What's truly revealing is to read their initial Form 10, which is literally filled with false and misleading claims about the company. It appears they did not know that the SEC has industry specialists who review the claims and ask for more detailed disclosure and documentation. Had this initial registration been declared effective as I'm sure they expected, the company would have falsely appeared very substantial (other than the audited financial statements).
Initial Form 10: http://www.sec.gov/Archives/edgar/data/1355732/000101376212001045/form10.htm
This was the SEC's response: http://www.sec.gov/Archives/edgar/data/1355732/000000000012029838/filename1.pdf
The correspondence from BRNE's attorney in response to the SEC's comments is pathetic and also very revealing.
http://www.sec.gov/Archives/edgar/data/1355732/000101376212001433/filename1.htm
When asked for more detailed disclosure and filing of the agreements on all the concessions they supposedly owned, they fessed up -- admitting that they weren't material agreements and removed or revised all of the previous concession claims. They provided none of the documents requested.
They also had to admit that their officers aren't employees, but independent contractors. They originally tried to claim that their directors received no compensation but since all of their directors are also officers who are compensated they explain that they are not compensated for their work as a director, but only as an officer. They ended up removing the misleading claim.
Because all 3 officers also work as consultants and do not appear to be full time, the SEC wanted disclosure as to how many hours a week they work. The following was the company's response, which is incomplete. Unfortunately the SEC missed this incomplete disclosure and it remains in the final Form 10:
Our officers spend approximately, and some weeks in excess of, 40 hours per week working on the Company’s operation.
There is a lot more that had to be changed as well. The original filing was a complete sham.
To make matters worse, they kept trying to get away with less than full disclosure and the SEC had to keep sending letters asking them for appropriate disclosure and documentation. It took 7 revisions before it was declared effective. In the last 10+ years of reviewing SEC filings, I don't recall ever seeing a company have more than one amendment to a registration statement. Most are declared effective with the first filing. Then again, most companies use qualified attorneys.
I have more comments about what happened in the registration process but will start a new post to prevent excessive length of this one.
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