FORM SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BRANSON FOUNDATION FINANCIAL CAPITAL COMPANY
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INCORPORATED IN STATE OF MISSOURI, Primary Industry Class Code# TIN: 43-1628350
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Address and Telephone number of principal executive offices and principal place
of business:
574 STATE HIGHWAY 248, BRANSON MO 65616 (417) 334-6271
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Agent for service:
TAMARA HASLAR, 574 STATE HIGHWAY 248, BRANSON MO 65616 (417)334-3455
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Approximate date of proposed sale to the public January 1, 1998.
----------------
If any of the securities being registered on this Form are to offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following X.
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CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered. Pass through Mortgage Notes
Dollar Amount to be registered. $10,000,000
Proposed maximum offering price per unit. $1,000
Proposed maximum aggregate offering price. $10,000,000
Amount of registration fee. $3030.31
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 shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, or until the registration statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
The company choose to use disclosure Alternative 1.
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BRANSON FOUNDATION FINANCIAL CAPITAL COMPANY
--------------------------------------------
Type of Securities offered: Debt Pass through Mortgages
Maximum number of securities offered: $10,000,000.00
Minimum number of securities offered: $ 1,000,000.00
Price per security: $ 1,000.00
Total proceeds: If maximum sold: $10,000,000.00
If minimum sold: $ 1,000,000.00
Is a commissioned selling agent selling the securities in the offering?
Yes X No
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Is there other compensation to selling agent(s)? Yes X No
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Is there a finder's fee or similar payment to any person? Yes X No
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Is there an escrow of proceeds until minimum is obtained? Yes X No
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Is this offering limited to members of a special group, such as employees of the
Company or individuals?
Yes X No
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Is transfer of the securities restricted? Yes X No
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INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS
SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT. SEE QUESTION NO. 2 FOR THE RISK FACTORS THAT MANAGEMENT
BELIEVES PRESENT THE MOST SUBSTANTIAL RISKS TO AN INVESTOR IN THIS OFFERING.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL
OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE
AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY
SECURITIES OFFER OR THE TERMS OF THE OFFERING. NOR DOES IT PASS UPON THE
ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR SELLING LITERATURE. THESE
SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION: HOWEVER, THE
COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE
EXEMPT FROM REGISTRATION.
This Company is currently conducting operations and did show a profit in the
last fiscal year.
This offering has not been registered for offer and sale in any state.
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TABLE OF CONTENTS
Page
The Company................................................................... 3
Risk Factors.................................................................. 4
Business and Properties....................................................... 4
Offering Price Factors........................................................ 5
Use of Proceeds............................................................... 5
Capitalization................................................................ 6
Description of Securities..................................................... 7
Plan of Distribution.......................................................... 8
Dividends, Distribution and Redemption's...................................... 8
Officers and Key Personnel of the Company..................................... 9
Directors of the Company..................................................... 11
Principal Stockholders....................................................... 12
Management Relationships, Transactions and Remuneration...................... 13
Litigation................................................................... 14
Federal Tax Aspects.......................................................... 14
Miscellaneous Factors........................................................ 14
Financial Statements......................................................... 15
Management's Discussion and Analysis of Certain Relevant Factors............. 17
THIS OFFERING CIRCULAR CONTAINS ALL OF THE REPRESENTATION BY THE COMPANY
CONCERNING THIS OFFERING, AND NO PERSON SHALL MAKE DIFFERENT OR BROADER
STATEMENTS THAN THOSE CONTAINED HEREIN. INVESTORS ARE CAUTIONED NOT TO RELY UPON
ANY INFORMATION NOT EXPRESSLY SET FORTH IN THIS OFFERING CIRCULAR.
This Offering Circular, together with Financial Statements and other
Attachments, consists of a total of 18 pages.
THE COMPANY
1. Exact corporate name: Branson Foundation Financial Capital
Company.
The state of incorporation: Missouri
Date of incorporation: April 5, 1993
Street address of principal office: 574 State Highway 248, Branson MO
65616
Company Telephone Number: (417) 334-6271
Fiscal year: January 1
Person(s) to contact at company with respect to offering:
John C Tindel (417) 967-3555 or Becky L. Penrod (417) 334-6271.
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RISK FACTORS
2. The factors which the company considers to be the most substantial risks to
an investor in this offering in view of all facts and circumstances are as
follows:
A. The company will be investing its money in loans secured by first deeds
of trust on real property. When making such loans there exists the possibility
that borrowers may default on their obligation to pay the interest or principal
of the loans when due, which interest and principal payments are the source of
income to the company for purposes of paying the securities of the company to be
issued.
