May 9, 2019
Gerald Ellenburg
Chairman and Chief Executive Officer
ERC Homebuilders 1, Inc.
2738 Falkenburg Road South
Riverview, FL 33578
Re: ERC Homebuilders 1, Inc.
Offering Statement on Form 1-A
Filed April 22, 2019
File No. 24-10987
Dear Mr. Ellenburg:
We have reviewed your offering statement and have the following
comments. In some of
our comments we may ask you to provide us information so that we may better
understand your
disclosure.
Please respond to this letter by amending your offering statement and
providing the
requested information. If you do not believe that our comments apply to your
facts and
circumstances or do not believe that an amendment is appropriate, please tell
us why in your
response. After reviewing any amendment to your offering statement and the
information you
provide in response to these comments, we may have additional comments.
Offering Statement on Form 1-A filed April 12, 2019
Offering Circular's Cover Page, page 1
1. Disclosure that the minimum investment is 83.33 shares of preferred stock
at $500 is
inconsistent with disclosure that the minimum investment is 84 shares of
preferred stock
at $504. Please reconcile the disclosures here and elsewhere in the
offering circular.
Additionally, if you are offering for purchase fractional shares of
preferred stock, so
indicate.
Risk Factors, page 8
2. We note your disclosure that as of November 19, 2018, the date of the
financial
statements, the company has no revenues and is not close to
profitability. We further note
the disclosure that as of November 18, 2018 the company had an
accumulated deficit of
$62,122. Please revise your disclosure to state that November 19, 2018
was the date your
financial statements were available to be issued consistent with your
disclosure on page F-
Gerald Ellenburg
FirstName LastNameGerald Ellenburg
ERC Homebuilders 1, Inc.
Comapany NameERC Homebuilders 1, Inc.
May 9, 2019
May 9, 2019 Page 2
Page 2
FirstName LastName
12. Furthermore, please tell us and expand your disclosures in your
subsequent events
footnote on page F-12 to discuss the transactions that resulted in the
reduction of your
accumulated deficit from $133,750 as of November 10, 2018 to $62,122
as of November
18, 2018.
Terrorist attacks and other acts of violence or war may affect the markets in
which we operate...,
page 9
3. Given disclosure that you intend to become a next generation
wholesaler of build-for-rent
single and two family residences on page 5, the meaning of the
reference to your hotels'
ability to produce operating income is unclear. Please revise.
Prior Performance Summary,, page 39
4. Please disclose in this section that neither the company nor its
affiliated entities have a
prior performance record. We note the disclosure in the first two
bullet points under
"Summary Risk Factors" on page 6.
Financial Statements, page F-2
5. Please revise your filing to disclose the date you have selected as
your fiscal year end.
We remind you that the date you select will impact your updating
requirements related to
the age of your financial statements that should be included in your
offering statement.
See Part F/S of Regulation A for use of Form 1-A.
Independent Auditor's Report, page F-3
6. Please have your auditors revise their report to include the date of
the audit report in their
report. See Rule 2-02 of Regulation S-X.
We will consider qualifying your offering statement at your request. If
a participant in
your offering is required to clear its compensation arrangements with FINRA,
please have
FINRA advise us that it has no objections to the compensation arrangements
before qualification.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments,
action, or absence of
action by the staff. We also remind you that, following qualification of your
Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a
Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
You may contact Ameen Hamady, Staff Accountant, at (202) 551-3891 or
Terence S.
O'Brien, Accounting Branch Chief, at (202) 551-3355 if you have questions
regarding comments
on the financial statements and related matters. Please contact Edward M.
Kelly, Senior
Counsel, at (202) 551-3728 or Sherry Haywood, Staff Attorney, at (202) 551-3345
with any
other questions.
Gerald Ellenburg
ERC Homebuilders 1, Inc.
May 9, 2019
Page 3
Sincerely,
FirstName LastNameGerald Ellenburg
Division of Corporation Finance
Comapany NameERC Homebuilders 1, Inc.
Office of Manufacturing and
May 9, 2019 Page 3 Construction
FirstName LastName