performing similar functions, the registrant must provide the disclosure of directors that are not independent with respect to all members of the board of directors applying such committee independence standards.


(1) In determining whether or not the director or nominee for director is independent for the purposes of paragraph (a) of this Item, the registrant shall use the applicable definition of independence, as follows:

(i) If the registrant is a listed issuer whose securities are listed on a national securities exchange or in an inter-dealer quotation system which has requirements that a majority of the board of directors be independent, the registrant's definition of independence that it uses for determining if a majority of the board of directors is independent in compliance with the listing standards applicable to the registrant. When determining whether the members of a committee of the board of directors are independent, the registrant's definition of independence that it uses for determining if the members of that specific committee are independent in compliance with the independence standards applicable for the members of the specific committee in the listing standards of the national securities exchange or inter-dealer quotation system that the registrant uses for determining if a majority of the board of directors are independent. If the registrant does not have independence standards for a committee, the independence standards for that specific committee in the listing standards of the national securities exchange or inter-dealer quotation system that the registrant uses for determining if a majority of the board of directors are independent.


(ii) If the registrant is not a listed issuer, a definition of independence of a national securities exchange or of an inter-dealer quotation system which has requirements that a majority of the board of directors be independent, and state which definition is used. Whatever such definition the registrant chooses, it must use the same definition with respect to all directors and nominees for director. When determining whether the members of a specific committee of the board of directors are independent, if the national securities exchange or national securities association whose standards are used has independence standards for the members of a specific committee, use those committee specific standards.


(iii) If the information called for by paragraph (a) of this Item is being presented in a registration statement on Form S-1 (§ 239.11 of this chapter) under the Securities Act or on a Form 10 (§ 249.210 of this chapter) under the Exchange Act where the registrant has applied for listing with a national securities exchange or in an inter-dealer quotation system that has requirements that a majority of the board of directors be independent, the definition of independence that the registrant uses for determining if a majority of the board of directors is independent, and the definition of independence that the registrant uses for determining if members of the specific committee of the board of directors are independent, that is in compliance with the independence listing standards of the national securities exchange or inter-dealer quotation system on which it has applied for listing, or if the registrant has not adopted such definitions, the independence standards for determining if the majority of the board of directors is independent and if members of the committee of the board of directors are independent of that national securities exchange or inter-dealer quotation system.


(2) If the registrant uses its own definitions for determining whether its directors and nominees for director, and members of specific committees of the board of directors, are independent, disclose whether these definitions are available to security holders on the registrant's Web site. If so, provide the registrant's Web site address. If not, include a copy of these policies in an appendix to the registrant's proxy statement or information statement that is provided to security holders at least once every three fiscal years or if the policies have been materially amended since the beginning of the registrant's last fiscal year. If a current copy of the policies is not available to security holders on the registrant's Web site, and is not included as an appendix to the registrant's proxy statement or information statement, identify the most recent fiscal year in which the policies were so included in satisfaction of this requirement.

(3) For each director and nominee for director that is identified as independent, describe, by specific category or type, any transactions, relationships or arrangements not disclosed pursuant to Item 404(a) (§ 229.404(a)), or for investment companies, Item 22(b) of Schedule 14A (§ 240.14a-101 of this chapter), that were considered by the board of directors under the applicable independence definitions in determining that the director is independent.


Instructions to Item 407(a).

1. If the registrant is a listed issuer whose securities are listed on a national securities exchange or in an inter-dealer quotation system which has requirements that a majority of the board of directors be independent, and also has exemptions to those requirements (for independence of a majority of the board of directors or committee member independence) upon which the registrant relied, disclose the exemption relied upon and explain the basis for the registrant's conclusion that such exemption is applicable. The same disclosure should be provided if the registrant is not a listed issuer and the national securities exchange or inter-dealer quotation system selected by the registrant has exemptions that are applicable to the registrant. Any national securities exchange or inter-dealer quotation system which has requirements that at least 50 percent of the members of a small business issuer's board of directors must be independent shall be considered a national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be independent for the purposes of the disclosure required by paragraph (a) of this Item.

2. Registrants shall provide the disclosure required by paragraph (a) of this Item for any person who served as a director during any part of the last completed fiscal year, except that no information called for by paragraph (a) of this Item need be given in a registration statement filed at a time when the registrant is not subject to the reporting requirements of section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78 o(d)) respecting any director who is no longer a director at the time of effectiveness of the registration statement.

3. The description of the specific categories or types of transactions, relationships or arrangements required by paragraph (a)(3) of this Item must be provided in such detail as is necessary to fully describe the nature of the transactions, relationships or arrangements.


(b) Board meetings and committees; annual meeting attendance.

(1) State the total number of meetings of the board of directors (including regularly scheduled and special meetings) which were held during the last full fiscal year. Name each incumbent director who during the last full fiscal year attended fewer than 75 percent of the aggregate of:

(i) The total number of meetings of the board of directors (held during the period for which he has been a director); and

(ii) The total number of meetings held by all committees of the board on which he served (during the periods that he served).


(2) Describe the registrant's policy, if any, with regard to board members' attendance at annual meetings of security holders and state the number of board members who attended the prior year's annual meeting.

Instruction to Item 407(b)(2). In lieu of providing the information required by paragraph (b)(2) of this Item in the proxy statement, the registrant may instead provide the registrant's Web site address where such information appears.


(3) State whether or not the registrant has standing audit, nominating and compensation committees of the board of directors, or committees performing similar functions. If the registrant has such committees, however designated, identify each committee member, state the number of committee meetings held by each such committee during the last fiscal year and describe briefly the functions performed by each such committee. Such disclosure need not be provided to the extent it is duplicative of disclosure provided in accordance with paragraph (c), (d) or (e) of this Item.


(c) Nominating committee.

(1) If the registrant does not have a standing nominating committee or committee performing similar functions, state the basis for the view of the board of directors that it is appropriate for the registrant not to have such a committee and identify each director who participates in the consideration of director nominees.

(2) Provide the following information regarding the registrant's director nomination process:

(i) State whether or not the nominating committee has a charter. If the nominating committee has a charter, provide the disclosure required by Instruction 2 to this Item regarding the nominating committee charter;

(ii) If the nominating committee has a policy with regard to the consideration of any director candidates recommended by security holders, provide a description of the material elements of that policy, which shall include, but need not be limited to, a statement as to whether the committee will consider director candidates recommended by security holders;

(iii) If the nominating committee does not have a policy with regard to the consideration of any director candidates recommended by security holders, state that fact and state the basis for the view of the board of directors that it is appropriate for the registrant not to have such a policy;

(iv) If the nominating committee will consider candidates recommended by security holders, describe the procedures to be followed by security holders in submitting such recommendations;

(v) Describe any specific minimum qualifications that the nominating committee believes must be met by a nominating committee-recommended nominee for a position on the registrant's board of directors, and describe any specific qualities or skills that the nominating committee believes are necessary for one or more of the registrant's directors to possess;

(vi) Describe the nominating committee's process for identifying and evaluating nominees for director, including nominees recommended by security holders, and any differences in the manner in which the nominating committee evaluates nominees for director based on whether the nominee is recommended by a security holder, and whether, and if so how, the nominating committee (or the board) considers diversity in identifying nominees for director. If the nominating committee (or the board) has a policy with regard to the consideration of diversity in identifying director nominees, describe how this policy is implemented, as well as how the nominating committee (or the board) assesses the effectiveness of its policy;

(vii) With regard to each nominee approved by the nominating committee for inclusion on the registrant's proxy card (other than nominees who are executive officers or who are directors standing for re-election), state which one or more of the following categories of persons or entities recommended that nominee: Security holder, non-management director, chief executive officer, other executive officer, third-party search firm, or other specified source. With regard to each such nominee approved by a nominating committee of an investment company, state which one or more of the following additional categories of persons or entities recommended that nominee: Security holder, director, chief executive officer, other executive officer, or employee of the investment company's investment adviser, principal underwriter, or any affiliated person of the investment adviser or principal underwriter;

(viii) If the registrant pays a fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominees, disclose the function performed by each such third party; and

(ix) If the registrant's nominating committee received, by a date not later than the 120th calendar day before the date of the registrant's proxy statement released to security holders in connection with the previous year's annual meeting, a recommended nominee from a security holder that beneficially owned more than 5% of the registrant's voting common stock for at least one year as of the date the recommendation was made, or from a group of security holders that beneficially owned, in the aggregate, more than 5% of the registrant's voting common stock, with each of the securities used to calculate that ownership held for at least one year as of the date the recommendation was made, identify the candidate and the security holder or security holder group that recommended the candidate and disclose whether the nominating committee chose to nominate the candidate, provided, however, that no such identification or disclosure is required without the written consent of both the security holder or security holder group and the candidate to be so identified.


Instructions to Item 407(c)(2)(ix).

1. For purposes of paragraph (c)(2)(ix) of this Item, the percentage of securities held by a nominating security holder may be determined using information set forth in the registrant's most recent quarterly or annual report, and any current report subsequent thereto, filed with the Commission pursuant to the Exchange Act (or, in the case of a registrant that is an investment company registered under the Investment Company Act of 1940, the registrant's most recent report on Form N-CSR (§§ 249.331 and 274.128 of this chapter)), unless the party relying on such report knows or has reason to believe that the information contained therein is inaccurate.

2. For purposes of the registrant's obligation to provide the disclosure specified in paragraph (c)(2)(ix) of this Item, where the date of the annual meeting has been changed by more than 30 days from the date of the previous year's meeting, the obligation under that Item will arise where the registrant receives the security holder recommendation a reasonable time before the registrant begins to print and mail its proxy materials.

3. For purposes of paragraph (c)(2)(ix) of this Item, the percentage of securities held by a recommending security holder, as well as the holding period of those securities, may be determined by the registrant if the security holder is the registered holder of the securities. If the security holder is not the registered owner of the securities, he or she can submit one of the following to the registrant to evidence the required ownership percentage and holding period:

a. A written statement from the “record” holder of the securities (usually a broker or bank) verifying that, at the time the security holder made the recommendation, he or she had held the required securities for at least one year; or

b. If the security holder has filed a Schedule 13D (§ 240.13d-101 of this chapter), Schedule 13G (§ 240.13d-102 of this chapter), Form 3 (§ 249.103 of this chapter), Form 4 (§ 249.104 of this chapter), and/or Form 5 (§ 249.105 of this chapter), or amendments to those documents or updated forms, reflecting ownership of the securities as of or before the date of the recommendation, a copy of the schedule and/or form, and any subsequent amendments reporting a change in ownership level, as well as a written statement that the security holder continuously held the securities for the one-year period as of the date of the recommendation.