B. In the event of default on any of the loans made by the company, the
underlying security may not be readily salable, and if sold, may not realize
enough money to satisfy the secured debt.
C. Borrowers from the company could become insolvent and file a petition
in bankruptcy which could delay the company in foreclosing on the security for
the loan.
Note: In addition to the above risks, businesses are often subject to risks
not foreseen or fully appreciated by management. In reviewing this offering
Circular potential investors should keep in mind other possible risks that could
be important.
BUSINESS AND PROPERTIES
3. With respect to the business of the Company and its properties:
(a)The business of the company is the making of loans secured by first
deeds of trust on real estate. There is no product or goods produced by the
company. The only service of the company is the making of such loans and
servicing them.
(b). The company intends to offer to make loans to individuals or
corporations known to the officers of the company to be in the market for such
loans. The company does not expect to advertise the availability of such loans,
but rather intends to seek out, through its officers, creditworthy projects and
borrowers. As such loans are identified a sufficient amount of the securities of
the company will be sold to fund the loan, so that the company will not be
holding any significant amount of cash from such securities for more than a few
days.
(c). The company will be offering loans in competition with other lending
institutions such as banks, mortgage companies, savings and loan associations
and private lenders. The company intends to offer its loans at competitive
interest rates and to keep loan closing costs as low as possible. Such low
closing costs to borrowers will be a competitive advantage over most other
lenders. Loans will also be offered on the basis of interest only payments with
the entire balance coming due at a fixed time, a type of loan not readily
available from other lenders. The company intends to offer loans in the Southern
Missouri and Northern Arkansas geographic area where the company's office and
officers are located.
Note: Because this Offering Circular focuses primarily on details
concerning the Company rather than the industry in which the Company operates or
will operate, potential investors may wish to conduct their own separate
investigation of the Company's industry to obtain broader insight in assessing
the Company's prospects.
(d). The marketing strategies of the company are to utilize the contacts
and information of the company's officers to identify and evaluate prospective
borrowers. Due to the considerable economic development taking place in the
Southwest Missouri and Northern Arkansas area there is a continuing demand for
real estate financing. The company does not need to nor expect to satisfy a
significant part of the demand for real estate financing to be successful, since
the company's securities will be sold only as satisfactory loans are identified.
The company is presently servicing real estate loans and is profitable with a
relatively small volume of such loans. The company has no customers which
account for a major portion of the company's activities. There are no existing
sales contracts.
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(e). There is no backlog of written firm orders at present nor was there
a backlog at any prior time. The company does not expect any significant
seasonal or cyclical pattern in its activities.
(f). The company has no employees at present, nor does it anticipate
having any employees within the next twelve months. All necessary services to
the company will be supplied by officers and shareholders of the company either
at no charge or on a fee-for-services basis.
(g). The company neither owns nor leases any property. The office space
for the company's operations is furnished free of charge by the principal
shareholder of the company. The company does not intend to acquire any
properties in the immediate future.
(h). The company's operations do not depend upon patents, copyrights,
trade secrets, know-how or other proprietary information, except for general
information as to the making and securing of loans on real estate which is
common to all real estate lending institutions. The company has no
confidentiality agreements, covenants not to compete or license agreements. The
company has no research or development expenditures.
(i). The company's business is not subject to material regulation except
that the company will, if required, be licensed by the State of Missouri as a
Residential Mortgage Broker.
(j). The company has no subsidiaries.
(k). There have been no material events in the development of the company
during the past five years. There are no pending or anticipated mergers,
acquisitions, spin-offs or recapitalizations.
4. (a) The company has been profitable since 1994 and during its last fiscal
year, and there are no milestones or events which need to occur for the company
to become profitable.
OFFERING PRICE FACTORS
5. The securities offered by the company are not common stock, no factors are
relevant to the price at which the securities are being offered.
USE OF PROCEEDS
6. (a) The following table sets forth the use of the proceeds from this
offering:
If Minimum Sold If Maximum Sold
Amount Amount
% %
Total Proceeds $1,000,000 $10,000,000
---------- -----------
100% 100%
Commissions & Finders Fees Not applicable Not applicable
Use of Net Proceeds
First Mortgage $1,000,000 $10,000,000
-------------- ---------- -----------
Total Use of Net Proceeds $1,000,000 $10,000,000
---------- -----------
$1,000,000 $10,000,000
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100% 100%
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Note: After reviewing the portion of the offering allocated to the payment
of offering expenses, and to the immediate payment to management and promoters
of any fees, reimbursements, past salaries or similar payments, a potential
investor should consider whether the remaining portion of his investment, which
would be that part available for future development of the Company's business
and operations, would be adequate.
