Section C #4. This is the statement of expenses for this offering. I have some real questions here.
Printing and engraving costs are $25,000? You didn't check the estimate box so this would appear to be what your actual expenses are supposed to be. That looks a bit rich to me. You realize that these fees are supposed to represent "expenses in connection" with your offering not your own organizational expenses?
Legal and accounting fees for just this offering are $65,000? Again just for this offering? Ever think of shopping around?
But the sales commissions of $120,000 really draws my attention in light of the fact that you have indicated that there are "None at this time" sales agents. Is this $120,000 earmarked for Mr. Harry Ledbetter for his efforts? Have you failed to declare his anticipated involvement? If so, why?
Another $25,000 for what you call Blue Sky expenses? Sales expenses, telephone and mailing expenses of $25,000? Really and truly? I really have to marvel here Bruce that you are going to all this effort to raise this money and the overhead just for the offering is already pegged at 24% of what you are trying to raise. And none of these were declared as estimates either.
4. a. Furnish a statement of all expenses in connection with the issuance and distribution
of the securities in this offering. Exclude amounts relating solely to organization expenses of the issuer.
The information may be given as subject to future contingencies. If the amount of an expenditure is not known,
furnish an estimate and check the box to the left of the estimate.
Transfer Agent's Fees . . . . . . . . . . . . . . . . . . . . . . . . . o $___8,000___
Printing and Engraving Costs. . . . . . . . . . . . . . . . . . . . . . o $__25,000___
Legal Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o $__30,000___
Accounting Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . o $__35,000___
Engineering Fees . . . . . . . . . .. . . . . . . . . . . . . . . . . . o $___________
Sales Commissions (Specify finder's fees separately) . . . . . . . . . o $_120,000___
Other Expenses (identify) __Blue Sky - Sales Expenses, telephone, mail____ . o $__25,000___
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o $_243,000___
b. Enter the difference between the aggregate offering price given in response to Part C - Question 1
and total expenses furnished in response to Part C-Question 4.a. This difference is the
"adjusted gross proceeds to the issuer.". . . . . . . . . . . . . . . . o $_757,000___ |