4. For purposes of the registrant's obligation to provide the disclosure specified in paragraph (c)(2)(ix) of this Item, the security holder or group must have provided to the registrant, at the time of the recommendation, the written consent of all parties to be identified and, where the security holder or group members are not registered holders, proof that the security holder or group satisfied the required ownership percentage and holding period as of the date of the recommendation.


Instruction to Item 407(c)(2). For purposes of paragraph (c)(2) of this Item, the term nominating committee refers not only to nominating committees and committees performing similar functions, but also to groups of directors fulfilling the role of a nominating committee, including the entire board of directors.

(3) Describe any material changes to the procedures by which security holders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of paragraph (c)(2)(iv) of this Item, or paragraph (c)(3) of this Item.


Instructions to Item 407(c)(3).

1. The disclosure required in paragraph (c)(3) of this Item need only be provided in a registrant's quarterly or annual reports.

2. For purposes of paragraph (c)(3) of this Item, adoption of procedures by which security holders may recommend nominees to the registrant's board of directors, where the registrant's most recent disclosure in response to the requirements of paragraph (c)(2)(iv) of this Item, or paragraph (c)(3) of this Item, indicated that the registrant did not have in place such procedures, will constitute a material change.


(d) Audit committee.

(1) State whether or not the audit committee has a charter. If the audit committee has a charter, provide the disclosure required by Instruction 2 to this Item regarding the audit committee charter.

(2) If a listed issuer's board of directors determines, in accordance with the listing standards applicable to the issuer, to appoint a director to the audit committee who is not independent (apart from the requirements in § 240.10A-3 of this chapter), including as a result of exceptional or limited or similar circumstances, disclose the nature of the relationship that makes that individual not independent and the reasons for the board of directors' determination.

(3)

(i) The audit committee must state whether:

(A) The audit committee has reviewed and discussed the audited financial statements with management;

(B) The audit committee has discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), 1 as adopted by the Public Company Accounting Oversight Board in Rule 3200T;

Footnote(s):

1 Available at http://www.pcaobus.org/standards/interim_standards/auditing_standards/index_au.asp?series=300&section=300.

(C) The audit committee has received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and has discussed with the independent accountant the independent accountant's independence; and

(D) Based on the review and discussions referred to in paragraphs (d)(3)(i)(A) through (d)(3)(i)(C) of this Item, the audit committee recommended to the board of directors that the audited financial statements be included in the company's annual report on Form 10-K (17 CFR 249.310) (or, for closed-end investment companies registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), the annual report to shareholders required by section 30(e) of the Investment Company Act of 1940 (15 U.S.C. 80a-29(e)) and Rule 30d-1 (17 CFR 270.30d-1) thereunder) for the last fiscal year for filing with the Commission.

(ii) The name of each member of the company's audit committee (or, in the absence of an audit committee, the board committee performing equivalent functions or the entire board of directors) must appear below the disclosure required by paragraph (d)(3)(i) of this Item.

(4)

(i) If the registrant meets the following requirements, provide the disclosure in paragraph (d)(4)(ii) of this Item:

(A) The registrant is a listed issuer, as defined in § 240.10A-3 of this chapter;

(B) The registrant is filing an annual report on Form 10-K (§ 249.310 of this chapter) or a proxy statement or information statement pursuant to the Exchange Act (15 U.S.C. 78a et seq.) if action is to be taken with respect to the election of directors; and

(C) The registrant is neither:

(1) A subsidiary of another listed issuer that is relying on the exemption in § 240.10A-3(c)(2) of this chapter; nor

(2) Relying on any of the exemptions in § 240.10A-3(c)(4) through (c)(7) of this chapter.

(ii)

(A) State whether or not the registrant has a separately-designated standing audit committee established in accordance with section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)), or a committee performing similar functions. If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant's audit committee as specified in section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state.

(B) If applicable, provide the disclosure required by § 240.10A-3(d) of this chapter regarding an exemption from the listing standards for audit committees.

(5) Audit committee financial expert.

(i)

(A) Disclose that the registrant's board of directors has determined that the registrant either:

(1) Has at least one audit committee financial expert serving on its audit committee; or

(2) Does not have an audit committee financial expert serving on its audit committee.

(B) If the registrant provides the disclosure required by paragraph (d)(5)(i)(A)(1) of this Item, it must disclose the name of the audit committee financial expert and whether that person is independent, as independence for audit committee members is defined in the listing standards applicable to the listed issuer.

(C) If the registrant provides the disclosure required by paragraph (d)(5)(i)(A)(2) of this Item, it must explain why it does not have an audit committee financial expert.

Instruction to Item 407(d)(5)

(i). If the registrant's board of directors has determined that the registrant has more than one audit committee financial expert serving on its audit committee, the registrant may, but is not required to, disclose the names of those additional persons. A registrant choosing to identify such persons must indicate whether they are independent pursuant to paragraph (d)(5)(i)(B) of this Item.

(ii) For purposes of this Item, an audit committee financial expert means a person who has the following attributes:

(A) An understanding of generally accepted accounting principles and financial statements;

(B) The ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves;

(C) Experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant's financial statements, or experience actively supervising one or more persons engaged in such activities;

(D) An understanding of internal control over financial reporting; and

(E) An understanding of audit committee functions.

(iii) A person shall have acquired such attributes through:

(A) Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions;

(B) Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions;

(C) Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or

(D) Other relevant experience.

(iv) Safe harbor.

(A) A person who is determined to be an audit committee financial expert will not be deemed an expert for any purpose, including without limitation for purposes of section 11 of the Securities Act (15 U.S.C. 77k), as a result of being designated or identified as an audit committee financial expert pursuant to this Item 407.

(B) The designation or identification of a person as an audit committee financial expert pursuant to this Item 407 does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.

(C) The designation or identification of a person as an audit committee financial expert pursuant to this Item does not affect the duties, obligations or liability of any other member of the audit committee or board of directors.

Instructions to Item 407(d)(5).

1. The disclosure under paragraph (d)(5) of this Item is required only in a registrant's annual report. The registrant need not provide the disclosure required by paragraph (d)(5) of this Item in a proxy or information statement unless that registrant is electing to incorporate this information by reference from the proxy or information statement into its annual report pursuant to General Instruction G(3) to Form 10-K (17 CFR 249.310).

2. If a person qualifies as an audit committee financial expert by means of having held a position described in paragraph (d)(5)(iii)(D) of this Item, the registrant shall provide a brief listing of that person's relevant experience. Such disclosure may be made by reference to disclosures required under Item 401(e) (§ 229.401(e)).

3. In the case of a foreign private issuer with a two-tier board of directors, for purposes of paragraph (d)(5) of this Item, the term board of directors means the supervisory or non-management board. In the case of a foreign private issuer meeting the requirements of § 240.10A-3(c)(3) of this chapter, for purposes of paragraph (d)(5) of this Item, the term board of directors means the issuer's board of auditors (or similar body) or statutory auditors, as applicable. Also, in the case of a foreign private issuer, the term generally accepted accounting principles in paragraph (d)(5)(ii)(A) of this Item means the body of generally accepted accounting principles used by that issuer in its primary financial statements filed with the Commission.

4. A registrant that is an Asset-Backed Issuer (as defined in § 229.1101) is not required to disclose the information required by paragraph (d)(5) of this Item.

Instructions to Item 407(d).

1. The information required by paragraphs (d)(1)-(3) of this Item shall not be deemed to be “soliciting material,” or to be “filed” with the Commission or subject to Regulation 14A or 14C (17 CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101), other than as provided in this Item, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r), except to the extent that the registrant specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act. Such information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

2. The disclosure required by paragraphs (d)(1)-(3) of this Item need only be provided one time during any fiscal year.

3. The disclosure required by paragraph (d)(3) of this Item need not be provided in any filings other than a registrant's proxy or information statement relating to an annual meeting of security holders at which directors are to be elected (or special meeting or written consents in lieu of such meeting).

(e) Compensation committee.

(1) If the registrant does not have a standing compensation committee or committee performing similar functions, state the basis for the view of the board of directors that it is appropriate for the registrant not to have such a committee and identify each director who participates in the consideration of executive officer and director compensation.

(2) State whether or not the compensation committee has a charter. If the compensation committee has a charter, provide the disclosure required by Instruction 2 to this Item regarding the compensation committee charter.

(3) Provide a narrative description of the registrant's processes and procedures for the consideration and determination of executive and director compensation, including:

(i)

(A) The scope of authority of the compensation committee (or persons performing the equivalent functions); and

(B) The extent to which the compensation committee (or persons performing the equivalent functions) may delegate any authority described in paragraph (e)(3)(i)(A) of this Item to other persons, specifying what authority may be so delegated and to whom;

(ii) Any role of executive officers in determining or recommending the amount or form of executive and director compensation; and

(iii) Any role of compensation consultants in determining or recommending the amount or form of executive and director compensation (other than any role limited to consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the registrant, and that is available generally to all salaried employees; or providing information that either is not customized for a particular registrant or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) during the registrant's last completed fiscal year, identifying such consultants, stating whether such consultants were engaged directly by the compensation committee (or persons performing the equivalent functions) or any other person, describing the nature and scope of their assignment, and the material elements of the instructions or directions given to the consultants with respect to the performance of their duties under the engagement:

(A) If such compensation consultant was engaged by the compensation committee (or persons performing the equivalent functions) to provide advice or recommendations on the amount or form of executive and director compensation (other than any role limited to consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the registrant, and that is available generally to all salaried employees; or providing information that either is not customized for a particular registrant or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) and the compensation consultant or its affiliates also provided additional services to the registrant or its affiliates in an amount in excess of $120,000 during the registrant's last completed fiscal year, then disclose the aggregate fees for determining or recommending the amount or form of executive and director compensation and the aggregate fees for such additional services. Disclose whether the decision to engage the compensation consultant or its affiliates for these other services was made, or recommended, by management, and whether the compensation committee or the board approved such other services of the compensation consultant or its affiliates.