7. (a) No material amount of funds from sources other than this offering are to
be used in conjunction with the proceeds from this offering.
(b). No material part of the proceeds is to be used to discharge
indebtedness.
(c). No material amount of proceeds is to be used to acquire assets, other
than in the ordinary course of the business of the company of making real estate
loans. Such loans will be assets of the company. Loans may be made to officers,
directors or principal stockholders of the company on the same terms and
conditions as loans would be made to other persons.
(d). No part of the proceeds is to be used to reimburse any officer,
director, employee or stockholder for services already rendered, assets
previously transferred, or Moines loaned or advanced, or otherwise.
8. The company is not having and does not anticipate having within the next 12
months any cash flow or liquidity problems. It is not in default or in breach of
any note, loan or other indebtedness or financing arrangement requiring the
Company to make payments. None of the company's trade payables are unpaid. The
company is not subject to any unsatisfied judgments, liens or settlement
obligations.
9. Proceeds from this offering will satisfy the company's cash requirements for
the next 12 months. It will not be necessary to raise additional funds, but in
the event that the company wishes to expand its lending activity beyond the
amount raised under this offering an additional offering may be made under a new
registration.
Use of net proceeds: All of the net proceeds of this offering will be used to
fund real estate loans secured by first deeds of trust. Any out-of-pocket
expenses involved in funding such loans will be paid by the borrower.
CAPITALIZATION
10. Indicate the capitalization of the Company as of the most recent balance
sheet date (adjusted to reflect any subsequent stock splits, stock dividends,
recapitalizations or refinancing) and as adjusted to reflect that sale of the
minimum and maximum amount of securities in this offering and the use of the net
proceeds therefrom:
<TABLE>
<CAPTION>
As of: Amount Outstanding As Adjusted
<S> <C> <C> <C>
Debt 09/30/97 Minimum Maximum
-------- ------- -------
Short-term debt (average interest rate 8 %) $ 360,000 $1,000,000 $10,000,000
--------- ---------- -----------
Total debt $ 360,000 $ $
--------- ---------- -----------
Stockholders equity (deficit):
Common stock - par or stated value $ 10,000 $ 10,000 $ 10,000
--------- ---------- -----------
Additional Paid in capital $ 1,979 $ 1,979 $ 1,979
--------- ---------- -----------
Retained earnings (deficit) $-( 7,283) $ 12,717 $ 192,717
--------- ---------- -----------
Total stockholders equity (deficit) $ 4,696 $ 24,696 $ 204,696
--------- ---------- -----------
Total Capitalization $ 364,696 $1,024,696 $10,204,696
--------- ---------- -----------
</TABLE>
There are 30,000 shares of common stock authorized with a par or stated value of
$1.00 per share.
There are no shares of common stock in reserved to meet conversion requirements
or for the issuance upon exercise of options, warrants or rights.
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DESCRIPTION OF SECURITIES
11. The securities being offered hereby are Notes or Debentures.
12. These securities have no cumulative voting rights, or other special voting
rights; no preemptive rights to purchase in new issues of shares; no preference
as to dividends or interest; no preference upon liquidation or other special
rights or preferences.
13. These securities are not convertible.
14. (a) If securities are notes or other types of debt securities:
(1) What is the interest rate? Variable rate determined as of date of sale
and fixed thereafter, established at market competitive level on date of issue.
Interest in paid monthly.
(2) What is maturity date? Serial maturities of 6 months, 1 year, 3 years
or 5 years from date of issue.
(3) Is there a mandatory sinking fund? [ ] Yes [X] No
(4) Is there a trust indenture? [X] Yes [ ] No
Trustee: Hiett Title Company, 211 N. Talcott, Mountain Grove, MO 65711
(417)926-6163
(5) Are the securities callable or subject to redemption? [X] Yes [ ] No
Payable at par on any monthly payment date.
(6) Are the securities collateralized by real or personal property?
[X] Yes [ ] No
Secured by a pledge of a corresponding promissory note and first deed of
trust on real estate.
