CREDEX CORPORATION
454 Treemont Drive
Orange City, FL 32763
386-218-6823 phone
December 16, 2010
Michael Clampitt, Senior Counsel
Division of Corporation Finance
Securities and Exchange Commission
Washington, DC 20549 Mail Stop 4561
Re: Credex Corporation
Amendment No. 1 to Registration Statement on Form 10
Filed November 15, 2010
Form 10-Q for the Fiscal Quarter Ended September 30, 2010
File No. 0-54142
Registration Statement on Form S-1
Filed November 4, 2010
File No. 333-170829
Dear Mr. Clampitt:
We have received your comment letter dated December 8, 2010. We have
reviewed all of your comments and spoken by telephone to some of your staff
members regarding your intended responses to some of your comments and sought
guidance on other comments. The responses that follow are numbered to
correspond with the numbers of your comments. They are also inserted, where
applicable, into the revised Form 10-12g/A Second Amendment and Form S/1 A
First Amendment.
Our responses to your comments are as follows:
Form 10-12g/A First Amendment
General
1. See pages 32 and 33. The date of each sale is listed under the column
entitled DATE. The Reg D closed on December 31, 2008.
1
2. The company has added the following at page 7 under Business:
Milestones
File an S-1 to register and sell, if a public market develops, common
stock to raise up to $500,000.00. To become effective by April 1, 2011.
We estimate that, if a market develops, it will take 3 to 6 months to
raise these funds.
Once we have raised at least $250,000.00 we will hire a management team
member with debt collection experience to supervise our contract
collectors. We estimate that, if a market develops, it will take 4
months to raise these funds and hire this person. Date is now
August 1, 2011.
Contract with debt collection firm or firms. We estimate this to take 1
month. The date is now September 1, 2011.
Purchase portfolio(s) We estimate this to take 1 month. The date is now
October 1, 2011.
Collection efforts begin. The date is now October 1, 2011.
Purchase Primary and Secondary at a price not to exceed 3% of the face
value of the portfolios that is credit card debt only.
Use collection agencies for all collections with a fixed cost not to
exceed 35% of what is collected.
Create Planned Payment Arrangements (PPA) for up to six months.
Sell the remainder of the portfolio, deemed uncollectible, after six
months.
Narrative Description of the Business
3. The authoritative basis is found in the last two paragraphs on page 10
which also continues on page 11.
2
Products and Services
4. We have defined products on page 5 under Products and Services. Our
products are portfolios of credit card debt. Like a car dealer's products are
cars. In addition these portfolios are to some extent repackaged and resold,
hence they are a "product". See page 7 "Portfolio Sale". If you prefer we
can remove Product(s) and substitute portfolios.
Product Servicing/Outsourcing Description
5. We can rely on the collecting performance history of the collectors with
whom we contract. We can also rely on information available from Kaulikn and
Ginsberg and Inside ARM.
6. The Company will supervise collection efforts to see that the procedures
are followed.
Collection notices may be mailed.
Risk Factors
7. We have revised the subheadings in the Risk Factors to express cause and
effect.
8. We do have experienced accounting oversight. Per Mr. Salmond's Resume.
We have reinstated all material Risk Factors please see pages 12 through 19.
9. We have separated the three Risk Factors delineated as follows:
If it is not successful in selling its shares, when offered, Credex may go out
of business.
When it offers its shares for sale to the public, Credex may be unsuccessful
because it has no operations, it has no public market for its shares, and it
has not implemented its business plan.
If Credex does not attain its goals for growth, the Company may go out of
business.
3
Credex has not implemented its business plan, has not hired needed key
personnel, and the required funding for implementation of planned operations.
Because of these factors, Credex may not achieve its business goal for growth.
If Credex does not reach profitability from its operations, Credex may go out
of business.
Credex may not reach profitability from operations because of the competition
it faces, funding needed for key personnel and implementation of the planned
operations, and meeting of its milestones in the next twelve months. [Refer
to page 7 ]
No Historical Basis for Management's Opinion
10. Daily operations. Which to this point have involved almost exclusively
the securing of capital so the Company can execute it's business plan.
Market Price of and Dividends On the Registrant's Common Equity......
11. We have revised Item 9 to state the following:
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON, THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
Glendale Securities of Sherman Oaks, California has agreed with the Company
to seek permission to quote the Company's stock on the Over-the-Counter
Bulletin Board or the Pink Quotation Bulletin Board. The Bulletin Board
interdealer systems both require current information on file with the SEC.