(B) If the compensation committee (or persons performing the equivalent functions) has not engaged a compensation consultant, but management has engaged a compensation consultant to provide advice or recommendations on the amount or form of executive and director compensation (other than any role limited to consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the registrant, and that is available generally to all salaried employees; or providing information that either is not customized for a particular registrant or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) and such compensation consultant or its affiliates has provided additional services to the registrant in an amount in excess of $120,000 during the registrant's last completed fiscal year, then disclose the aggregate fees for determining or recommending the amount or form of executive and director compensation and the aggregate fees for any additional services provided by the compensation consultant or its affiliates.

(iv) With regard to any compensation consultant identified in response to Item 407(e)(3)(iii) whose work has raised any conflict of interest, disclose the nature of the conflict and how the conflict is being addressed.

Instruction to Item 407(e)(3)(iv).For purposes of this paragraph (e)(3)(iv), the factors listed in § 240.10C-1(b)(4)(i) through (vi) of this chapter are among the factors that should be considered in determining whether a conflict of interest exists.

(4) Under the caption “Compensation Committee Interlocks and Insider Participation”:

(i) Identify each person who served as a member of the compensation committee of the registrant's board of directors (or board committee performing equivalent functions) during the last completed fiscal year, indicating each committee member who:

(A) Was, during the fiscal year, an officer or employee of the registrant;

(B) Was formerly an officer of the registrant; or

(C) Had any relationship requiring disclosure by the registrant under any paragraph of Item 404 (§ 229.404). In this event, the disclosure required by Item 404 (§ 229.404) shall accompany such identification.

(ii) If the registrant has no compensation committee (or other board committee performing equivalent functions), the registrant shall identify each officer and employee of the registrant, and any former officer of the registrant, who, during the last completed fiscal year, participated in deliberations of the registrant's board of directors concerning executive officer compensation.

(iii) Describe any of the following relationships that existed during the last completed fiscal year:

(A) An executive officer of the registrant served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of the registrant;

(B) An executive officer of the registrant served as a director of another entity, one of whose executive officers served on the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of the registrant; and

(C) An executive officer of the registrant served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the registrant.

(iv) Disclosure required under paragraph (e)(4)(iii) of this Item regarding a compensation committee member or other director of the registrant who also served as an executive officer of another entity shall be accompanied by the disclosure called for by Item 404 with respect to that person.

Instruction to Item 407(e)(4). For purposes of paragraph (e)(4) of this Item, the term entity shall not include an entity exempt from tax under section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)).

(5) Under the caption “Compensation Committee Report:”

(i) The compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) must state whether:

(A) The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) (§ 229.402(b)) with management; and

(B) Based on the review and discussions referred to in paragraph (e)(5)(i)(A) of this Item, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in the registrant's annual report on Form 10-K (§ 249.310 of this chapter), proxy statement on Schedule 14A (§ 240.14a-101 of this chapter) or information statement on Schedule 14C (§ 240.14c-101 of this chapter).

(ii) The name of each member of the registrant's compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) must appear below the disclosure required by paragraph (e)(5)(i) of this Item.

Instructions to Item 407(e)(5).

1. The information required by paragraph (e)(5) of this Item shall not be deemed to be “soliciting material,” or to be “filed” with the Commission or subject to Regulation 14A or 14C (17 CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101), other than as provided in this Item, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r), except to the extent that the registrant specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.

2. The disclosure required by paragraph (e)(5) of this Item need not be provided in any filings other than an annual report on Form 10-K (§ 249.310 of this chapter), a proxy statement on Schedule 14A (§ 240.14a-101 of this chapter) or an information statement on Schedule 14C (§ 240.14c-101 of this chapter). Such information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. If the registrant elects to incorporate this information by reference from the proxy or information statement into its annual report on Form 10-K pursuant to General Instruction G(3) to Form 10-K, the disclosure required by paragraph (e)(5) of this Item will be deemed furnished in the annual report on Form 10-K and will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act as a result as a result of furnishing the disclosure in this manner.

3. The disclosure required by paragraph (e)(5) of this Item need only be provided one time during any fiscal year.

(f) Shareholder communications.

(1) State whether or not the registrant's board of directors provides a process for security holders to send communications to the board of directors and, if the registrant does not have such a process for security holders to send communications to the board of directors, state the basis for the view of the board of directors that it is appropriate for the registrant not to have such a process.

(2) If the registrant has a process for security holders to send communications to the board of directors:

(i) Describe the manner in which security holders can send communications to the board and, if applicable, to specified individual directors; and

(ii) If all security holder communications are not sent directly to board members, describe the registrant's process for determining which communications will be relayed to board members.

Instructions to Item 407(f).

1. In lieu of providing the information required by paragraph (f)(2) of this Item in the proxy statement, the registrant may instead provide the registrant's Web site address where such information appears.

2. For purposes of the disclosure required by paragraph (f)(2)(ii) of this Item, a registrant's process for collecting and organizing security holder communications, as well as similar or related activities, need not be disclosed provided that the registrant's process is approved by a majority of the independent directors or, in the case of a registrant that is an investment company, a majority of the directors who are not “interested persons” of the investment company as defined in section 2(a)(19) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(19)).

3. For purposes of this paragraph, communications from an officer or director of the registrant will not be viewed as “security holder communications.” Communications from an employee or agent of the registrant will be viewed as “security holder communications” for purposes of this paragraph only if those communications are made solely in such employee's or agent's capacity as a security holder.

4. For purposes of this paragraph, security holder proposals submitted pursuant to § 240.14a-8 of this chapter, and communications made in connection with such proposals, will not be viewed as “security holder communications.”

(g) Smaller reporting companies. A registrant that qualifies as a “smaller reporting company,” as defined by § 229.10(f)(1), is not required to provide:

(1) The disclosure required in paragraph (d)(5) of this Item in its first annual report filed pursuant to section 13(a) or 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d)) following the effective date of its first registration statement filed under the Securities Act (15 U.S.C. 77a et seq.) or Exchange Act (15 U.S.C. 78a et seq.); and

(2) Need not provide the disclosures required by paragraphs (e)(4) and (e)(5) of this Item.

(h) Board leadership structure and role in risk oversight. Briefly describe the leadership structure of the registrant's board, such as whether the same person serves as both principal executive officer and chairman of the board, or whether two individuals serve in those positions, and, in the case of a registrant that is an investment company, whether the chairman of the board is an “interested person” of the registrant as defined in section 2(a)(19) of the Investment Company Act (15 U.S.C. 80a-2(a)(19)). If one person serves as both principal executive officer and chairman of the board, or if the chairman of the board of a registrant that is an investment company is an “interested person” of the registrant, disclose whether the registrant has a lead independent director and what specific role the lead independent director plays in the leadership of the board. This disclosure should indicate why the registrant has determined that its leadership structure is appropriate given the specific characteristics or circumstances of the registrant. In addition, disclose the extent of the board's role in the risk oversight of the registrant, such as how the board administers its oversight function, and the effect that this has on the board's leadership structure.

Instructions to Item 407.

1. For purposes of this Item:

a. Listed issuer means a listed issuer as defined in § 240.10A-3 of this chapter;

b. National securities exchange means a national securities exchange registered pursuant to section 6(a) of the Exchange Act (15 U.S.C. 78f(a));

c. Inter-dealer quotation system means an automated inter-dealer quotation system of a national securities association registered pursuant to section 15A(a) of the Exchange Act (15 U.S.C. 78o-3(a)); and

d. National securities association means a national securities association registered pursuant to section 15A(a) of the Exchange Act (15 U.S.C. 78o-3(a)) that has been approved by the Commission (as that definition may be modified or supplemented).

2. With respect to paragraphs (c)(2)(i), (d)(1) and (e)(2) of this Item, disclose whether a current copy of the applicable committee charter is available to security holders on the registrant's Web site, and if so, provide the registrant's Web site address. If a current copy of the charter is not available to security holders on the registrant's Web site, include a copy of the charter in an appendix to the registrant's proxy or information statement that is provided to security holders at least once every three fiscal years, or if the charter has been materially amended since the beginning of the registrant's last fiscal year. If a current copy of the charter is not available to security holders on the registrant's Web site, and is not included as an appendix to the registrant's proxy or information statement, identify in which of the prior fiscal years the charter was so included in satisfaction of this requirement.

Item 407: Corporate governance and management:


My Response to Item 407:


The Company is controlled by a Board of Directors. Loans are approved by a loan committee of (3) individuals who have been commercial loan brokers for a period of years. All members of the loan committee must approve a loan before the company may fund it

We have three directors of which two (2) are independent directors. (As defined by NASDAQ Rule 5605(a)(2))

Director Independence

Pursuant to Item 407(a)(1)(ii) of Regulation S-K of the Securities and Exchange Commission, the Board is required to affirmatively determine and disclose the independence of each director, and nominee for election as a director, based on the director independence standards of a national securities exchange or an inter-dealer quotation system having certain director independence requirements notwithstanding that the Company is not currently listed on any such exchange and the Company’s securities are not currently quoted in any such inter-dealer quotation system. The Board has determined to use the definition of “independent director” as set forth in the marketplace rules of The Nasdaq Stock Market, LLC. Based on such definition, the Board has affirmatively determined that each of the following persons is independent within the meaning of the marketplace rules of The Nasdaq Stock Market, LLC and has no relationship with the Company which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director:

In addition, the Board has determined that Gus Ladikos is not independent because he is an officers and employees of the Company.

The Board has affirmatively determined that each of the following persons is independent within the meaning of Section 303A of the New York Stock Exchange’s Listed Company Manual and has no material relationship with the Company, except as a director and stockholder:



Name

Relationship

Dr. Pauline

Independent

Gus

Not Independent

Charles

Independent


Business and Commercial Funding, Inc.

Corporate Governance Guidelines

The business and affairs of Business and Commercial Funding, Inc. (“BCF”) are to be managed by its Board of Directors (the “Board”).  BCF has adopted these Corporate Governance Guidelines to set forth the Board’s policies and procedures for ensuring the proper corporate governance of BCF The Board shall establish Board committees (“Committee(s)”) composed of directors to assist the full Board in regard to certain matters, including an Audit Committee, Compensation Committee, Enterprise Risk Management Committee, Executive Committee, Investment Committee, Nominating and Governance Committee and a Section 162(m) Committee.  Additional Committees may also be established by the Board.

The committees identified above shall be established at such time as BCF shall cease to qualify as a Smaller reporting companies., as defined by § 229.10(f)(1)

1. Director Qualifications

General. The Nominating and Governance Committee of the Board is responsible for reviewing with the Board the requisite skills, characteristics, and independence of all potential new directors as necessary, as well as the composition of the Board as a whole on an annual basis.  This review shall include an assessment of each director’s qualification as an independent director, as well as considerations of diversity (such as diversity of viewpoints, background and other demonstrated abilities) skills, and experience in the context of the needs of the Board.  Nominees for director are recommended to the Board by the Nominating and Governance Committee in accordance with the policies and principles in its Charter. 