(7) These securities are not subordinated in right of payment of interest
or principal.
There is currently no outstanding indebtedness of the Company that is
senior to the securities in right of payment of interest or principal.
There is no other indebtedness that shares in right of payment on an
equivalent (pari passu) basis.
There is no indebtedness that is junior (subordinated) to the securities.
(b) If notes or other types of debt securities are being offered and the
Company has earnings during its last fiscal year show the ratio of earnings to
fixed charges on an actual and pro forma basis for that fiscal year. "Earnings"
means pretax income from continuing operations plus fixed charges and
capitalized interest. "Fixed charges" means interest (including capitalized
interest), amortization of debt discount, premium and expense, preferred stock
dividend requirements of majority owned subsidiary, and such portion of rental
expense as can be demonstrated to be representative of the interest factor in
the particular case. The pro forma of earnings to fixed charges should include
incremental interest expense as a result of the offering of the notes or other
debt securities.
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Last Fiscal Year
Actual Pro Forma
Minimum Maximum
"Earnings" =
----------
"Fixed Charges" 1.0625 1.059 1.059
Note: Care should be exercised in interpreting the significance of the
ratio of earnings to fixed charges as a measure of the "coverage" of debt
service, as the existence of earnings does not necessarily mean that the
Company's liquidity at any given time will permit payment of debt service
requirements to be timely made. See Question Nos. 11 and 12. See also the
Financial Statements and especially the Statement of Cash Flows.
15. Securities are not Preference or Preferred stock:
16. Securities are not capital stock of any type.
17. Current amount of assets available for payment of dividends if deficit must
be first made up, show deficit in parentheses). This is not applicable for this
offering.
PLAN OF DISTRIBUTION
18. There are no selling agents or finders for this offering :
19. There is no compensation to selling agents or finders, but selling agents
are shareholders of the company and will participate in the profits of the
company. The company will not indemnify the selling agents or finders against
liabilities under the securities laws.
20. There is no material relationships between selling agents or finders and the
Company or its management, because we have no selling agents or finders.
Note: After reviewing the amount of compensation to the selling agents or
finders for selling the securities, and the nature of any relationship between
the selling agents or finders and the Company, a potential investor should
assess the extent to which it may be inappropriate to rely upon any
recommendation by the selling agents or finders to buy the securities.
21. If this offering is not being made through selling agents, the names of
persons at the Company through which this offering is being made:
Donald R. Penrod PO Box 624 Branson MO 65615 417-334-6271
Becky L. Penrod PO Box 624 Branson MO 65615 417-334-6271
Tamara L. Haslar Rt 1 Box 285 Galena MO 65656 417-334-6271
Perry A Edenburn 457 Quail Road Branson MO 65616 417-334-6271
DIVIDENDS, DISTRIBUTIONS AND REDEMPTION'S
22. The Company has not within the last five years paid dividends, made
distributions upon its stock or redeemed any securities:
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OFFICERS AND KEY PERSONNEL OF THE COMPANY
23. Chief Executive Officer is Becky L Penrod , President/Chairman, age 34.
Street Address: 574 State Hwy 248, Branson, MO 65616 Telephone No.:
( 417 ) 334-6271.
Name of employers, titles and dates of positions held during past five
years with an indication of job responsibilities.
Penrod Agency, Broker, 1988 to Present
Foundation Financial, President, 1993 to Present
Education: Gainesville High School, Graduated 1981. On-the-job training
with Edward D. Jones & Co. as Branch Office Administrator (1981-1985),
Operations Manager with Penrod and Company Financial Services, Inc.(1985-1993).
Professional Courses / Seminars, Insurance (subject to competency testing and
currency requirements).
Becky L. Penrod is also a Director of the Company and approximately 30
hours per week will be spent on Company matters.
24. Chief Operating Officer is Tamara L. Haslar; age 30.
Street Address: 574 State Hwy 248, Branson, MO 65616 Telephone No.:
( 417 ) 334-6271
Name of employers, titles and dates of positions held during past five
years with an indication of job responsibilities.
Penrod Financial Services, Vice President, CFO, 1989 to Present
Penrod Agency, Inc, Vice President, CFO, 1988 to Present
Penrod & Company, Registered Investment Advisor, Administrator
1986 to Present
Foundation Financial , Inc, Administrator/Accountant, 1993 to
Present.
Education: Galena High School; Graduated 1985.
Draughons Business College; Graduated 1986.
