Private Placement Memorandum Offering for an Education and Finance Company 

This is an example of a private placement offering memorandum for an education production and services company. As always, the material on this web site is offered with the understanding that TotalFin.com, the author, or publisher is not engaged in rendering investment, tax, legal, accounting, financial planning or other advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The investment choices and services on this site are provided as general information only, and are not intended to provide investment, tax, legal, financial planning, or other advice. This site is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security, which may be referred herein. All names and locations are fictitious in this document.

A registration statement relating to these securities has not been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This private placement shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

PRIVATE PLACEMENT MEMORANDUM DATED SEPTEMBER 1999

http://www.EdFundium.com/

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

$[--.--] per Share

Minimum Subscription: 1,000 Shares at a price of $[--,--]

This Private Placement Memorandum relates to the proposed sale by TechFin Products, EdFundium, (the "Company") of a maximum of 2,000,000 Shares of Common Stock, no par value (the "Shares"), at a purchase price of $[--.--]per Share. This Offering is open to Accredited Investors, as defined under Regulation D of the United States Securities Act of 1933, as amended, and Rule 504 of the United States Securities and Exchange Commission, and residents of certain States, including Kentucky. The minimum subscription is for 1,000 shares at a price of $[-,-]. An Accredited Investor may subscribe for any amount of shares in excess of 1,000 shares in increments of 100 shares each. This Offering is being made subject to the right of the Company to terminate or to modify the offer, in whole or in part, and the Company reserves the right to accept or reject all or any part of a subscription. In the case this Offering is oversubscribed, the Company reserves the right to allocate shares among subscribers and/or to reject subscriptions as it deems appropriate.

Subscriptions may only be made by completing, signing and returning both a Subscription Agreement in the form attached to this Memorandum as Exhibit A: "Form 1 - Subscription Agreement," and either a Purchaser Questionnaire in the form attached to this Memorandum as Exhibit B: "Form 2 - Purchaser Questionnaire," or a Purchaser Representative Questionnaire in the form attached to this Memorandum as Exhibit C: "Form 3 - Purchaser Representative Questionnaire"), together with payment by check or wire transfer in full for the number of shares subscribed. This Offering will terminate on September 30, 1999, unless further extended at the sole discretion of the Company.

AN INVESTMENT IN THE OFFERED SECURITIES INVOLVES A HIGH DEGREE OF RISK.

(SEE SECTION 3: "RISK FACTORS")

THE OFFERED SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAW. NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRIVATE PLACEMENT MEMORANDUM OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

The Shares are offered by several Underwriters, subject to prior sale, when, as and if issued to and accepted by them and subject to approval of certain legal matters by [ ], counsel for the Underwriters. The Underwriters reserve the right to withdraw, cancel or modify the offer and to reject orders in whole or in part. It is expected that delivery of the Shares will be made against payment in [Kentucky, Kentucky], on or about September 30, 1999.

This document has been prepared by TechFin Products for discussion purposes only and is being delivered to a limited number of prospective investors who have indicated an interest in the Company.

The following material is furnished on a confidential basis for those wishing to evaluate the current and prospective activities of TechFin Products. In essence, the data provides background information to entities in connection with their deliberations concerning investing in TechFin Products.

The information, databases and/or spreadsheets described in this document are furnished under a nondisclosure agreement. No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or informational storage and retrieval systems, for any purpose without the express written permission of Steven Jones.

IMPORTANT NOTICES

THE INFORMATION PRESENTED HEREIN WAS PREPARED BY THE COMPANY AND IS FURNISHED SOLELY FOR USE IN CONNECTION WITH THIS OFFERING BY PROSPECTIVE INVESTORS. THE COMPANY MAKES NO REPRESENTATIONS AS TO THE FUTURE PERFORMANCE OF THE COMPANY. INFORMATION OR REPRESENTATIONS GIVEN OR MADE BY THE COMPANY OR ANY OTHER PERSON IN CONNECTION WITH THESE MATERIALS, WHETHER ORAL OR WRITTEN, ARE QUALIFIED IN THEIR ENTIRETY BY THE INFORMATION INCLUDED HEREIN, INCLUDING BUT NOT LIMITED TO, THE RISK FACTORS SET FORTH HEREIN. THIS MEMORANDUM