Independence. BCF is relying on the “Controlled Company” exemption under Rule 5615(c) of The Nasdaq Stock Market, LLC. (“Nasdaq”).  Under Nasdaq Marketplace Rule 5615(c), a Controlled Company is exempt from certain Independent Director requirements set forth in the rule.  If BCF ceases to be a Controlled Company, the Independent Director requirements set forth in Nasdaq Marketplace Rule 5605(b) will be applicable to it.  “Independent Director” is defined in accordance with the NASDAQ Rules.

Terms. While the Board  does not have a policy of term limits or a mandatory retirement age for its directors, the Board reviews (through the Nominating and Governance Committee) each director’s contributions to, and continuation on, the Board every year when that director is to stand for reelection to the Board.  The Board believes that, over a period of time, directors develop increasing insight into BCD and its operations, and that their resultant contributions to the Board and BCF add great value that could be lost through too-frequent turnover of the Board.

Service on Other Boards. No director may sit on the board of directors of more than one public company board in addition to BCF without the approval of the Board.  In addition, no director serving on BCF’S Audit Committee of the Board may serve on the audit committee of more than one public company in addition to BCF without a determination by the Board that such simultaneous service would not impair the ability of the director to effectively serve as a member of BCF’s Audit Committee. 

2. Director Responsibilities

General. The most fundamental responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of BCF.  In discharging this obligation, the directors must act in good faith and with due care and loyalty to BCF and the shareholders of BCF.  In discharging his or her responsibilities, the directors may rely on the honesty and integrity of BCF’s executive officers and its outside advisors and auditors.

Board Meetings. It is the exclusive responsibility of the Chairman of the Board (“Chairman”) to call meetings of the Board and to set the agenda for such meetings. The Chairman may also call meetings of Committees.  Committee Chairs may call Committee meetings between meetings of the Board.  All directors shall be provided reasonable notice of all Board meetings and Committee meetings (whether or not serving on a particular Committee). [A director need not be provided notice of and may be excluded from Board and Committee meetings or portions thereof if the Chairman determines that a director has an interest in the subject matter of the meeting that may conflict with the interest of BCF or its shareholders.]   The Board is expected to meet four times per year, but the directors are required to spend the time needed, and meet as often as necessary, to properly discharge their responsibilities to BCF.  Each director is expected to attend in person, all meetings of the Board and Committees that the Chairman or Committee chair notices for an in-person meeting of the Board or Committee.  Board and Committee meetings may also be held by phone if so called.  Directors are expected to participate in Board and Committee meetings, review relevant meeting materials in advance, serve on Committees, and prepare for meetings and discussions with management.  Directors are expected to maintain an attitude of constructive involvement and oversight, to ask probing questions and to require accurate and honest answers.

Executive Sessions. Pursuant to Nasdaq Marketplace Rule 5605(b)(2), the independent directors shall meet in executive session  at which only the independent directors are present and any representatives of management  are excluded at least twice a year.  The Chairman shall preside at each executive session unless he or she is not independent.  If the Chairman of the Board is not independent, the director who presides at an executive session will be selected by the independent directors in attendance at such session, and his or her name will be disclosed in BCF’s annual proxy statement.

Conflicts of Interest. Directors are expected to avoid any action, position or interest that conflicts with the interests of BCF or gives the appearance of a conflict. If an actual or potential conflict of interest develops, the director should immediately report the matter to the Chairman. Any significant conflict must be resolved or the director should resign. If a director has a personal interest in a matter before the Board, the director will disclose the interest to the Board, excuse him or herself from discussion on the matter and not vote on the matter.

Code of Business Conduct and Ethics. The Board expects all directors, as well as officers and employees, to act ethically at all times and to adhere to the Code of Business Conduct and Ethics.

Directors’ and Officers’ Liability Insurance; Indemnification. The directors are entitled to have BCF purchase directors’ and officers’ liability insurance on their behalf, with benefits of: 1) indemnification to the fullest extent permitted by law and by BCF’s governing documents (as amended or restated from time to time), and 2) exculpation as provided by law

3. Board Committees

General. The Board must at all times have an Audit Committee of at least three (3) members. Except as otherwise permitted by the applicable rules of Nasdaq, each member of the Audit Committee shall be “independent,” as such term is defined in the applicable rules of Nasdaq, Section 10A(m) of the Securities Exchange Act of 1934, as amended, and the rules thereunder.  All directors, whether or not independent, are to be provided notice of and are expected to attend all meetings of the Audit Committee. The Board also has a Compensation Committee, a Section 162(m) Committee, a Nominating and Governance Committee, an Executive Committee, and an Investment Committee, and may have such other committees as it may determine from time to time.  If BCF ceases to be a Controlled Company, the independent director requirements set forth in Nasdaq Marketplace Rules 5605(d) and 5605(e) will be applicable to it with respect to the Compensation Committee and the Nominating and Governance Committee.

Advisors. Each committee shall have the power to retain independent legal, accounting, financial and other advisors and consultants as it may deem necessary, at the expense of BCF and without obtaining the approval of the full Board or any officer of BCF in advance.  Without limiting the generality of the foregoing, the Board must ensure that the Audit Committee has appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor employed by the Audit Committee, on behalf of BCF, for the purpose of performing audit services, including the rendering or issuing of an audit report, for any other advisors the Audit Committee employs in carrying out its duties and for ordinary administrative expenses of the Audit Committee.

4. Director Access to Management and Independent Advisors

Each director shall have reasonable access to officers and employees of GBLI as appropriate to fulfill legitimate director functions or responsibilities.  However, directors shall not unreasonably distract officers or employees or disrupt the operations of GBLI or the morale of BCF’s employees...  Directors shall also have access to BCF’s advisors as appropriate to fulfill legitimate director functions or responsibilities. . Because directors must have accurate and complete information to fulfill their duties, they should be provided with, and review, information from a variety of sources, including management, Committees, outside experts and auditors.  The Board should be provided with information before Board and Committee meetings with sufficient time to review and reflect on key issues and to request supplemental information as necessary.

5. Director Compensation

General. The form and amount of director compensation (including any additional compensation for committee service) is determined by the Board. 

Management Directors. Any director who is an officer of BCF shall not receive any compensation for his or her service as a director.

6. Management Selection and Performance Evaluation

Management Selection. The Board must select the Chief Executive Officer of BCF in a manner that it reasonably believes to be in the best interests of BCF at any given time. In selecting the Chief Executive Officer, the Board should consider any related report or recommendation of the Nominating and Governance Committee.

Management Performance. The Compensation Committee must conduct an annual review of the performance of the Chief Executive Officer, Chief Financial Officer, Chief Claims Officer, and Chief Actuary and make a report thereon to the full Board. The Board will review these reports to ensure that the Chief Executive Officer, Chief Financial Officer, Chief Claims Officer, and Chief Actuary are each providing the best leadership for BCF in the long and short-term and will meet with such officers to discuss any concerns that it has.

7. Annual Performance Evaluation of the Board of Directors

With the guidance of the Nominating and Governance Committee, the Board should perform annually an evaluation of its own performance. To assist the Board in any such evaluation, the Board should solicit comments from the individual directors, as well as from management. Any such evaluation conducted by the Board should assess whether it and its committees are functioning properly, focusing on the Board’s contributions to BCF and on areas in which the Board or management believes that the Board could improve.

* We have no compensation, nominating or audit committee

** Our securities are not currently listed on a national securities exchange or on an inter-dealer quotation system

DUTIES OF DIRECTORS MANAGEMENT OF BUSINESS:

The Board of Directors are responsible for the control and management of the affairs, property and interests of the Corporation; and may exercise all powers of the Corporation, except as are in the Articles of Incorporation or by statute expressly conferred upon or reserved to the shareholders.

The board of directors shall have general supervision and control of the business and affairs of the Corporation and shall make all rules and regulations not inconsistent with law or with our by-laws for the management of the business and the guidance of the officers, employees, and agents of the Corporation. They shall have installed an accounting system, which shall be adequate to the requirements of the business, and it shall be their duty to require proper records to be kept of all business transactions, for that purpose they may retain or authorize the president to retain an accountant to manage the internal bookkeeping affairs of the company.

No stated salary shall be paid to directors, as such, for their services but, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

Employment of Manager.

The board of directors has the power to employ or to authorize the employment of all officers and such other employees of the company as may be deemed necessary, and to fix their compensation. A director may serve as an officer or other employee of the company.

The board of directors shall have discretion to employ a manager who shall be employed under the direction of the board of directors; the manager shall have general charge of the ordinary and usual business operations of the Corporation, including the purchasing, marketing, and handling of all products services and supplies handled by the Corporation. They shall, so far as practicable, endeavor to conduct the business in such a manner that the shareholders will receive just and fair treatment. The manager shall deposit all money belonging to the Corporation in a bank selected by the board of directors and in the name of the Corporation. The manager shall make all disbursements there from for the ordinary and necessary expenses of the business by check in the manner and form authorized by the board. Upon the appointment of their successor, the manager shall deliver to them all money and property belonging to the Corporation which they have in their possession or over which they have control.

The manager shall be required to maintain his or her records and accounts in such a manner that the true and correct condition of the business may be ascertained there from at any time. They shall render annual and periodical statements in the form and in the manner prescribed by the board of directors. The manager shall carefully preserve all books, documents, correspondence, and records of whatever kind pertaining to the business which may come into his or her possession.

Subject to the approval of the board of directors, the manager shall have control over and may employ and dismiss all agents and employees of the Corporations not specifically employed by the board of directors. We have corporate officers who answer to the board.

Duties of the President:

The President shall (1) preside over all meetings of the Corporation and of the board of directors; (2) call special meetings of the Corporation and of the board of directors; (3) perform all acts and duties usually performed by a presiding officer, and (4) sign all certificates of stock issued to shareholders and such other papers of the Corporation as he or she may be authorized or directed to sign by the board of directors, provided the board of directors may authorize any person to sign any or all checks, contracts, and other instruments in writing on behalf of the Corporation. The President shall perform such duties as may be prescribed by the board of directors.