Professional Course Seminars in Securities, Taxes, Accounting,
Insurance
(subject to competency testing and currency requirements).
Tamara L. Haslar is also a Director of the Company and approximately 10
hours per week will be spent on Company matters.
25. Chief Financial Officer is Tamara L. Haslar; age 30.
Street Address: 574 State Hwy 248, Branson, MO 65616 Telephone No.:
( 417 ) 334-6271
Name of employers, titles and dates of positions held during past five
years with an indication of job responsibilities.
Penrod Financial Services, Vice President, CFO, 1989 to Present
Penrod Agency, Inc, Vice President, CFO, 1988 to Present
Penrod & Company, Registered Investment Advisor,
Administrator 1986 to Present
Foundation Financial , Inc, Administrator/Accountant, 1993 to
Present.
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Education: Galena High School; Graduated 1985.
Draughons Business College; Graduated 1986.
Professional Course Seminars in Securities, Taxes, Accounting,
Insurance
(subject to competency testing and currency requirements).
Tamara L. Haslar is also a Director of the Company and approximately 10
hours per week will be spent on Company matters.
26. Other Key Personnel:
(A) Name: Donald R. Penrod, Stockholder; age 50.
Street Address: 574 State Hwy 248, Branson, MO 65616 Telephone No.:
( 417 ) 334-6271
Name of employers, titles and dates of positions held during past five
years with an indication of job responsibilities.
Penrod Financial Services, Inc, President, CEO, Series
7,24,63,53; 1989 to Present.
Penrod Agency, Inc , President, CEO; 1988 to Present
Penrod & Company Registered Investment Advisor; 1987 to
Present.
Education : Waterford Township High School Graduated 1965
University of Arizona, Attended 1970,
Eastern Michigan University, Graduated 1975, Bachelor of
Science: Political Science.
Minors: Military Science & Journalism.
Donald R. Penrod is also a Director of the Company and approximately 10
hours per week will be spent on Company matters.
(B) Name: Perry A. Edenburn, Stockholder; age 48.
Street Address: 574 State Hwy 248, Branson, MO 65616; Telephone No.:
( 417 ) 334-6271
Name of employers, titles and dates of positions held during past five
years with an indication of job responsibilities.
Penrod Financial Services Inc, Registered Representative, 1991 to
Present
Penrod Agency, Inc, Agent, 1991 to Present.
Education: Brown Institute of Minneapolis, Graduated 1969. Professional
Courses & Testing Series 7, 63,
Life & Health Insurance licensing.
Perry A. Edenburn is also a Director of the Company and approximately 10
hours per week will be spent on Company matters.
INSTRUCTION: The Term "Chief Executive Officer" means the officer of the Company
who has been delegated final authority by the board of directors to direct all
aspects of the Company's affairs. The term "Chief Operating Officer" means the
officer in charge of the actual day-to-day operations of the Company's business.
The term "Chief Financial Officer" means the officer having accounting skills
who is primarily in charge of assuring that the Company's financial books and
records are properly kept and maintained and financial statements prepared.
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The term "key personnel" means persons such as vice presidents, production
managers, sales managers, or research scientists and similar persons, who are
not included above, but who make or are expected to make significant
contributions to the business of the Company, whether as employees, independent
contractors, consultants or otherwise.
DIRECTORS OF THE COMPANY
27. There are four (4) Directors for the company.
28. There are no outside or other Directors; all are Stockholders of the
company.
29. (a) None of the Officers or Directors have ever worked for or managed a
company (including a separate subsidiary or division of a larger enterprise) in
the same business as the Company, other than the company.
(b) None of the Officers or Directors have ever worked for or managed a
company other than the Company in the same business or industry as the Company
or in a related business or industry. See Paragraph #23 thru 26 fir business
experience of the officers and directors.
(c) If the Company has never conducted operations or is otherwise in the
development stage, indicate whether any of the Officers or Directors has ever
managed any other company in the start-up or development stage and describe the
circumstances, including relevant dates. Not applicable
(d) If any of the Company's key personnel are not employees but are
consultants or other independent contractors, state the details of their
engagement by the company. Non applicable
(e) The Company has no key man like insurance policies on any of its
Officers, Directors or key personnel.