DOES NOT PURPORT TO BE ALL INCLUSIVE OR CONTAIN ALL INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE. EACH INVESTOR MUST RELY UPON HIS OR HER EXAMINATION OF THE COMPANY AND THE OFFERING TERMS, INCLUDING THE MERITS AND RISKS INVOLVED IN MAKING AN INVESTMENT. PRIOR TO MAKING AN INVESTMENT DECISION REGARDING THE OFFERED SECURITIES, A PROSPECTIVE INVESTOR SHOULD CONSULT HIS OR HER OWN COUNSEL, ACCOUNTANTS AND OTHER ADVISORS AND CAREFULLY REVIEW THIS MEMORANDUM.

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND THEIR TRANSFER IS RESTRICTED. THEY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

THIS OFFERING IS BEING MADE TO A LIMITED NUMBER OF PROSPECTIVE PURCHASERS IN RELIANCE UPON THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS IN THE SECURITIES ACT, INCLUDING THE PROVISIONS OF REGULATION D PROMULGATED THEREUNDER. ACCORDINGLY, THIS MEMORANDUM SHALL NOT BE DISTRIBUTED TO, NOR SHALL AN OFFER, SOLICITATION, OR SALE BE MADE TO ANY PERSONS UNLESS SUCH PERSON HAS COMPLETED AND EXECUTED EITHER THE PURCHASER QUESTIONNAIRE OR THE PURCHASER REPRESENTATIVE QUESTIONNAIRE DISTRIBUTED TO HIM, AND THE COMPANY HAS REASONABLE GROUNDS TO BELIEVE, AND DOES BELIEVE, IMMEDIATELY PRIOR TO MAKING SUCH OFFER, SOLICITATION OR SALE, THAT SUCH PERSON, EITHER ALONE OR TOGETHER WITH HIS PURCHASER REPRESENTATIVE, HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS, THAT HE IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF THE PURCHASE OF THE SHARES DESCRIBED HEREIN, AND THAT SUCH PERSON IS ABLE TO BEAR THE ECONOMIC RISK OF SUCH INVESTMENT. IN ADDITION, EACH PURCHASER MUST REPRESENT THAT HE IS ACQUIRING THE SHARES SOLELY FOR HIS OWN ACCOUNT FOR INVESTMENT PURPOSES ONLY AND WITHOUT ANY INTENTION TO DISPOSE OF SUCH PROPERTY.

DISPOSITION BY A PURCHASER OF ANY OF THE SECURITIES DESCRIBED HEREIN (WHICH IS CONSIDERED THE DISPOSITION OF A "SECURITY," AS DEFINED UNDER FEDERAL SECURITIES LAW AND UNDER CERTAIN STATE REGULATORY LAWS) IS LIMITED UNDER THE SUBSCRIPTION AGREEMENT. THE SUBSCRIPTION AGREEMENT GIVES THE COMPANY A RIGHT OF FIRST REFUSAL, WHICH GRANTS THE COMPANY AN OPTION FOR 30 DAYS TO BUY THE SECURITIES FROM A PURCHASER AFTER THE PURCHASER RECEIVES A BONA FIDE OFFER TO BUY HIS OR HER SECURITIES. IN ADDITION, THE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY A PURCHASER UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AND THE PURCHASER HAS, PRIOR TO ANY TRANSFER, FURNISHED THE COMPANY WITH AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, THAT SUCH TRANSFER DOES NOT VIOLATE ANY APPLICABLE LAW. AS A RESULT, A PURCHASER MAY BE REQUIRED TO RETAIN OWNERSHIP OF THE SECURITIES AND BEAR THE ECONOMIC RISK OF HIS INVESTMENT FOR AN INDEFINITE PERIOD.