Duties of Vice-President

In the absence or disability of the President, or under the President’s direction, the Vice-President in designation of order (i.e.) first Vice President, second Vice President etc. shall perform the duties of the President, provided, however, that in case of death, resignation, or disability of the President, the board of directors may declare the office vacant and elect his successor.

Duties of the Secretary:

The secretary shall keep a complete record of all meetings of the Corporations and of the board of directors and shall have general charge and supervision of the books and records of the Corporation. He or she shall sign all stock certificates issued to shareholders with the President and such other papers pertaining to the Corporation as he or she may be authorized or directed to do by the board of directors. He or she shall serve all notices required by law and by these by-laws and shall make a full report of all matters and business that pertain to his or her office to the shareholders at the annual meeting. He or she shall keep the corporate seal if any, and the stock ledger (certificate) book; complete and countersign all certificates issues and affix said corporate seal if any, to all papers requiring seal. He or she shall keep a record showing the name of each shareholder of the Corporation, the number of stock certificates, the number of shares owned, and the date of issuance. He or she shall act as secretary of the executive committee. He or she shall make all reports required by law and shall perform such other duties as may be required of him or her by the Corporation or board of directors. Upon the election of his or her successor, the secretary shall turn over to him or her all books, records, and other property belonging to the Corporation.

Duties of the Treasurer:

The treasurer shall perform such duties with respect to the finances of the Corporation as may be prescribed by the board of directors.

Item 503: PROSPECTUS SUMMARY, RISK FACTORS, AND RATIO OF EARNINGS TO FIXED CHARGES:


Item 503a: PROSPECTUS SUMMARY


Prospectus summary. Provide a summary of the information in the prospectus where the length or complexity of the prospectus makes a summary useful. The summary should be brief. The summary should not contain, and is not required to contain, all of the detailed information in the prospectus. If you provide summary business or financial information, even if you do not caption it as a summary, you still must provide that information in plain English.


Instruction to paragraph 503

(a): The summary should not merely repeat the text of the prospectus but should provide a brief overview of the key aspects of the offering. Carefully consider and identify those aspects of the offering that are the most significant and determine how best to highlight those points in clear, plain language.

(b) Address and telephone number. Include, either on the cover page or in the summary section of the prospectus, the complete mailing address and telephone number of your principal executive offices.


MY RESPONSE IN THE S1


Business and Commercial Funding [BCF] is offering their class “A” common stock to investors who are looking for a high rate of return, and who also desire to share in the profits of our company. We anticipate sharing our profits through a structured dividend payment program. Our dividend program is based on a percent of our profits, currently structured at 20%.


Our main focus is multi faceted [i] to create a valuable company for our investors, by an increasing stock value against a real book value, [ii] to pay dividends on our profits so our investors will enjoy both annual returns and a stock appreciation, [iii] to create a market demand for resale of our securities and [4] to create a diverse portfolio of income producing company owned properties.


The best way to create a market demand is by performing, making the profits we anticipate, and by being open and transparent about our company by filing quarterly and annual disclosures.


Today the market is awash in REO opportunities. Yet few borrowers have been, by themselves, capable of taking advantage of these opportunities. This is one area where BCF will have an opportune space.


BCF’s share sales are anticipated to provide the company with the liquidity to become a viable lender in the commercial and business lending marketplace. We intend to fill an area currently lacking. Our model is primarily working with the developer/borrower or acquisition/borrower and actually taking financial control of the project. In this manner we believe we have a far greater ability to be successful.


We anticipate also a 10% equity stake in the project. Our profit areas are anticipated to be [1] four (4) points going in, [2] our interest rate that is anticipated to be 12% or more depending on the project, [3] our required equity position, and [4] our 1-point exit fee.


As an example, for a $2,000,000 loan, assuming the completed project will be valued at only $8,000,000; we anticipate earning $80,000 in points, $240,000 in interest, $800,000 in equity and $20,000 upon exit from the loan. Upon our loan exit the $2,000,000 would be returned plus we will have earned on this investment $1,140,000, this is based on a twelve [12] month loan. As the reader can observe from a careful review, our investing strategy should equal a 57% profit annually.


Our Model will provide more then a lender/borrower relationship. Before we invest in any venture we intend to make sure that the venture is viable, irrespective of the worthiness of the borrower. Determining the projects viability means, appraisals relating to the project in two stages e.g. the current “as is” stage, and the based on the “completed” stage valuation. We will also require Feasibility and when appropriate environmental studies.


As it is our intent to remain in control of the project from start to finish, our first concern and primary focus is the project.


Our first loan products will be between $500,000 and $2,500,000 as we grow we will consider increasing our loan maximums. For example, by year [5] we anticipate having over $33,000,000 in funds available for loans. We may decide at that time to increase our investments from $500,000 to $5,000,000


The Company’s offices are located in St. George, Utah

Business and Commercial Funding, Inc.

xxxx W. Sunset Blvd # 1-134

St. George, Utah 84770


Item 503(b) RISK FACTORS,


(c) Risk factors. Where appropriate, provide under the caption “Risk Factors” a discussion of the most significant factors that make the offering speculative or risky. This discussion must be concise and organized logically. Do not present risks that could apply to any issuer or any offering. Explain how the risk affects the issuer or the securities being offered. Set forth each risk factor under a subcaption that adequately describes the risk. The risk factor discussion must immediately follow the summary section. If you do not include a summary section, the risk factor section must immediately follow the cover page of the prospectus or the pricing information section that immediately follows the cover page. Pricing information means price and price-related information that you may omit from the prospectus in an effective registration statement based on § 230.430A(a) of this chapter. The risk factors may include, among other things, the following:

(1) Your lack of an operating history;

(2) Your lack of profitable operations in recent periods;

(3) Your financial position;

(4) Your business or proposed business; or

(5) The lack of a market for your common equity securities or securities convertible into or exercisable for common equity securities.


They should be stated as follows:


1. We lack of an operating history

This is a new company with no operating history that has determined a market need for our services, there is no guarantee that we will be able to meet this need


2. We lack profitable operations in recent periods


As a new company we have no operating history moreover we also lack profitability


3. We lack a market for our common equity securities


No Market has been developed for our securities, therefore you may not be able to resale your securities, in the short term or at all.


4. We have competition


We will have competition in lending with older more established companies


5. Potential for borrower misrepresentations


Borrowers do not always present a truthful financial picture.

6. Whether conditions


Whether conditions can impact a construction project, making the project go beyond the allocated time frame


7. Reliance on power for build out


We may have delays while we bring power onto the land and or drill wells for water and place septic systems due to the very harsh winters, this could impact the anticipated building costs and time table for completion.


Item 503(c) RATIO OF EARNINGS TO FIXED CHARGES        


The Company has no fixed charges or overhead. We intend to be and remain debt free. The funds generated from this raise will be utilized to make our first loans.


We have no fixed-charge obligations: We have no unfunded capital expenditures or lease payments.


We currently have no long-term facility rent obligation.


Although we are providing this information, As A registrant that qualifies as a smaller reporting company, as defined by § 229.10(f) we are not required to comply with paragraph (d) of this Item to provide the Ratio of earnings to fixed charges


Item 504: Use of proceeds:


State the principal purposes for which the net proceeds to the registrant from the securities to be offered are intended to be used and the approximate amount intended to be used for each such purpose. Where registrant has no current specific plan for the proceeds, or a significant portion thereof, the registrant shall so state and discuss the principal reasons for the offering.


Instructions to Item 504:


1. Where less than all the securities to be offered may be sold and more than one use is listed for the proceeds, indicate the order of priority of such purposes and discuss the registrant's plans if substantially less than the maximum proceeds are obtained. Such discussion need not be included if underwriting arrangements with respect to such securities are such that, if any securities are sold to the public, it reasonably can be expected that the actual proceeds will not be substantially less than the aggregate proceeds to the registrant shown pursuant to Item 501 of Regulation S-K (§ 229.501).


2. Details of proposed expenditures need not be given; for example, there need be furnished only a brief outline of any program of construction or addition of equipment. Consideration should be given as to the need to include a discussion of certain matters addressed in the discussion and analysis of registrant's financial condition and results of operations, such as liquidity and capital expenditures.


3. If any material amounts of other funds are necessary to accomplish the specified purposes for which the proceeds are to be obtained, state the amounts and sources of such other funds needed for each such specified purpose and the sources thereof.


4. If any material part of the proceeds is to be used to discharge indebtedness, set forth the interest rate and maturity of such indebtedness. If the indebtedness to be discharged was incurred within one year, describe the use of the proceeds of such indebtedness other than short-term borrowings used for working capital.


5. If any material amount of the proceeds is to be used to acquire assets, otherwise than in the ordinary course of business, describe briefly and state the cost of the assets and, where such assets are to be acquired from affiliates of the registrant or their associates, give the names of the persons from whom they are to be acquired and set forth the principle followed in determining the cost to the registrant.


6. Where the registrant indicates that the proceeds may, or will, be used to finance acquisitions of other businesses, the identity of such businesses, if known, or, if not known, the nature of the businesses to be sought, the status of any negotiations with respect to the acquisition, and a brief description of such business shall be included. Where, however, pro forma financial statements reflecting such acquisition are not required by Regulation S-X (17 CFR 210.01 through 210.12-29), including Rule 8-05 for smaller reporting companies, to be included in the registration statement, the possible terms of any transaction, the identification of the parties thereto or the nature of the business sought need not be disclosed, to the extent that the registrant reasonably determines that public disclosure of such information would jeopardize the acquisition. Where Regulation S-X, including Rule 8-04 for smaller reporting companies, as applicable, would require financial statements of the business to be acquired to be included, the description of the business to be acquired shall be more detailed.


7. The registrant may reserve the right to change the use of proceeds, provided that such reservation is due to certain contingencies that are discussed specifically and the alternatives to such use in that event are indicated.


Response to S1 Item 504


Use of Proceeds

The Raise

$10,000,000

To Broker/dealers

$ 700,000

Net to BCF

$ 9,300,000

Overhead/Rents

None

Salaries

None

Utilities

None

Promoter

$100,000

All other funds received from this offering will be used to finance projects

If all the money is not raised the company will be able to fund projects based on the amount then received and available


You should list all expenses and itemize them in a similar format

Item 506: Dilution


Where common equity securities are being registered and there is substantial disparity between the public offering price and the effective cash cost to officers, directors, promoters and affiliated persons of common equity acquired by them in transactions during the past five years, or which they have the right to acquire, and the registrant is not subject to the reporting requirements of section 13(a) or 15(d) of the Exchange Act immediately prior to filing of the registration statement, there shall be included a comparison of the public contribution under the proposed public offering and the effective cash contribution of such persons. In such cases, and in other instances where common equity securities are being registered by a registrant that has had losses in each of its last three fiscal years and there is a material dilution of the purchasers' equity interest, the following shall be disclosed:

(a) The net tangible book value per share before and after the distribution;

(b) The amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers of the shares being offered; and

(c) The amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.


