United States securities and exchange commission logo
February 11, 2021
Yuliya Tarasava
Co-Founder & COO
CNote Group, Inc.
2323 Broadway
Oakland, CA 94612
Re: CNote Group, Inc.
Amendment No. 2 to
Offering Statement
on Form 1-A
Filed January 28,
2021
File No. 024-11301
Dear Ms. Tarasava:
We have reviewed your amended offering statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so 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 our comments apply to your
facts and
circumstances or do not believe 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.
Unless we note
otherwise, our references to prior comments are to comments in our
January 11, 2021 letter.
Amendment No. 2 to Offering Circular Dated January 28, 2021
General
1. We note the automatic
renewal feature of the CNote Notes. Please advise us whether the
renewals are factored
into the offering price limit of Rule 251(a)(2). If so, please also
provide your analysis
as to why you believe this offering is a continuous offering pursuant
to Rule 251(d)(3),
rather than a delayed offering, as the renewal CNote Notes will not be
offered until at the
maturity of the initial offering of CNote Notes.
If instead you intend
to rely on an exemption from registration for the automatic renewals,
please provide a
detailed analysis as to the availability of the exemption.
Yuliya Tarasava
CNote Group, Inc.
February 11, 2021
Page 2
2. We note on page 25, and elsewhere, that you intend to close on investors
commitments
only after the "Closing Threshold" is reached and after you have a
funding request from
one of your CDFI borrowers. As you propose to not effect sales unless and
until you have
a funding request from a CDFI borrower, this offering appears to be an
impermissible
offering under Rule 251(d)(3)(i)(F). Please modify the proposed closing
procedure to
remove the closing contingency related to a funding request from a CDFI
borrower.
Offering Circular Summary
Our Solution, page 2
3. We note your revised disclosure related to closings on pages 2, 18 and
24. Please revise
to clarify what you mean by the statement "the Company will release the
commitments to
the investors for future investment" (emphasis added) if a closing has
not occurred within
thirty (30) days following the date a closing threshold is achieved.
The Offering
CNote Notes, page 7
4. We note the revisions you made in response to comment 5 of our letter
dated September
22, 2020. If true, please further revise to clarify that changes made to
interest rates paid
on CNote Notes sold under this offering circular, or any supplement
thereto, will not fall
outside of the specified range.
Compensation of Directors and Executive Officers, page 35
5. Please revise your disclosure to reflect information for your last full
financial year,
i.e., 2020. Refer to Item 11 of Form 1-A for guidance.
Security Ownership of Management and Certain Securityholders, page 35
6. Please revise your disclosure to reflect beneficial ownership of the
latest most practicable
date. Refer to Item 12 of Form 1-A for guidance.
You may contact Lory Empie at 202-551-3714 or Hugh West at 202-551-3872
if you
have questions regarding comments on the financial statements and related
matters. Please
contact David Gessert at 202-551-2326 or Sandra Hunter Berkheimer at
202-551-3758 with any
other questions.
Sincerely,
FirstName LastNameYuliya Tarasava
Division of
Corporation Finance
Comapany NameCNote Group, Inc.
Office of Finance
February 11, 2021 Page 2
cc: Christina T. Roupas
FirstName LastName