THE COMPANY SHALL MAKE AVAILABLE TO EACH PROSPECTIVE PURCHASER OR HIS AGENT, DURING THIS OFFERING, AND PRIOR TO THE SALE OF THE SHARES, THE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM ANY PERSON AUTHORIZED TO ACT ON BEHALF OF THE COMPANY CONCERNING ANY ASPECT OF THE INVESTMENT AND TO OBTAIN ANY ADDITIONAL INFORMATION TO THE EXTENT THE COMPANY POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION CONTAINED IN THIS MEMORANDUM. ALL ESTIMATES CONTAINED HEREIN ARE FOR ILLUSTRATIVE PURPOSES ONLY AND DO NOT CONSTITUTE REPRESENTATIONS WITH RESPECT TO FACT. IT SHOULD NOT BE ASSUMED THAT THE FORM CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM IS CORRECT AS OF ANY TIME AFTER ITS ISSUANCE. ANY INFORMATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED HEREIN AND NO PERSON, EXCEPT FOR THE COMPANY, IS AUTHORIZED TO MODIFY OR VARY ANY OF THE INFORMATION CONTAINED HEREIN.

NO ONE SHOULD CONSTRUE THE CONTENTS OF THIS PRIVATE PLACEMENT MEMORANDUM OR ANY COMMUNICATION, WHETHER WRITTEN OR ORAL, FROM THE COMPANY, ITS EMPLOYEES, OR AGENTS, AS LEGAL, TAX, ACCOUNTING, OR OTHER EXPERT ADVICE. EACH PROSPECTIVE PURCHASER, PRIOR TO HIS ACQUISITION OF THE SHARES, IS ADVISED TO CONSULT HIS OWN COUNSEL, ACCOUNTANT, AND OTHER PROFESSIONAL ADVISORS AND CONSULTANTS AS TO LEGAL, TAX, ACCOUNTING AND BUSINESS MATTERS CONCERNING HIS OR HER PURCHASE.

THIS PRIVATE PLACEMENT MEMORANDUM MAY NOT BE REPRODUCED OR USED IN ANY OTHER MANNER WITHOUT THE EXPRESS WRITTEN CONSENT OF THE COMPANY. NO RECIPIENT OF THIS REVISED PRIVATE PLACEMENT MEMORANDUM IS AUTHORIZED TO DIVULGE ANY OF THE CONTENTS HEREOF OR TO DISSEMINATE OR DISCUSS ANY OF THE INFORMATION OR MATERIALS CONTAINED HEREIN. EACH RECIPIENT AGREES TO MAINTAIN THE MEMORANDUM IN CONFIDENCE. BY ACCEPTING DELIVERY OF THIS MEMORANDUM, EACH RECIPIENT AGREES TO RETURN THE REVISED PRIVATE PLACEMENT MEMORANDUM AND ALL RELATED DOCUMENTATION, MATERIALS, OFFERING STATEMENTS, AND INQUIRY FORMS TO THE COMPANY IN THE EVENT THAT THE PROSPECTIVE PURCHASER ELECTS NOT TO CONSUMMATE THE PURCHASE OR THE COMPANY REJECTS THE PURCHASE OFFER OR TERMINATES THE OFFERING.

THE SHARES ARE OFFERED ONLY BY A NUMBERED, CONFIDENTIAL, REVISED PRIVATE PLACEMENT MEMORANDUM. DELIVERY OF THIS REVISED PRIVATE PLACEMENT MEMORANDUM IS NOT AN OFFER OR SOLICITATION UNLESS THE BLANKS ON THE COVER PAGE ARE COMPLETED WITH A NUMBER AND THE PROSPECTIVE OFFEREE’S NAME. FURTHER, DELIVERY SHALL NOT BE CONSTRUED TO BE AN OFFER TO OR SOLICITATION OF ANY PERSON IN ANY JURISDICTION TO WHOM SUCH AN OFFERING OR SOLICITATION WOULD BE UNLAWFUL. THE COMPANY MAY REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART. NO SUBSCRIPTION WILL BE EFFECTIVE UNTIL ACCEPTED IN WRITING BY THE COMPANY.

No person has been authorized to give any information or to make any representations in connection with this Offering other than those contained in this Private Placement Memorandum ("PPM") and, if given or made, such other information and representations must not be relied upon as having been authorized by the Company or the Underwriters. Neither the delivery of this PPM nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

This PPM does not constitute an offer to sell or a solicitation of an offer to buy any securities other than those made pursuant to exemptions from registration provided by Section 4(2) of the United States Securities and Exchange Act of 1933, as amended, Regulation D, Rule 504 of the United States Securities And Exchange Commission, as promulgated thereunder, and under applicable state securities laws and regulations. This PPM does not constitute an offer to sell or a solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful.