Response to Item 506


Dilution Schedule Common Shares


Number of shares outstanding

Net tangible book value per share before distribution

Net tangible book value per share after distribution 16,100,000 additional shares

Amount of increase in net tangible book value per share attributable to the cash payments made by purchasers

Amount of dilution from the public offering price will be absorbed by purchasers.

38,500,000

$0.001

$0.178

$0.177

$0.177



Share Acquisition Price of Officers and Directors and 5% holders


Officers and Directors

Contribution

Value of services

Acquisition price per Class “A” Common stock

Number of shares

Acquisition price per Class “B” Preferred Stock

Number of Preferred shares


Gus Founder/President/ /Director

Founder/Invested services

$100,000

$0.05

2,000,000

NA

NA

Linda Treasurer/Founder

Founder/invested money and services

$250,000

$0.0138

17,000,000

NA

NA

Paula

Founder/Secretary

Founder/ invested Money and services


$ 50,000

$.025

2,000,000

NA

NA

Randy Founder 5% holder


Invested services

$175,000

$0.0125

14,000,000

NA

NA


NOTE: From this offering there will be approximately $100,000 to pay our promoter for his efforts to bring this project to the Public.

Item 507: selling security holders.


If any of the securities to be registered are to be offered for the account of security holders, name each such security holder, indicate the nature of any position, office, or other material relationship which the selling security holder has had within the past three years with the registrant or any of its predecessors or affiliates, and state the amount of securities of the class owned by such security holder prior to the offering, the amount to be offered for the security holder's account, the amount and (if one percent or more) the percentage of the class to be owned by such security holder after completion of the offering.


NOTE: all shares at this time will be “restricted securities and may not be resold except in accordance with SEC Rule 144


Response to item 507

There are NO selling Security Holders


Item 508; Plan of distribution


(a) Underwriters and underwriting obligation. If the securities are to be offered through underwriters, name the principal underwriters, and state the respective amounts underwritten. Identify each such underwriter having a material relationship with the registrant and state the nature of the relationship. State briefly the nature of the obligation of the underwriter(s) to take the securities.


Instruction to paragraph 508

(a): All that is required as to the nature of the underwriters' obligation is whether the underwriters are or will be committed to take and to pay for all of the securities if any are taken, or whether it is merely an agency or the type of best efforts arrangement under which the underwriters are required to take and to pay for only such securities as they may sell to the public. Conditions precedent to the underwriters' taking the securities, including market-outs, need not be described except in the case of an agency or best efforts arrangement.


(b) New underwriters. Where securities being registered are those of a registrant that has not previously been required to file reports pursuant to section 13(a) or 15(d) of the Exchange Act, or where a prospectus is required to include reference on its cover page to material risks pursuant to Item 501 of Regulation S-K (§ 229.501), and any one or more of the managing underwriter(s) (or where there are no managing underwriters, a majority of the principal underwriters) has been organized, reactivated, or first registered as a broker-dealer within the past three years, these facts concerning such underwriter(s) shall be disclosed in the prospectus together with, where applicable, the disclosures that the principal business function of such underwriter(s) will be to sell the securities to be registered, or that the promoters of the registrant have a material relationship with such underwriter(s). Sufficient details shall be given to allow full appreciation of such underwriter(s) experience and its relationship with the registrant, promoters and their controlling persons.


(c) Other distributions. Outline briefly the plan of distribution of any securities to be registered that are to be offered otherwise than through underwriters.


(1) If any securities are to be offered pursuant to a dividend or interest reinvestment plan the terms of which provide for the purchase of some securities on the market, state whether the registrant or the participant pays fees, commissions, and expenses incurred in connection with the plan. If the participant will pay such fees, commissions and expenses, state the anticipated cost to participants by transaction or other convenient reference.


(2) If the securities are to be offered through the selling efforts of brokers or dealers, describe the plan of distribution and the terms of any agreement, arrangement, or understanding entered into with broker(s) or dealer(s) prior to the effective date of the registration statement, including volume limitations on sales, parties to the agreement and the conditions under which the agreement may be terminated. If known, identify the broker(s) or dealer(s) which will participate in the offering and state the amount to be offered through each.


(3) If any of the securities being registered are to be offered otherwise than for cash, state briefly the general purposes of the distribution, the basis upon which the securities are to be offered, the amount of compensation and other expenses of distribution, and by whom they are to be borne. If the distribution is to be made pursuant to a plan of acquisition, reorganization, readjustment or succession, describe briefly the general effect of the plan and state when it became or is to become operative. As to any material amount of assets to be acquired under the plan, furnish information corresponding to that required by Instruction 5 of Item 504 of Regulation S-K (§ 229.504).


(d) Offerings on exchange. If the securities are to be offered on an exchange, indicate the exchange. If the registered securities are to be offered in connection with the writing of exchange-traded call options, describe briefly such transactions.


(e) Underwriter's compensation. Provide a table that sets out the nature of the compensation and the amount of discounts and commissions to be paid to the underwriter for each security and in total. The table must show the separate amounts to be paid by the company and the selling shareholders. In addition, include in the table all other items considered by the National Association of Securities Dealers to be underwriting compensation for purposes of that Association's Rules of Fair Practice.


Instructions to paragraph 508(e):


1. The term “commissions” is defined in paragraph (17) of Schedule A of the Securities Act. Show separately in the table the cash commissions paid by the registrant and selling security holders. Also show in the table commissions paid by other persons. Disclose any finder's fee or similar payments in the table.


2. Disclose the offering expenses specified in Item 511 of Regulation S-K (17 CFR 229.511).


3. If the underwriter has any arrangement with the issuer, such as an over-allotment option, under which the underwriter may purchase additional shares in connection with the offering, indicate that this arrangement exists and state the amount of additional shares that the underwriter may purchase under the arrangement. Where the underwriter has such an arrangement, present maximum-minimum information in a separate column to the table, based on the purchase of all or none of the shares subject to the arrangement. Describe the key terms of the arrangement in the narrative.


(f) Underwriter's representative on board of directors. Describe any arrangement whereby the underwriter has the right to designate or nominate a member or members of the board of directors of the registrant. The registrant shall disclose the identity of any director so designated or nominated and indicate whether or not a person so designated or nominated or allowed to be designated or nominated by the underwriter is or may be a director, officer, partner, employee or affiliate of the underwriter.


(g) Indemnification of underwriters. If the underwriting agreement provides for indemnification by the registrant of the underwriters or their controlling persons against any liability arising under the Securities Act, furnish a brief description of such indemnification provisions.


(h) Dealers' compensation. State briefly the discounts and commissions to be allowed or paid to dealers, including all cash, securities, contracts or other considerations to be received by any dealer in connection with the sale of the securities. If any dealers are to act in the capacity of sub-underwriters and are to be allowed or paid any additional discounts or commissions for acting in such capacity, a general statement to that effect will suffice without giving the additional amounts to be sold.


(i) Finders. Identify any finder and, if applicable, describe the nature of any material relationship between such finder and the registrant, its officers, directors, principal stockholders, finders or promoters or the principal underwriter(s), or if there is a managing underwriter(s), the managing underwriter(s), (including, in each case, affiliates or associates thereof).


(j) Discretionary accounts. If the registrant was not, immediately prior to the filing of the registration statement, subject to the requirements of section 13(a) or 15(d) of the Exchange Act, identify any principal underwriter that intends to sell to any accounts over which it exercises discretionary authority and include an estimate of the amount of securities so intended to be sold. The response to this paragraph shall be contained in a pre-effective amendment which shall be circulated if the information is not available when the registration statement is filed.


(k) Passive market making. If the underwriters or any selling group members intend to engage in passive market making transactions as permitted by Rule 103 of Regulation M (§ 242.103 of this chapter), indicate such intention and briefly describe passive market making.


(l) Stabilization and other transactions.

(1) Briefly describe any transaction that the underwriter intends to conduct during the offering that stabilizes, maintains, or otherwise affects the market price of the offered securities. Include information on stabilizing transactions, syndicate short covering transactions, penalty bids, or any other transaction that affects the offered security's price. Describe the nature of the transactions clearly and explain how the transactions affect the offered security's price. Identify the exchange or other market on which these transactions may occur. If true, disclose that the underwriter may discontinue these transactions at any time;

(2) If the stabilizing began before the effective date of the registration statement, disclose the amount of securities bought, the prices at which they were bought and the period within which they were bought. If you use § 230.430A of this chapter, the prospectus you file under § 230.424(b) of this chapter or include in a post-effective amendment must contain information on the stabilizing transactions that took place before the determination of the public offering price; and

(3) If you are making a warrants or rights offering of securities to existing security holders and any securities not purchased by existing security holders are to be reoffered to the public, disclose in a supplement to the prospectus or in the prospectus used in connection with the reoffering:

(i) The amount of securities bought in stabilization activities during the offering period and the price or range of prices at which the securities were bought;

(ii) The amount of the offered securities subscribed for during the offering period;

(iii) The amount of the offered securities subscribed for by the underwriter during the offering period;

(iv) The amount of the offered securities sold during the offering period by the underwriter and the price or price ranges at which the securities were sold; and

(v) The amount of the offered securities that will be reoffered to the public and the public offering price.

Response to Item 508









(a) Underwriters and underwriting obligation

None: We are self underwriting

(b) New underwriters

We have not previously been required to file reports pursuant to section 13(a) or 15(d) of the Exchange Act,

(c)Other distributions


Broker/Dealers will sell the securities and will receive their customary fees

(d) Offerings on exchange

The securities will not be offered with any


(d) exchange of services or other securities

No Exchanges are anticipated

(e) Underwriter's compensation

See table below

(f) Underwriter's representative on board of directors

None


(g) Indemnification of underwriters

No

(h) Dealers' compensation

See Table below

(i) Finders. Identify

None

(j) Discretionary accounts

None

(k) Passive market making

No

(l) Stabilization and other transactions

None


The broker may receive compensation for participating in the offering as a selling group member or underwriter. The compensation they receive from issuers when acting as both underwriter and selling group member is reflected in the “Range of Fees from Underwriting” column. When the broker acts as underwriter but securities are sold through other selling group members, the broker receives the underwriting fees less the selling group fees.