30. If a petition under the Bankruptcy Act or any State insolvency law was filed
by or against the Company or its Officers, Directors or other key personnel, or
a receiver, fiscal agent or similar officer was appointed by a court for the
business or property of any such persons, or any partnership in which any of
such persons was a general partner at or within the past five years, or any
corporation or business association of which any such person was an executive
officer at or within the past five years, set forth below the name of such
persons, and the nature and date of such actions. Not applicable
Note: After reviewing the information concerning the background of the
Company's Officers, Directors and other key personnel, potential investors
should consider whether or not these persons have adequate background and
experience to develop and operate this Company and to make it successful. In
this regard, the experience and ability of management are often considered the
most significant factors in the success of a business.
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PRINCIPAL STOCKHOLDERS
31. Principal owners of the Company (those who beneficially own directly or
indirectly 10% or more of the common and preferred stock presently outstanding)
starting with the largest common stockholder. There is no common stock issuable
upon conversion of convertible securities.
<TABLE>
<CAPTION>
No. of Shares
Average No. of Shares After Offering if
Class of Shares Price Per Share Now Held % of Total All Securities Sold % of Total
- --------------- --------------- -------- ---------- ------------------- ----------
COMMON
<S> <C> <C> <C> <C> <C>
Donald Penrod $ 1.00 3,500 35% Unchanged Unchanged
Street Address: 574 State Hwy 248, Branson, MO 65616 (417) 334-6271 President of Penrod Financial
and Registered Representative
Becky Penrod 1.00 3,500 35% Unchanged Unchanged
Street Address: 574 State Hwy 248, Branson, MO 65616 (417) 334-6271 President of Foundation Financial
Broker, Penrod Agency
Tamara Haslar 1.00 1,000 10% Unchanged Unchanged
Street Address: 574 State Hwy 248, Branson, MO 65616 (417) 334-6271 Vice President, Penrod Financial
Services, Inc. and Penrod Agency
Inc, (Administrator, Accountant,
Tax Preparer)
Perry Edenburn 1.00 1,000 10% Unchanged Unchanged
Street Address: 574 State Hwy 248, Branson, MO 65616 (417) 334-6271 Registered Representative,
Penrod Financial Services, Inc
Agent, Penrod Agency.
John Tindel 1.00 1,000 10% Unchanged Unchanged
Street Address: 504 W. Main St, Houston, MO 65483 (417) 967-3555 Attorney
</TABLE>
32. Number of shares beneficially owned by Officers and Directors as a group:
Before offering: 9,000 shares ( 90 % of total outstanding)
After offering: a) Assuming minimum securities sold: 9000 shares (90 % of
total outstanding)
b) Assuming maximum securities sold 9000 shares ( 90 % of
total outstanding)
(Assume all options exercised and all convertible securities converted.)
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MANAGEMENT RELATIONSHIPS, TRANSACTIONS AND REMUNERATION
33. (a) If any of the Officers, directors, key personnel or principal
stockholders are related by blood or marriage, please describe. Donald R. Penrod
& Becky L. Penrod are married to each other.
(b) If the Company has made loans to or is doing business with any of its
Officers, Directors, key personnel or 10% stockholders, or any of their
relatives (or any entity controlled directly or indirectly by any such persons)
within the last two years, or proposes to do so within the future, explain.
(This includes sales or lease of goods, property or services to or from the
Company, employment or stock purchase, contract, etc.) State the principal terms
of any significant loans, agreements, leases, financing or other arrangements.
Company may make loans to any of its Officers, Directors, key personnel or 10%
stockholders on the same basis as any other borrower.
34. (a) There has been no remuneration by the Company to Officers, Directors and
key personnel for the last fiscal year:
(b) If remuneration is expected to change or has been unpaid in prior
years, explain: The company has elected Sub Chapter S tax paying status,
therefore profits or loses of the company are attributed to the shareholders.
(c) There are no employment agreements exist or none are being
contemplated.
35. (a) There are no shares subject to issuance under presently outstanding
stock purchase agreements, stock options, warrants or rights.
(b) There are no common shares subject to issuance under existing stock
purchase or option plans but not yet covered by outstanding purchase agreements,
options or warrants:
(c) Any future stock purchase agreements, stock options, warrants or rights
must be approved by shareholders.
36. All key personnel are shareholders of the company.
Note: After reviewing the above, potential investors should consider
whether or not the compensation to manage and other key personnel directly or
indirectly, is reasonable in view of the present stage of the Company
development.