They also provide somewhat real time information as to trades in quoted
securities. The Pink Sheets do not require current information to be on
file and the current tracking of trades in less than real time.
Once a market exists for the Company's stock the Company will determine what
steps need to be taken to raise the equity capital needed to implement the
corporate business plan.
The common stock has not traded on any market and has no market value. No
market may develop.
4
We intend to have our stock quoted on the Over the Counter Bulletin Board, a
FINRA sponsored and operated inter dealer automated quotation system or
quoted by the Pink Quotation System. Quotation of our securities on the Over
the Counter Bulletin Board will limit the liquidity and price of our
securities more than if the securities were listed on an exchange.
No dividends have been paid on the Shares and the Company does not anticipate
the payment of cash dividends in the foreseeable future. If the operations
of the Company become profitable, it is anticipated that, for the foreseeable
future, any income received there from would be devoted to the Company's
future operations and that cash dividends would not be paid to the Company's
Shareholders.
Certain Relationships and Related Transactions
12. We have revised to clarify how Cypress Bend is a related party on
page(s)30. Cypress Bend is the only company we know that has combined
management skills, fund raising skills, accounting skills, legal skills,
experience with the SEC filings, and experience with the needed requirements
for a company to operate in the public environment. Given the loss of our past
president who had died, the Directors of the Company believe this was their
only viable alternative given the circumstances.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No officer or director is related to or has any relationship with any other
officer or director.
Credex has entered into a management contract with Cypress. This contract
provides that Cypress will provide operational support to Credex and to take
Credex Public through Form 10 and S-1 filings with the Securities and
Exchange Commission. Cypress will return the shares it owns to Treasury
Stock upon completion of its contract obligations and receiving payment in
full for its services. Cypress is a Nevada, LLC formed on July 7, 2010 with
three members. As part of the agreement Steven G. Salmond, a member of
Cypress Bend, was installed as Secretary, treasurer, CFO and Director of
Credex. Cypress has a business plan to provide services similar to those
provided to Credex. Credex is Cypress's first client.
5
The Company has entered into subscription agreements to sell its stock as
shown in Item 10.
Each purchaser of stock pursuant to the Private Placement Memorandum signed
a subscription agreement. All of these subscription agreements are the same.
A specimen is attached as Exhibit 10.2.
Recent Sales of Unregisterd Stock
13. The sale of all of this unregistered stock was not pursuant to any public
offering. The stock was not advertised in any media. No solicitation in any
form was made to the general public.
Sales of stock incurred in:
Texas - 1 sale
Massachusetts - 1 sale
Connecticut - 1 sale
Maine - 2 sales
North Carolina - 2 sales
New Jersey - 3 sales
Florida 19 - sales
Mississippi - 1 sale
These sales were all exempt from state registration requirements because of
the limited number of sales.
Form 10-Q for the Fiscal Quarter Ended September 30, 2009
Financial Statements
Note E- Related Parties
14. We have revised NOTE E Paragraph 5 to disclose the agreed upon services.
5. Provide day-to-day operational management of the Company.
In exchange for these services, which the Company anticipates will last for
a six month period, the Company agreed to pay Cypress cash fees of $200,000
as well as provide Cypress with 2,958,625 shares of its stock, which
effectively transfers control of the Company to Cypress during this period.
6
Also, as part of the contract Steven G. Salmond, a member of Cypress Bend
was installed as Secretary, treasurer, CFO and Director of the Company. As
a condition precedent, the fee liability does not become due until all the
services stated in the agreement have been completed. Upon receipt of the
cash payment of $200,000, Cypress is to return the shares to the Company's
treasury.
15. We have revised to conform to all disclosures to all comments issued on
our Form 10 and S-1.
Form S-1
General
16. Cypress Bend shares have been removed from the list of shareholder shares
being offered in this registration. This action makes the offering less than
50% of the outstanding shares of Credex, which we believe would bring the
offering into compliance with Rule 415(a)(4) of Regulation C.
17. Cypress Bend shares have been removed from the list of shareholder shares
being offered in this registration. This action brings the offering consistent
with the disclosure on page 26 of the Company's amended Form 10, which
indicates the shares will be returned to the Company.
18. We have revised all disclosure to our Form 10 and Form 10-Q.
The Company understands it is responsible for the adequacy and accuracy of the
disclosure in the filing.
The Company understands that the staff comments or changes to disclosure in
response to staff comments do not foreclose the Commission from taking any
action with respect to the filing.
The Company understands that it may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under federal
securities laws of the United States.
Sincerely,
/s/ Denise Leonardo
Denise Leonardo
President
7