Securities


Range of Fees

from Participation

in Selling Group

Range of Fees

from Underwriting


Buyer pays customary fee


IPOs

3% to 4.2% of the investment amount

5% to 7% of the

investment amount

$7.95 a trade


Follow-Ons

1.8% to 2.4% of the investment amount

3% to 4% of the

investment amount

$7.95 a trade



This is an at-the-market offering or best efforts offering.

Best efforts offering. The underwriters are not required to sell any specific number or dollar amount of securities but will use their best efforts to sell the securities offered


Item 509; Interest of named experts and counsel.


The CPA that prepared the financials is ________ of B F ________. Mr. _____ has No interest in this company.

The Attorney that prepared the Opinion Letter is ________. of ________ & ______, PLLC Mr. ________ has no interest in this company


Underwriters


The Company intends to self underwrite this offering, they will also co-operate with Broker Dealers.


Legal Matters


There are No lawsuits or administrative hearings pending or anticipated against the company or any officer or director of the company.


(If there are, you must explain them)


Experts


The Attorney law firm


The CPA Firm


Where You Can Find Additional Information


Additional information may be found at the company website: www.B&Cfunding.com


Item 512. Undertakings


The undersigned registrant hereby undertakes:


(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement.


(iii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.


(iv) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.


FINANCIAL STATEMENTS

Index to Consolidated Financial Statements:




 

 

Financial Statements F1


 

 

Report of Independent Registered Public Accounting Firm

F-2

 

 

Balance Sheet

F-3

 

 

Statement of Operations

F-4

 

 

Statement of  Stockholder’s Equity

F-5

 

 

Statement of Cash Flows  

F-6

 

 

Notes to the Financial Statements

F-7



This is the Index, the financial statements will be placed under the appropriate exhibit, the F stands for Financials. Each one will take a full page





Leave the remainder of the page blank before beginning the next part

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.


NOTE: Furnish a reasonably itemized statement of all expenses in connection with the issuance and distribution of the securities to be registered, other than underwriting discounts and commissions. If any of the securities to be registered are to be offered for the account of security holders, indicate the portion of such expenses to be borne by such security holder.


Instruction to Item 13: Insofar as practicable, registration fees, Federal taxes, States taxes and fees, trustees' and transfer agents' fees, costs of printing and engraving, and legal, accounting, and engineering fees shall be itemized separately. Include as a separate item any premium paid by the registrant or any selling security holder on any policy obtained in connection with the offering and sale of the securities being registered which insures or indemnifies directors or officers against any liabilities they may incur in connection with the registration, offering, or sale of such securities. The information may be given as subject to future contingencies. If the amounts of any items are not known, estimates, identified as such, shall be given.


The following table sets forth all expenses to be paid by the registrant, other than estimated underwriting discounts and commissions, in connection with this offering. All amounts shown are estimates except for the registration fee.


SEC registration fee

$1,245.00

Printing and engraving

$3,500.00

Legal fees and expenses

$2,500.00

Accounting fees and expenses

$3,240.00

Blue sky fees and expenses

$1,000.00

Transfer agent and registrar fees

$5,000.00

Edgerizing Fee

$1,000.00

Founders Repayment

$100,000.00

Miscellaneous Finders consideration and selling fees

$ 4,000,000

Total



Item 14. Indemnification of Officers and Directors.

The registrant’s certificate of incorporation and bylaws provide that the registrant shall indemnify its directors and officers, and may indemnify its employees and agents, to the full extent permitted by Utah law, including in circumstances in which indemnification is otherwise discretionary under Utah law.

In addition, the registrant has entered into separate indemnification agreements with its directors, officers and certain employees which require the registrant, among other things, to indemnify them against certain liabilities which may arise by reason of their status as directors, officers or certain other employees. The registrant also maintains director and officer liability insurance.

These indemnification provisions and the indemnification agreements entered into between the registrant and its officers and directors may be sufficiently broad to permit indemnification of the registrant’s officers and directors for liabilities (including reimbursement of expenses incurred) arising under the Securities Act.

Insofar as indemnification by the registrant for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in this Item 14 or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Item 15. Recent Sales of Unregistered Securities.


Furnish the following information as to all securities of the registrant sold by the registrant within the past three years which were not registered under the Securities Act. Include sales of reacquired securities, as well as new issues, securities issued in exchange for property, services, or other securities, and new securities resulting from the modification of outstanding securities.

(a) Securities sold. Give the date of sale and the title and amount of securities sold.

(b) Underwriters and other purchasers. Give the names of the principal underwriters, if any. As to any such securities not publicly offered, name the persons or identify the class of persons to whom the securities were sold.

(c) Consideration. As to securities sold for cash, state the aggregate offering price and the aggregate underwriting discounts or commissions. As to any securities sold otherwise than for cash, state the nature of the transaction and the nature and aggregate amount of consideration received by the registrant.

(d) Exemption from registration claimed. Indicate the section of the Securities Act or the rule of the Commission under which exemption from registration was claimed and state briefly the facts relied upon to make the exemption available.

(e) Terms of conversion or exercise. If the information called for by this paragraph (e) is being presented on Form 8-K, Form 10-Q, Form 10-K, or Form 10-D under the Exchange Act (§ 249.308, § 249.308(a), § 240.310 or § 249.312) of this chapter, and where the securities sold by the registrant are convertible or exchangeable into equity securities, or are warrants or options representing equity securities, disclose the terms of conversion or exercise of the securities.

(f) Use of proceeds. As required by § 230.463 of this chapter, following the effective date of the first registration statement filed under the Securities Act by an issuer, the issuer or successor issuer shall report the use of proceeds on its first periodic report filed pursuant to sections 13(a) and 15(d) of the Exchange Act (15 U.S.C. 78m(a) and 78o(d)) after effectiveness of its Securities Act registration statement, and thereafter on each of its subsequent periodic reports filed pursuant to sections 13(a) and 15(d) of the Exchange Act through the later of disclosure of the application of all the offering proceeds, or disclosure of the termination of the offering. If a report of the use of proceeds is required with respect to the first effective registration statement of the predecessor issuer, the successor issuer shall provide such a report. The information provided pursuant to paragraphs (f)(2) through (f)(4) of this Item need only be provided with respect to the first periodic report filed pursuant to sections 13(a) and 15(d) of the Exchange Act after effectiveness of the registration statement filed under the Securities Act. Subsequent periodic reports filed pursuant to sections 13(a) and 15(d) of the Exchange Act need only provide the information required in paragraphs (f)(2) through (f)(4) of this Item if any of such required information has changed since the last periodic report filed. In disclosing the use of proceeds in the first periodic report filed pursuant to the Exchange Act, the issuer or successor issuer should include the following information:

(1) The effective date of the Securities Act registration statement for which the use of proceeds information is being disclosed and the Commission file number assigned to the registration statement;

(2) If the offering has commenced, the offering date, and if the offering has not commenced, an explanation why it has not;

(3) If the offering terminated before any securities were sold, an explanation for such termination; and

(4) If the offering did not terminate before any securities were sold, disclose:

(i) Whether the offering has terminated and, if so, whether it terminated before the sale of all securities registered;

(ii) The name(s) of the managing underwriter(s), if any;

(iii) The title of each class of securities registered and, where a class of convertible securities is being registered, the title of any class of securities into which such securities may be converted;

(iv) For each class of securities (other than a class of securities into which a class of convertible securities registered may be converted without additional payment to the issuer) the following information, provided for both the account of the issuer and the account(s) of any selling security holder(s): the amount registered, the aggregate price of the offering amount registered, the amount sold and the aggregate offering price of the amount sold to date;

(v) From the effective date of the Securities Act registration statement to the ending date of the reporting period, the amount of expenses incurred for the issuer's account in connection with the issuance and distribution of the securities registered for underwriting discounts and commissions, finders' fees, expenses paid to or for underwriters, other expenses and total expenses. Indicate if a reasonable estimate for the amount of expenses incurred is provided instead of the actual amount of expense. Indicate whether such payments were:

(A) Direct or indirect payments to directors, officers, general partners of the issuer or their associates; to persons owning ten (10) percent or more of any class of equity securities of the issuer; and to affiliates of the issuer; or

(B) Direct or indirect payments to others;

(vi) The net offering proceeds to the issuer after deducting the total expenses described in paragraph (f)(4)(v) of this Item;

(vii) From the effective date of the Securities Act registration statement to the ending date of the reporting period, the amount of net offering proceeds to the issuer used for construction of plant, building and facilities; purchase and installation of machinery and equipment; purchases of real estate; acquisition of other business(es); repayment of indebtedness; working capital; temporary investments (which should be specified); and any other purposes for which at least five (5) percent of the issuer's total offering proceeds or $100,000 (whichever is less) has been used (which should be specified). Indicate if a reasonable estimate for the amount of net offering proceeds applied is provided instead of the actual amount of net offering proceeds used. Indicate whether such payments were:

(A) Direct or indirect payments to directors, officers, general partners of the issuer or their associates; to persons owning ten (10) percent or more of any class of equity securities of the issuer; and to affiliates of the issuer; or

(B) Direct or indirect payments to others; and

(viii) If the use of proceeds in paragraph (f)(4)(vii) of this Item represents a material change in the use of proceeds described in the prospectus, the issuer should describe briefly the material change.


Instructions.

1. Information required by this Item 15 need not be set forth as to notes, drafts, bills of exchange, or bankers' acceptances which mature not later than one year from the date of issuance.

2. If the sales were made in a series of transactions, the information may be given by such totals and periods as will reasonably convey the information required.


My answer to Item 15:


Restricted Securities were recently provided to our founders




On ___________, _______ shares were issued to the founders and promoter of the company) for founder and promoter services rendered to us, valued at $20,000 cash as well as $300,000 in services pursuant to the terms and conditions set forth in a certain Subscription agreement (the “Subscription Agreement”). Such shares were issued pursuant to an exemption from registration at Section 4(2), and 77d2 of the Securities Act of 1933 and Regulation D promulgated thereunder. These shares of our common stock qualified for exemption under Section 4(2), and 77d2 of the Securities Act of 1933 since the issuance of the shares by us did not involve any public offering or advertising. The offering was not a “public offering” as defined in Sections 4(2),4(5) and Section 77d(2) of the Securities Act; due to the insubstantial number of persons involved in the acquisition, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, these shareholders had the necessary investment intent as required by Section 4(2) and 77d2 since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we believe we have met the requirements to qualify for exemption under Section 4(2), and 77d2 of the Securities Act of 1933 for this transaction. A form of the subscription Agreement is attached hereto as Exhibit 10.1. 


