David J. Lychuk and Mary K. Lychuk, et al. - Page 17




                                       - 14 -                                         
          backed notes (Notes).  ACC intended through the offering to raise           
          funds for its current operation, including the acquisition of               
          installment contracts which would be (and were) pledged to secure           
          ACC’s obligations under the Notes.  The Notes matured in 36                 
          months but could be redeemed by the noteholders at 12 or 24                 
          months.  The Notes bore interest at 12 percent during the first             
          year, 13 percent during the second year, and 14 percent during              
          the final year.  The Notes were purchased by approximately 50               
          investors, and approximately five of these investors redeemed               
          their Notes before maturity.                                                
               East-West Capital Corporation (East-West) sold the Notes on            
          ACC’s behalf and was paid a commission equal to 4 percent of the            
          principal amount of the Notes sold, plus 1 percent of the                   
          principal outstanding at 12 months, plus 1 percent of the                   
          principal outstanding at 24 months.  Included in East-West’s                
          commission was a 1 percent due diligence fee.                               
               ACC deducted $29,647, $38,239, and $33,783 of offering                 
          expenses, commissions, and professional fees, respectively, for             
          1993.  ACC deducted $36,251, $74,361, and $110,432 of offering              
          expenses, commissions, and professional fees, respectively, for             
          1994.  The deductions for 1993 and 1994 included costs                      
          attributable to a second private placement offering that was                
          planned in 1993 and abandoned in 1994.                                      








Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011