United States securities and exchange commission logo
November 7, 2023
Catherine Berman
Chief Executive Officer
CNote Group, Inc.
2323 Broadway
Oakland, CA 94612
Re: CNote Group, Inc.
Offering Statement
on Form 1-A
Filed October 24,
2023
File No. 024-12344
Dear Catherine Berman:
We have reviewed your
offering statement and have the following comments.
Please respond to this letter by amending your offering statement
and providing the
requested information. If you do not believe a comment applies 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 this letter, we may have additional comments.
Form 1-A filed October 24, 2023
General
1. It is unclear from your
offering statement the amount of time that may pass between when
an investor may submit
a subscription request, and when you will close the loan. Please
clarify whether this is
a continuous offering, including whether you can and will readily
accept a new
subscription when presented. If you intend to hold off on accepting a
subscription until
other events occur, including having a new CFO loan to originate,
please tell us how you
concluded that you are engaged in a continuous offering of the
notes. Refer to Rule
251 (d)(3)(i)(F) of Regulation A.
2. We note that Section
3.8 of your Subscription Agreement, filed as Exhibit 1A-6A,
includes the following
language: "Investor has read all of the information in the Offering
Statement, including
the 'Risk of Investing' section". While it is generally appropriate to
require an investor to
confirm that they have received a copy of the 1-A or other
documents, it is
inappropriate to require an investor to confirm that they have read the
documents. Please
revise your disclosure to remove the requirement that an investor
Catherine Berman
FirstName LastNameCatherine Berman
CNote Group, Inc.
Comapany 7,
November NameCNote
2023 Group, Inc.
November
Page 2 7, 2023 Page 2
FirstName LastName
confirm that they have read all of the information in the offering
statement or provide your
analysis as to why the requirement is appropriate.
Securities Being Offered
Description of Securities, page 17
3. We note your disclosure regarding interest rates on page 17 that
"[t]he Notes will be
issued at annual interest rates between 1% and 7%. We will
periodically file Supplements
to our Offering Circular to establish the actual interest rate. If we
wish to issue Notes with
an interest rate outside that range, we will file an Offering
Statement Amendment." Since
the 1-A currently does not identify the rate at which you will offer
the notes at the time it
is qualified, please clarify whether you will offer at the current
rate identified in your most
recent supplement to your earlier 1-A offering or revise your offering
statement to clarify
the rate at which you will offer notes upon qualification.
4. Revise this section to clarify, if true, that upon the completion of
the 30-month term, you
are required to repay the full principal amount of the note, plus any
unpaid interest. Please
describe any notice that you will provide to investors, and how you
will make the
repayments to investors (e.g. by check). Alternatively, to the extent
that these notes can be
rolled over, as you apparently provide for notes sold under Regulation
D, as noted in the
notes to financial statements, describe those features. Include how
the interest rate is set,
any notice you will provide to investors of the opportunity to roll
over, and whether a note
will roll over if an investor does not provide affirmative
confirmation of their intention to
roll over.
Governing Law, page 18
5. We note that you are chartered in Delaware and that your legal opinion
is based in
Delaware law. However, you make various references to the binding
nature of California
law throughout your offering statement. Please revise your disclosure
to clarify this
inconsistency.
Limit on Amount a Non-Accredited Investor can Invest, page 19
6. Please disclose how you have confirmed that investors are not spending
more than 10% of
their assets. Refer to Rule 251 (d)(2)(i)(C).
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
prior to
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
Catherine Berman
CNote Group, Inc.
November 7, 2023
Page 3
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
Please contact Aisha Adegbuyi at 202-551-8754 or Christian Windsor at
202-551-3419
with any other questions.
Sincerely,
FirstName LastNameCatherine Berman
Division of
Corporation Finance
Comapany NameCNote Group, Inc.
Office of Finance
November 7, 2023 Page 3
cc: Markley S. Roderick, Esq.
FirstName LastName