Replies to post #614 on Borneo Resource Investments Ltd (BRNE)

[Huggy Bear]

BRNE had seven rejected Form 10's if I recall correctly.

[Cassandra]

I should have said I don't recall ever seeing so many amendments needed or for it to take so many months to have a registration statement approved. Typically I recall most companies I've looked at got through the process pretty quickly. A lot depends on the SEC experience and quality of the lawyer and the willingness of the company to provide all of the disclosure and documentation the SEC requires.

Interestingly, BRNE's attorney, Peter DiChiara, was employed at Richardson & Patel LLP when the Form 10 was first filed and through the first amended filing. He left Richarsson in July 2012 and returned to his former firm of Sichenzia Ross Friedman Ference LLP in August. He was only with Richardson for 1 year and 3 months. It appears he might have been fired. http://www.linkedin.com/pub/peter-dichiara/3/b23/409

Interestingly, two of Sichenzia's OTC clients were suspended by the SEC on 9/17/2012. SAVW was an OTCQB suspended for inaccurate PRs and MIKP was a PK for which SRFF submitted opinion letters regarding financial statements that were found to be inaccurate as were the company's PRs. The KMAG opinion letters weren't even signed by a specific SRFF attorney but just with the firm's name. Having SRFF as BRNE's law firm isn't any kind of testimony for the legitimacy of the company.
http://www.sec.gov/litigation/suspensions/2012/34-67868-o.pdf
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=85005353

DiChiara does not seem to be a top-flight attorney. He started his career as a CPA but later graduated from Pace University School of Law, which in 2013 the U.S. News & World Report ranked #134 out of 145 US law schools ranked. http://en.wikipedia.org/wiki/Pace_University_School_of_Law

One of the reasons it took so many amendments is that DiChaira kept refusing to submit as exhibits the agreements for the concessions listed. He claimed that they weren't material or enforceable and the company may not perform under them. He also tried to claim that filing them as exhibits might confuse readers by causing them to misunderstand that they are non-binding. The SEC didn't buy it. Each time he refused, the SEC asked him again to submit them, and he would again refuse claiming that the SEC was wrong and they were not required. He was also supposed to respond within 10 days of each letter from the SEC but usually took more time.

The reason he did not want to submit the non-binding MOUs and LOIs is because Borneo wanted to sign many more similar non-binding MOUs and LOIs and if they were filed as exhibits, it would "chill" the ability of the company's to enter into such agreements with additional concession holders. In other words, the concession holders would be able to see that they had already signed several non-binding MOUs and LOIs and that they weren't sincere in the intent to purchase them.

In the end, the SEC insisted that they be filed but allowed them to be filed under a confidential treatment order. It's pretty surprising that DiChiara admitted that the exhibits would chill their ability to keep to keep signing these meaningless agreements with additional concession holders. Clearly BRNE just wanted to create false impression to potential investors.

SEC:

3. We note your response to comment 1 in our letter dated September 7, 2012. It continues to appear to us that the noted agreements are material to the company and its plan of operations in the future. The company notes that it is the company’s intention to negotiate with strategic partners to pay for feasibility studies, to construct coal mining infrastructures, and perform mining operations on the identified mining concessions if possible. As previously requested, please file the noted agreements as exhibits to the Form 10.

Borneo Response:

While it may seem, from the number of contracts the Company has entered into, the Letters of Intent could each be a large percentage of the Company’s plan of operation in the future, the Company could enter into another five to ten similar agreements. The Company is not moving forward with other agreements until this issued is resolved because filing these agreements would chill the Company’s ability to enter into these agreements with Indonesian concession owners.

Filing the Letters of Intent may cause confusion among potential readers of this registration statement by causing the readers to misinterpret the Company’s clear disclosure that these contracts are non-binding agreements subject to further negotiation and completion of a definitive agreement.

Once again, the Company makes reference to Item 1.01 of Form 8-K which requires a registrant to file agreements that provide for obligations that are enforceable against a company. The agreements identified in the comment are not enforceable against the Company.

The Company believes that the Letters of Intent that the SEC wants the Company to file are not material and may not be performed in whole or in part at or after the filing of this registration statement.

http://www.sec.gov/Archives/edgar/data/1355732/000101376212001973/filename1.htm