Mail Stop 7010
August 3, 2005
Via U.S. mail and facsimile
Mr. David Eliason
President
Eliason Funding Corporation
548 Highway 155
St. Germain, WI 54558
Re: Eliason Funding Corporation
Amendment No. 1 to Registration Statement on Form SB-2
Filed July 27, 2005
File No. 333-125542
Dear Mr. Eliason:
We have reviewed your amended filing and your response and
have
the following comments. We welcome any questions you may have
about
our comments or any other aspect of our review. Feel free to call
us
at the telephone numbers listed at the end of this letter.
General
1. We read your response to comment one of our letter dated June
30,
2005. Your prospectus must differentiate between your business as
currently conducted and your business as you intend to eventually
conduct it. Although you may plan to originate loans to third
parties in the future, it appears that your current business is
originating loans to affiliates. Please revise your prospectus
and,
in particular your Business section, accordingly.
2. We note your response to comment three of our letter dated June
30, 2005. In reviewing Grant Thornton`s report on the financial
statements on page F-7 and the related consent to utilize their
report in your filing at Exhibit 23.01, we see no indication on
either document that they were manually signed. If you are in
possession of these signed documents, please have Grant Thornton
re-
issue the documents reflecting conformed signatures and amend your
filing as appropriate.
3. We note that the date of the consent of your independent
registered public accounting firm included in this amendment has
not
been updated. Due to the passage of time between your initial
filing
and your amendments, please ensure that future amendments include
a
currently dated consent with a conformed signature.
Prospectus Summary, page 1
Our Company, page 1
4. We note the disclosure in the third and fourth sentences of the
first paragraph of this section. Please revise to clarify that
you
will hold a subordinate position as to all of your loans and that
this priority position may significantly impede your ability to
collect on defaulted loans.
5. Please explain the meaning of a "personal signature" by a
borrowing entity and the effect of this type of signature on the
loans you originate.
6. We note the disclosure in the fourth sentence of the first
paragraph that you will secure the loans "whenever possible."
Please
clarify whether you will originate loans without security.
Risk Factors, page 3
7. We reissue comment 8 of our letter dated June 30, 2005. In
this
regard, we note that this section continues to contain repetitive
risk factors. See risk factors nine and 10 and risk factors four
and
23.
We are not required to sell all of the notes to consummate this
offering..., page 7
8. Please disclose the minimum amount of funds you believe you
need
in order to implement your growth strategy.
There is no established trading market for our notes and you may
not..., page 7
9. We reissue comment 14 of our letter dated June 30, 2005 as it
does
not appear that you have revised this risk factor in response to
our
comment.
The Offering, page 10
10. Please reconcile the disclosure in the fifth bullet point of
this
section with the disclosure in the first sentence of the last
paragraph of this section.
11. We note the disclosure in the first sentence of the last
paragraph of this section. Please disclose the period of time
during
which you will determine whether to accept or reject a
subscription.
For example, will you decide within a week of an investor`s
delivery
of payment and an executed subscription agreement? In addition,
please disclose the reasons why you would not accept a
subscription.
12. We note the disclosure in the third sentence of the last
paragraph of this section. Please disclose the amount of time
following the rejection of a subscription that an investor will
have
to wait to receive the refund of their payment. Please also
disclose
whether you will deposit payments in accounts that generate
interest
or otherwise use these payments for investment purposes prior to
deciding whether to accept a subscription. If so, please disclose
whether you will retain or refund amounts earned on payments in
the
event you reject a subscription.
Use of Proceeds, page 11
13. We reissue comment 15 of our letter dated June 30, 2005. In
addition, please explain the factors that would cause your
operating
expenses to increase with respect to increased receipts of Note
proceeds. Please also discuss the factors that would cause you to
change allocations to address changes in your capital
requirements.
Plan of Operation, page 12
14. We read your response to comment 16 of our letter dated June
30,
2005. Please significantly revise this section to describe with
greater specificity the proposed plan of operation for the next 12
months. Your current disclosure is too general.
Our Market and Market Opportunities, page 13
15. We read your response to comment 18 of our letter dated June
30,
2005. Please revise this section substantially to discuss the
industry in which you operate and to delete the disclosure that
does
little more than market your company, such as the second and third
sentences of the first paragraph and the last sentence of the
second
paragraph. Please also avoid duplicative disclosure in this
section
and in the section entitled "Competition" on page 14.
