CAPITAL RESOURCE FUNDING, INC.
2212 Lantern Way Circle
Cornelius, North Carolina 28031
(704) 564-1676
December 23, 2004
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-0404
Attn: Chris Windsor, Esq.
Senior Attorney
Office of Emerging Growth Companies
Re: Capital Resource Funding, Inc.
Form SB-2 filed August 16, 2004; Amended October 25, 2004; Amended
December 23, 2004
File Number: 333-118259
Gentlemen:
Thank you for your comment letter dated November 16, 2004 (the "Comment
Letter"), with respect to the above-captioned Registration Statement on Form
SB-2. We have filed our revised Amendment No. 2 to Form SB-2/A (the "Form
SB-2/A") of Capital Resource Funding, Inc. (the "Company"), which incorporates
our responses to your comments, and this letter sets forth each of our responses
in outline form below. Numbered paragraphs refer to the corresponding numbers
contained in the Comment Letter.
For your information, we have filed our revised Form SB-2/A on the EDGAR
system, and have also provided a clean and marked copy by overnight courier to
the staff of the Commission for its review.
At the outset, we would like to inform the staff that we have restructured
this offering in light of several of the staff's comments, so that it no longer
incorporates the share distribution arrangement with Hairmax International, Inc.
In addition, David R. Koran, President and Chief Executive Officer of the
Company, no longer intends to sell any shares of common stock that he owns in
this offering. These changes have resulted in many modifications to our Form
SB-2/A, and we would like to thank the staff for its comments in these areas.
1. We have eliminated the share distribution arrangement with Hairmax
International, Inc., and we have thereby eliminated one of the objections
of the Staff to considering this offering as a secondary offering.
Chris Windsor, Esq.
December 23, 2004
Page 2.
2. Mr. Koran no longer intends to sell 300,000 shares of his common stock, and
we have thereby eliminated one of the objections of the Staff to our use of
Rule 415 in connection with the offering.
3. Our cover page does not presently, and will not, exceed the one-page limit.
4. We have simplified and shortened the discussion on the cover page as
requested.
5. There will be no Hairmax dividend distribution.
6. We have modified references to the Registration Statement that are
contained in the prospectus to refer to the prospectus, where appropriate,
as you requested.
7. There will be no "registered dividend" or any share dividend in connection
with this offering.
8. This estimate of the number of shares of Hairmax common stock held by Cede
& Co. is no longer relevant.
9. Any discussion concerning Haimax's business is no longer relevant to our
offering.
10. We have modified the Summary to present a balanced discussion of the
business and prospects of our company, as requested.
11. We have streamlined the discussion of our business activities contained in
the Summary, as requested.
12. We have moved the discussion of fees generated so that it appears at the
beginning of our streamlined discussion of our business, as requested.
13. We have added appropriate caveats to the discussion of the availability of
additional equity or debt financing, as requested.
14. We have clarified the extent to which Mr. Koran has directly paid certain
expenses and is currently working without any remuneration, as requested.
15. A risk factor concerning Mr. Koran's security sales is no longer
appropriate.
Chris Windsor, Esq.
December 23, 2004
Page 3.
16. We have combined risk factors relating to Mr. Koran's shareholding position
and the control of the Koran family of our Board of Directors into one risk
factor.
17. All subheadings for risk factors are now bold-faced, italicized and in
initial capitals, as requested.
18. We have deleted the statement that "we cannot guarantee that we will
continue to be profitable", inasmuch as we are not profitable.
19. We have provided more detail concerning the nature of the expenses that are
expected to increase, and clarified our intention to pay Mr. Koran a salary
of $40,000 per year, as requested.
20. We have revised the text to avoid the use of vague language with respect to
our plans to be quoted on the OTC Bulletin Board, as requested.
21. The information required by Item 506 of Regulation SB has been included, as
requested.
22. Shareholders that had fractional shares were rounded down, and there were a
large number of Hairmax shareholders who owned less than ninety shares, and
therefore would be entitled to less than one of our shares in the
distribution. Of course, the table has been deleted and this is not
relevant anymore.
23. We have conceded that Greentree Financial Group, Inc. would be deemed to be
a statutory underwriter within the meaning of Section 2(11) of the
Securities Act of 1933, as amended.
24. The Greentree shares have been issued, and this has been clarified.
25. We have re-arranged the text in the first paragraph in this section, as
requested.
26. We have moved the discussion of "competition" as requested.
27. We have provided the reasons why management believes that our potential
fees are realistic.
28. We have revised the discussion on referrals, as requested.
29. We have deleted the reference to a "money center bank".
Chris Windsor, Esq.
December 23, 2004
Page 4.
30. The table has been revised to take into account all projected expenses.
31. We have revised our expense projections, as requested.
32. We have deleted the discussion of one of our competitors from the Business
Plan disclosure.
33. We have expanded the discussion regarding revenue levels we expect to reach
in order to begin paying our CEO, etc.
34. Mr. Koran will not be making a capital contribution inasmuch as he will not
be selling 300,000 shares of common stock in the offering. He will,
however, continue to work without salary for a period of time and pay
certain expenses of our Company.
35. We have removed the discussion that was overlapping in our Results of
Operations section, as requested.
36. We have removed any reference to our cost of sales, as requested.
37. We have quantified the figure for rent contributed by our President and
business expenses paid by him, as requested.
38. We have made the requested revision. A net loss was the only cash item in
our Operating Activity section of the statement of Cash Flows.
39. We have affirmatively stated whether we believe we have sufficient cash on
hand and expectations of cash inflows to meet all of our cash requirements
for the next twelve months. We have also addressed the shortfalls.
40. Any discussion about Hairmax has been deleted and is no longer relevant.
41. Any discussion about Hairmax has been deleted and is no longer relevant.
42. The section concerning the Federal Income Tax Consequences of the Hairmax
Distribution has been deleted.
43. There will be no opinion of tax counsel in this offering.
Chris Windsor, Esq.
December 23, 2004
Page 5.
44. We have confirmed that none of the other officers of our Company are
projected to receive a salary of over $100,000.
45. The Company has elected May 31st as its fiscal year end. The audit was
rendered within 135 days of the date when the Form SB-2 was first filed.
Accordingly, audited financial statements for September 30th are not
required.
46. Our auditor has added a "going concern" qualification to her opinion, and a
footnote discussion of this matter, as requested.
47. We have added a footnote providing detail about our line item Common Stock
To Be Distributed, as requested.
48. We have segregated our selling, general and administrative expenses by
purpose, as requested.
49. We have disclosed in the our footnotes that the financial statements
reflect all the costs of doing business.
50. We have disclosed that we do not intend to retroactively reimburse Mr.
Koran for all business-related expenses and his salary, as requested.
51. We have added a footnote disclosing how we valued the shares issued to each
employee and non-employee during the period presented.
52. We have provided a subsequent events footnote, as requested.
53. We continue to evaluate your comment and are attempting to fashion an
appropriate response to it. Our response will no doubt require additional
legal and accounting research. We respectfully request that the Commission
review and respond to our Form SB-2/A in light of the significant
modifications thereto in response to your comment letter, and reissue
Comment 53 so that we can address it as soon as possible.
Chris Windsor, Esq.
December 23, 2004
Page 6.
Please let us know if you have further questions.
Sincerely,
Capital Resource Funding, Inc.
By: /s/ David R. Koran, President
cc: Harold H. Martin, Esq.