We also relied on the state specific Exemptions from state security registrations also found for each subscriber/founder/promoter as follows:


(i) California: California Corporations code Section 25102f

(ii) Idaho: TITLE 30 CORPORATIONS CHAPTER 14” UNIFORM SECURITIES ACT (2004) PART 2. EXEMPTIONS FROM REGISTRATION OF SECURITIES 30-14-202 (14)

(iii) Florida: Title XXXIII Regulation of Trade, Commerce, Investments, and Solicitations Section 517.061(11)(a):

(iv) Nevada: NRS 90-530 and NRS 90-520: 11, and

(v) Utah: Title 61, Chapter 1, Utah Uniform Securities Act section 61-1-14 Exemptions: (2) (q)


The cash portion was used to finance this public offering:


Item 17. Undertakings.


The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, if any, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Auction Process: How It Works.


Stocks are sold in a market in which buyers enter competitive bids and sellers enter competitive offers at the same time. The price a stock is traded represents the highest price that a buyer is willing to pay and the lowest price that a seller is willing to sell at. Matching bids and offers are then paired together and the orders are executed. 


The New York Stock Exchange (NYSE) is an example of an auction market. Auction markets differ from over the counter where trades are negotiated. For example, four buyers want to buy a share of XYZ and make the following bids: $10.00, 10.02, 10.03 and $10.06. Conversely, there are four sellers that desire to sell XYZ and they submitted offers to sell their shares at the following prices: $10.06, 10.09, 10.12 and $10.13. In this scenario, the individuals that made bids/offers for XYZ at $10.06 will have their orders executed. All remaining orders will not immediately be executed and the current price of XYZ will then be $10.06.


Item 601. EXHIBITS.

EXHIBITS

 Number

Description of Exhibit

3 (i)

Articles of Incorporation of the Registrant

3 (ii)

Bylaws of the Registrant

5

Opinion of Attorney (name) with consent to use

10.1. 

Subscription agreement for Founders share allocation

14

Code of Ethics of Registrant

23

Consent of (Name), CPA, PC







Then state a page and add the exhibit under the heading, for example


Exhibit 3(i)


Then add the articles of incorporation


Exhibit 3(ii)

Then add the by laws of your corporation…


Etc.




Then add signatures and power of attorney as this!


Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of _______, State of _________ on the ____day of _______, 2014.

 




Business and Commercial Funding, Inc..



By:

 

/s/ Gus


 

Name: Gus


 

Title: President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gus xxxx and Linda xxxx, and each of them, as his true and lawful attorneys-in-fact and agents, each with the full power of substitution, for him and in his name, place or stead, in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and to sign any registration statement for the same offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective amendments thereto, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

 






Signature

  

Title

 

Date




/s/ Gus


  

President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

 

, 2014




/s/ Linda

Linda

  

(Principal Financial and Accounting Officer)Treasurer

 

, 2014




/s/ Paula

Paula

  

Secretary

 

2014




/s/


  

Director

 

, 2014




/s/


  

Director

 

, 2014


And lastly:


EXHIBIT INDEX

 Number

Description of Exhibit

3 (i)

Articles of Incorporation of the Registrant

3 (ii)

Bylaws of the Registrant

5

Opinion of name, PLLC with consent to use

10.1. 

Subscription agreement for Founders share allocation

14

Code of Ethics of Registrant

23

Consent of Name, CPA, PC

To Recap: once you are completely finished with filling out the S1, you should engage the CPA to complete their part and the attorney to prepare his letter. You should retain a CPA who is knowledgeable with the SEC requirements and Sarbanes-Oxley. They will also recommend you to an attorney that will review your by laws, articles of Incorporation and corporate minutes. Samples of all these documents are provided in the CD provided.


You will also need to contact a market maker (broker) and a transfer agent. The Transfer agent will usually refer you to the market maker who will file the 211 for you.



You have just completed the S1 now to register your company at the same time; the form used would be the 8A. This is a simple form to use and is very quick!


Following is a sample form 8A



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-A

 

 

FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES

PURSUANT TO SECTION 12(b) OR (g) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

 

Business and Commercial Funding, Inc

(Exact Name of Registrant as Specified in its Charter)

 

 

 




Utah

 


(State of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)



xxxx W. Sunset Blvd. 1-134

St. George, Utah

 

84770

(Address of principal executive offices)

 

(Zip code)

Securities to be registered pursuant to Section 12(b) of the Act:

 




Title of each class

to be so registered

 

Name of exchange on which

each class is to be registered

Class A Common Stock, $0.0001 par value per share

 

The NASDAQ Stock Market, Inc.

Bulletin Board

 

 

If this form relates to the registration of a class of securities pursuant to Section 12(b) of the Exchange Act and is effective pursuant to General Instruction A.(c), please check the following box.  

If this form relates to the registration of a class of securities pursuant to Section 12(g) of the Exchange Act and is effective pursuant to General Instruction A.(d), check the following.  

Securities Act registration statement number to which the form relates:


Securities to be registered pursuant to Section 12(g) of the Act:

None

 

 

 

Item 1.

Description of Registrant’s Securities to be Registered.

Business and Commercial Funding, inc. (the “Registrant”) hereby incorporates by reference the description of its Class A common stock, par value $0.0001 per share, to be registered hereunder contained under the heading “Description of Capital Stock” in the Registrant’s Registration Statement on Form S-1 (File No.  ), as originally filed with the Securities and Exchange Commission (the “Commission”) on ______________, as subsequently amended (the “Registration Statement”), and in the prospectus included in the Registration Statement to be filed separately by the Registrant with the Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended, which prospectus shall be deemed to be incorporated by reference herein.

 

Item 2.

Exhibits.

Pursuant to the Instructions as to Exhibits with respect to Form 8-A, no exhibits are required to be filed as part of this registration statement because no other securities of the Registrant are registered on The NASDAQ Stock Market, Inc. and the securities registered hereby are not being registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended.

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Company has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 











 


 

Business and Commercial Funding, inc.





Date: _____

 


 

By:

 

/s/


 


 


 

Name:

 



 


 


 

Title:

 

President/Director


************************************


To be able to file through EDGAR you will have to complete a form called “Form ID’, this will give you your EDGAR access codes, the company that will file them through Edgar will file this form for you and obtain the access code. The form must be notarized.


Once completed and both forms are filed you will most likely receive your first of possibly four (4) comment letters you have 10 days to respond to the comments with an amendment, make sure when you retain the CPA that he will respond to the comments or at least help you respond adequately. If the SEC does not like your response they could issue a second comment regarding the remaining deficiency. Bear in mind, the SEC’s Job is to find issues that require clarification in the form of disclosures. Work with the agents and you will be trading shortly.



Index to the exhibits provided on the CD


Exhibit 1. List of the Standard industrial codes

Exhibit 2. Code of ethics

Exhibit 3. Minutes of first meeting

Exhibit 4. By Laws of corporation

Exhibit 5. Private Placement for SEC exemption found at 4(2)

Exhibit 6. Investor Questionnaire

Exhibit 7. Subscription Agreement

Exhibit 8. The Form S1 completed for filing

Exhibit 9. The Form 8A completed for filing

Exhibit 10. State specific exemptions










Conclusion: Knowledge is power

________________________________________________


The unavoidable truth:

Knowledge is power, knowledge is safety, and knowledge is happiness.

I have attempted to provide you the tools to determine your own destiny and to make your own future secure. I have intended to allay the fear of the unknown, which haunts most people. I believe America is still a land of opportunity, but I also believe with a diminishing return on investment. Our Jobs for the most part are now in countries like India, Pakistan, and China. We lack proper education in a system stymied by inadequate skills and social intemperance.

Last Year, more than half a million students from 65 countries took a two hour test as part of the 2012 Program for International Student Assessment, or PISA. Students in East Asian countries performed the strongest with students in the Chinese city of Shanghai doing the best. Singapore came in second in math, followed by Hong Kong.

Where did US Students rate?

The US Students ranked number 36th in the world of nations. We also rank 17 out of 19 nations on the poverty scale. In the US today it costs more to be poor then in any other nation. More then 15,000,000 children lack proper nutrition, and many only have something to eat while they attend school. To me this is a disgrace and in a nation that has the financial “ability” to support our enemies around the world, but not our own people. If we are to succeed as a nation and return to greatness, it will not come from Government it will come from us!

It is my hope that you will use the advantage of this knowledge to not only help yourself, but that as you are successful you will go beyond helping yourself and reciprocate by helping others; by employing at a decent wage, or by helping to finance a start up dream like you now have.

What we know from society, not all men are truly created equal, except under the law. Some of us will be successful businessmen or women; others will need guidance to go through the maze. The challenge for the reader is to determine the extent of your own ability. There is no shame recognizing your limits and in dealing with your own specific inadequacies, it’s called the Peter Principle. All of us have a dream it’s part of the human experience.

The Peter Principle is a management theory which suggests that organizations risk filling management roles with people who are incompetent if they promote those who are performing well at their current role, rather than those who have proven abilities at the intended role. It is named after Laurence J. Peter who co-authored the1969 humorous book The Peter Principle: Why Things Always Go Wrong with Raymond Hull. They suggest that people will tend to be promoted until they reach their "position of incompetence".

Don’t let this be your destiny, it is always better to have the knowledge and hire the people to carry the ball, then to fumble and lose the entire game.

The first step to success is to focus on your idea, ask family and friends if they agree with you that the idea is worthy of pursuing, but your decision is the final arbiter of the truth. Also keep in mind these same members of family are all potential investors in your dream.

The most exciting prospect I have offered here is the knowledge about how to become a public company and to raise money to develop your dream. Today it is no longer about creating jobs, but the real emphasis is on creating wealth, which means the only tool remaining, the Stock market….but for you, this may change once again and perhaps with enough people making it in this system we can return to the greatness that once was America…


We have already lost the battle to employ Americans, because more people are coming into the workforce daily then are leaving it, and we are not producing an adequate number of jobs to keep up with the workforce let along those who are being left behind.


I wish each and every reader every success. Your imagination is the key to unlock the door. And once you see what is on the other side, you will never want to return.


Jack Ferm