Competition, page 14
16. We reissue comment 21 of our letter dated June 30, 2005 as it
does not appear that you have discussed the principal methods of
competition in your industry and your competition`s advantages
over
you.
Management, page 16
Description of Securities, page 16
17. We read your response to comment 28 of our letter dated June
30,
2005. Please clarify that the disclosure in this section includes
all of the material terms of the notes.
Payments of Principal and Renewal, page 21
18. We note your disclosure in the last sentence of this section.
Please disclose this intended use of proceeds in the Summary and
Use
of Proceeds sections. Please also add risk factor disclosure
regarding this use of proceeds.
Modification of the Indenture and Supplemental Indentures, page 26
19. We reissue comment 31 of our letter dated June 30, 2005 as it
does not appear that you have disclosed the exceptions.
Where You Can Find Additional Information, page 36
20. We read your response to comment 36 of our letter dated June
30,
2005 and we reissue this comment as it pertains to the fifth
sentence
of the first paragraph of this section. Please be advised that
your
disclosure with respect to any contract or other document should
be
materially complete and investors may rely solely on your
disclosure
without reference to the applicable exhibit.
Exhibit 8.01
21. We note that counsel provided a short-form tax opinion. In
this
regard, we note the opinion set forth in the second sentence of
the
first full paragraph on page 2. As such, the disclosure set forth
in
the section entitled "Material Federal Income Tax Considerations"
in
your prospectus must be the opinion of counsel. Please revise
that
section accordingly.
22. We note that counsel is providing a "should" opinion instead
of a
"will" opinion with respect to its opinion in the first sentence
of
the first full paragraph on page 2. Based on this limitation,
counsel must:
* explain why it cannot give a "will" opinion;
* describe the degree of uncertainty in its opinion; and
* provide risk factor and other appropriate disclosure in the
section
entitled "Material Federal Income Tax Considerations" in your
prospectus setting forth the risks to investors from obtaining a
"should" opinion.
23. Please revise the second sentence of the first full paragraph
on
page 2 to clarify that the section entitled "Material Federal
Income
Tax Considerations" in your prospectus discusses all material
federal
income tax consequences.
24. The section of your prospectus referenced in the second
sentence
of the first full paragraph on page 2 is not properly identified.
Please revise accordingly.
25. We note the statement in the second full paragraph on page 2
that
"the opinions expressed herein are given as of the date hereof and
we
undertake no obligation to supplement this letter if any
applicable
laws change after the date hereof or if we become aware of any
facts
that might change the opinions expressed herein after the date
hereof
or for any other reason." We also note that the tax opinion has
been
dated July 27, 2005. Please be advised that the tax opinion must
speak through the effective date of your registration statement.
Counsel can do this by revising this statement or by filing an
opinion dated the date of effectiveness.
26. Please delete the last sentence of the second full paragraph
on
page 2 as security holders are entitled to rely on the tax
opinion.
Exhibit 25.01
27. We read your response to comment 45 of our letter dated June
30,
2005. Please disclose the filing date of the registration
statement
from which you incorporate Exhibit 3 by reference.
* * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter that is filed on EDGAR with your amendment that keys
your responses to our comments and provides any requested
information. Detailed cover letters greatly facilitate our
review.
Please understand that we may have additional comments after
reviewing your amendment and responses to our comments.
You may contact Patricia Armelin, Staff Accountant, at (202)
551-3747 or, in her absence, John Cash, Accounting Branch Chief,
at
(202) 551-3768 if you have questions regarding comments on the
financial statements and related matters. Please contact Andrew
Schoeffler, Staff Attorney, at (202) 551-3748 or, in his absence,
the
undersigned at (202) 551-3767 with any other questions.
Sincerely,
Jennifer Hardy
Legal Branch Chief
cc: Mr. Geoffrey R. Morgan, Esq.
Michael Best & Friedrich LLP
100 East Wisconsin Avenue, Suite 3300
Milwaukee, WI 53202
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Mr. David Eliason
Eliason Funding Corporation
August 3, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE