January 21, 2005
Mail-Stop 0408
Via facsimile and U.S. Mail (864) 250-2359
Mr. Lawrence R. Miller
Chief Executive Officer
Independence Bancshares, Inc.
420 North Pleasantburg Drive
Greenville, SC 29607
Re: Independence Bancshares, Inc.
Form SB-2, filed December 21, 2004
File No. 333-121485
Dear Mr. Miller:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Form SB-2
1. Please revise to add sections for the "Plan of Distribution"
and
"Determination of the Offering Price" to the Table of Contents in
the
Prospectus and include therein the information required by Items
504
and 508 of Regulation S-B. We note that you have much of the
information disaggregated in the Prospectus, but the staff
believes
that due to the type of offering, the information should be
included
in the Table of Contents and in separate sections.
Prospectus Cover Page
2. Add the warrants to the top of the Prospectus, right below the
shares being offered as well as on the back cover page.
3. Supplementally advise the staff and revise the first paragraph
on
page 9 ("The Offering") to indicate the reasons you might accept
subscriptions for more than 50,000 shares and might also accept
those
for less than 100 shares. In addition, who will make the decision?
4. Revise the third sentence of the third paragraph to clarify
that
only 410,000 will be issued. In addition, revise the penultimate
sentence therein to clarify that if all 2,500,000 shares and
410,000
warrants are sold, organizers will own ___% and if only 1,500,000
and
410,000 warrants are sold, they will own __% of the outstanding
stock. In addition, if the organizers have a priority for all of
the
shares, so state.
Prospectus Summary - page 1
Why We Are Organizing
5. Revise the first and second paragraph to indicate the source of
the facts presented, e.g., management`s belief, 2000 U.S. Census
reports, etc.
Risk Factors - page 5
6. Revise to move the risk factors to after, "The Offering"
currently
beginning on page 10.
7. Revise the third risk on page 5 to disclose the primary
requirements for approval of both the bank holding company as well
as
the bank.
8. Revise the fourth risk on page 5 to indicate the approximate
monthly losses or costs anticipated in the event of delays in
receiving regulatory approval.
9. Revise the second full risk on page 6 to indicate whether or
not
the Company will attempt to obtain a sponsoring broker/dealer for
listing on the OTCBB.
10. Revise the last risk on page 6 to clarify that the holding
company will have no operations and therefore can only pay
dividends
to shareholders if it receives dividends form the Bank.
The Offering - page 10
11. Revise the fourth paragraph to briefly discuss the allocation
of
shares in the event of an oversubscription. Will a pro rata for
non-
organizers be used? If so, disclose. If not, so state and explain
the
process and who will decide the allocation.
12. Noting the holding of funds until escrow is broken, which may
not
be until December 31, 2005 and noting the indication that accepted
offers may be rejected until escrow is broken, revise herein to
disclose that when a subscription is rejected, the funds will be
promptly returned. In addition, add a risk factor with a caption
similar to, "Investor funds may be held until December 31, 2005
and
subscriptions may be rejected until that time with no interest
being
paid".
Plan of Distribution - page 11
13. Revise the first paragraph to state that if a broker/dealer is
engaged to participate in the offering; a post-effective amendment
will be filed, naming the broker/dealer and the terms of their
compensation.
Use of Proceeds - page 13
14. Revise to indicate the line of credit outstanding as of the
most
recent practicable date and include that as a use of proceeds in
the
narrative and the table, if material.
Proposed Business
Deposit Services - page 24
15. Revise to indicate whether or not the Bank will seek to
attract
what are commonly called, "Brokered deposits".
Employees - page 25
16. Revise to indicate the functions of the employees, e.g., 5
will
be in lending, 2 in admin, etc. In addition, either add a
subsection
or disclose herein what services will be outsourced, such as,
credit
review, servicing loans, etc.
Accounting Comments
Form SB-2
General
17. Please consider the updating requirements of Item 310(g) of
Regulation S-B when you file your next amendment to the
registration
statement.
18. Please include an updated and signed accountants` consent in
any
pre-filing amendments.
Interest rate sensitivity and liquidity - page 17
19. Please revise your liquidity section to discuss your current
funding situation. Revise to discuss the organizer contribution
deposits recorded on your balance sheet, as well as the line of
credit and the organizer guarantees described in footnote 3.
Lending Activities - page 20
20. Please revise page 21 to disclose how you initially determined
that the allowance for loan loss will be approximately 1.30% of
the
average outstanding balance of loans.
Management`s Discussion and Analysis of Financial Condition or
Plan
of Operations General
21. Please revise to include any recent accounting pronouncements
that are not yet effective which may have an effect on the
financial
statements. Refer to SAB No. 74.
Financial Statements
Note 1 - Summary of Significant Accounting Policies And Activities
- -
page F-7
22. Please revise to include your policies for furniture and
equipment, accounting for warrants and options and other items
significant to your business in its startup phase.
Closing Comment
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 with your amendment that keys your responses to our
comments and provides any requested supplemental 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.
We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filings reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision. 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Any questions regarding the accounting comments may be
directed
to Heather Schimkaitis at (202) 824-5342 or Amit Pande at (202)
942-
2952. All other questions may be directed to Michael Clampitt at
(202) 942-1772 or to me at (202) 942-1760.
Sincerely,
Todd Schiffman
Assistant Director
CC: Via Facsimile: (864) 250-2359
Neil E. Grayson, Esq.
Nelson Mullins Riley &Scarborough, LLP
104 South Main Street
Greenville, SC 29601
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BofI Holding, Inc.
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