INSTRUCTION: For purposes of Question 39(b), a person directly or indirectly
controls an entity if he is part of the group that directs or is able to direct
the entity's activities or affairs. A person is typically a member of a control
group if an officer, director, general partner, trustee or beneficial owner of a
10% or greater interest in the entity. In Question 40 the term "cash" should
indicate salary, bonus, consulting fees, non-accountable expense, accounts and
the like. The column captioned "Other" should include the value of any options
or securities given, any annuity, pension or retirement benefits, bonus or
profit-sharing plans, and personal benefits (club memberships, company cars,
insurance benefits not general available to employees, etc.). The nature of
these benefits should be explained in a footnote to this column.
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LITIGATION
37. Describe any past, pending or threatened litigation or administrative action
which has had or may have a material effect upon the Company's business,
financial condition, or operations, including any litigation or action involving
Company's Officers, Directors or other key personnel. State the names of the
principal parties, the nature and current status of the matters, and amounts
involved. Give an evaluation by management or counsel, to the extent feasible,
of the merits of the proceedings or litigation and the potential impact on the
Company's business, financial condition or operations.
On February 22, 1993, an inquiry was received by the Company from the Missouri
Commissioner of Securities requesting information regarding the sale of certain
mortgage certificates previously offered by the Company. Although the company
had attempted to determine from the State of Missouri whether or not the
certificates were considered to be securities, the State took the position that
they were securities and that registration was required. On August 2, 1993, an
order to cease and desist was issued by the Commissioner, directing the Company
not to sell any certificates without prior registration. This action will have
no impact on the Company's business financial conditions or operations.
During the same period, the National Association of Security Dealers, Inc opened
an inquiry involving Donald R. Penrod, John George Bauer Jr, Perry A. Edenburn
and Penrod & Company to determine whether any of those persons who are members
of the NASD, had sold unregistered securities. The Company was not a subject of
this investigation. The Investigation was concluded with a Letter of Acceptance,
waiver and consent executed by all the parties and the NASD. This action will
have no impact on the Company's business.
FEDERAL TAX ASPECTS
38. The Company is an S corporation under the Internal Revenue Code of 1986, and
it is anticipated that no significant tax benefits will be available to
investors in this offering
MISCELLANEOUS FACTORS
39. Describe any other material facts, either adverse or favorable, that will or
could affect the Company or its business (for example, discuss any defaults
under major contracts, any breach of bylaw provisions, etc.) or which are
necessary to make any other information of this Offering Circular not misleading
or incomplete.
All facts and factors that are known or anticipated are covered elsewhere in
this document and the prospectus.
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FINANCIAL STATEMENT
40. Financial statements as required by Part F/S of this Offering Circular
section of Form 1-A.
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Foundation Financial, Inc
PO Box 624
Branson, Mo. 65615
I have audited the accompanying balance sheet of Foundation Financial,
Inc. as of December 31, 1995 and 1996 and the related statements of income,
retained earnings and cash flows for the years then ended. These financial
statements are the responsibility of the company's management. My responsibility
is to express an opinion on these financial statements based on my audit
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above, present
fairly, in all material respects, the financial condition of Foundation
Financial, Inc as of December 31, 1995 and 1996 and the results of its
operations, changes in retained earnings and its cash flows for the years then
ended, in conformity with generally accepted accounting principles.
/s/ Loren A. Moore
Loren A. Moore, CPA
December 9, 1997
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STATEMENT OF INCOME
CURRENT YEAR ENDS
9/30/97 1996 1995
Income:
Fees from Loan
Servicing: 20,400 30,600 38,600
Expenses:
Operating Fees 147 819 635
Interest Expense on
current 8% Loan 19,200 28,800 36,800
Net Income: 1,053 981 1,165
STATEMENT OF CASH FLOWS
09/30/97 09/30/96
Cash Flows From Operating Activities:
Net Income $1,053 793
Increase in Accrued Interest Rec 2,550
Net Cash Provided By
Operating Activities 3,603 793
------ ------
Net Increase (Decrease) in Cash 3,603 793
Cash Balance at Beginning of Year 1,080 2,639
------ ------
Cash Balance at End of Year 4,683 3,432
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BALANCE SHEET
CURRENT YEAR END
09/30/97 1996 1995
ASSETS
Current Assets
Cash in Bank-Checking 153 43 469
Cash in Bank-Escrow Acct 4,530 1,037 2,170
Accrued Interest Receivable 2,550
Total Current Assets 4,683 3,630 2,639
--------- --------- ---------
Other Assets
Mortgage Note Receivable 360,000 360,000 360,000
Unamortized Incorp Costs 13 13 23
Total Other Assets 360,013 360,013 360,023
--------- --------- ---------
Total Assets $ 364,696 363,643 362,662
========= ========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Shareholder Loan Payable 11,479 11,479
Total Current Liabilities 11,479 11,479
--------- ---------
Long Term Liabilities
Certificates of Mortgage 360,000 360,000 360,000
Total Long Term Liabilities 360,000 360,000 360,000
--------- --------- ---------
Share Holders Equity
Common Stock 10,000 500 500
Additonal Paid In Capital 1,979
Retain Earnings (Deficit) (7283) (8,336) (9.317)
Total Shareholder Equity 4,596 (7,836) (8,817)
--------- --------- ---------
Total Liabilites and
Shareholder Equity $ 364,596 363,643 362,662
========= ========= =========
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Foundation Financial, Inc
Notes To The Financial Statements
As of December 31, 1995 and 1996
Foundation Financial, Inc. was incorporated in the state of Missouri on January
1, 1993. The company is a mortgage investment company which invests in mortgage
notes. It sells certificates of participation in these mortgage notes to
individual investors. The investor receives an interest rate of approximately
one half percent less that the rate provided by the mortgage note.
1. Income Taxes:
The shareholder of the company has elected S-Corporation tax status. All
income or losses are passed thru to the shareholder. Therefore, the
corporation has no income tax liability.
2. Depreciation and Amortization:
The corporation owns no real estate or other tangible property. An employee
of another corporation owned by the shareholder performs all bookkeeping
and clerical work for the corporation. It utilizes space provided by the
shareholder's other corporation. No fee is charged Foundation Financial,
Inc. for the space or services provided. The corporation had no
depreciation. Amortization consists of write off of incorporation costs
over a 5 year period.
3. Retirement Plan:
The Corporation does not maintain a retirement or profit sharing plan for
employees.
4. Litigation:
The corporation does not have any outstanding claims, judgments, etc. nor
is it involved in any pending litigation.
Due to the way the company is structured, we chose in 1993 & 1994 to take an
accounting loss. This was not an actual operating loss. The 1995 & 1996
accounting records have been independently audited by Loren Moore, PO Box 70,
Kimberling City, MO 65686, (417)334-3455.
+
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF CERTAIN RELEVANT FACTORS
41. The Company's Financial statements do not show losses from operation.
42. Describe any trends in the Company's historical operating results. Indicate
any changes now occurring in the underlying economics of the industry or the
Company's business which, in the opinion of Management, will have a significant
impact (either favorable or adverse) upon the Company's results of operation
with the next 12 months, and give a rough estimate of the probable extent of the
impact, if possible.
Branson is a stable market, positive impact on portfolio. Static portfolio not
adverse.
43. The Company does not sell a product or products.
44. The Company has no Foreign sales.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that is has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-1 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Branson,
State of Missouri.
(Registrant) Branson Foundation Capital Company, Becky L. Penrod, President
--------------------------------------------------------------
By (Signature and Title) /s/ Becky S. Penrod
--------------------------------------------------
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
(Signature) /s/ Becky S. Penrod
---------------------------------------------------------------
(Title) Becky L. Penrod, President, Chairman, and Chief Executive Officer
-----------------------------------------------------------------
(Date) December 12, 1997
-----------------
(Signature) /s/ Tamara L. Haslar
---------------------------------------------------------------
(Title) Tamara L. Haslar, Chief Operating Officer, Chief Finanical Officer,
Principal Accounting Officer, Member of the Board of Directors and Shareholder.
- --------------------------------------------------------------------------------
(Date) December 12, 1997
-----------------
(Signature) /s/ Perry A. Edenburn
---------------------------------------------------------------
(Title) Perry A. Edenburn, Member of Board of Directors and Shareholder.
------------------------------------------------------------------
(Date) December 12, 1997
-----------------
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Instructions for signatures.
(1) Who must sign: the small business issuer, its principal executive officer or
officers, its principal financial officer, its controller or principal
accounting officer and at least the majority of the board of directors or
persons performing similar functions. If the issuer is a limited partnership
then the general partner and a majority of its board of directors if a
corporation.
(2) Beneath each signature, type or print the name of each signatory. Any person
who occupies more than one of the specified positions shall indicate each
capacity in which he or she signs the registration statement. See Rule 402 of
Regulation C concerning manual signatures and Item 601 of Regulation S-B
concerning signatures of powers of attorney.
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