The Business

TechFin Products/EdFundium (the "Company") is a globally-oriented, Internet-enhanced, education production and service company that will 1) develop, capitalize and manage original education projects; and 2) exploit emerging e-commerce technologies to create a hybrid form of online finance and education. The Company provides "turn-key" solutions for the development and use of original education assets by capitalizing projects through a $400 million, limited partnership, Education Products Financing Fund; ("EPROD Financing Fund;"); and producing, aggregating and managing projects through the use of traditional Project Finance techniques and the Internet.

EdFundium will use its patent-pending business model and Web site (<http://www.EdFundium.com/>) to: 1) interact with its potential shareholders, EPROD Financing Fund; and EPROD Project; investors and project customers, users, subscribers and participants; 2) create online education investment opportunities previously unavailable to the general public: "public venture capital."; 3) market and cross-promote the EPROD Financing Fund;, EPROD Projects; and related merchandise; and 4) provide public participation in a project's lifecycle - from concept development through launch and long-term use - as educating, multimedia events. 

The projects to be developed by EdFundium will include both the "bricks and mortar" and "multimedia" varieties. "Bricks and Mortar" projects include education, music and convention centers, celebrity resorts and restaurants, spas and wellness centers, video gaming and amusement centers, and motor education complexes. "Multimedia" projects include celebrity education events, film, television, music and Internet-based educational programming and productions, education franchises, merchandising, and intellectual property assets.

B. Investment Products

C. Internet Products

...

...

...

Consulting Services-- Integrated Solutions Provider

The Company also will provide a variety of consulting services to both the consumer and business communities. These include:

• Strategic Consulting;

• Concept and Event Origination;

• Financial Advisory Services;

• Marketing, Advertising and Public Relations;

• Talent Management and Production; and

• Internet/Web Development & Content Localization.

Type of Security: Common

Shares to be Offered: 2,000,000

Common Stock that will be Outstanding after the Offering: 8,000,000

Net proceeds from the sale of the Shares will be used as follows:

1.2 Corporate Mission

TechFin Products/EdFundium (the "Company") is a globally-oriented, Internet-enhanced, education products and services that will 1) develop, capitalize and manage original education projects; and 2) exploit emerging e-commerce technologies to create a hybrid form of online finance and education. The Company provides "turn-key" solutions for the development and use of original education assets by capitalizing projects through a $400 million, limited partnership, Education Products Financing Fund; ("EPROD Financing Fund;"); and producing, aggregating and managing projects through the use of traditional Project Finance techniques and the Internet.

The projects to be developed by EdFundium will include both the "bricks and mortar" and "multimedia" varieties. "Bricks and Mortar" projects include education, music and convention centers, celebrity resorts and restaurants, spas and wellness centers, video gaming and amusement centers, and motor education complexes. "Multimedia" projects include celebrity education events, film, television, music and Internet-based educational programming and productions, education franchises, merchandising, and intellectual property assets.

Each of the Company’s investments will capitalize on premiere development opportunities and market inefficiencies and take advantage of regional, national and international trends in consumer behavior in the education industries and changes in technology, such as digital convergence.

The financial soundness, success and integrity of the Company and it’s investments will be secured by the application of a broad spectrum of time-tested, structured finance techniques, cutting-edge analytical tools and innovative investment strategies, including:

1. Creation and management of Financing Funds to package and finance projects — the EPROD Financing Funds^; — available to retail (individual) and institutional investors, both off- and online;

2. Raising project "seed" or working capital for individual properties and projects through SEC SCOR/U-7 offerings on the Internet — the EPROD Public TechFin Offerings — available to retail (individual) and institutional, non-accredited and accredited investors, both off- and online;

3. Employment of cutting-edge analytical tools to evaluate the investment potential of proposed projects, including forecasting and risk analysis programs and methodologies to analyze senior debt and return on equity); and the system to analyze the construction and operation risks associated with a project’s development and operation);

4. Strategic alignment with industry leaders in economic planning, marketing, advertising, talent management and production, construction, investment banking, telecommunications and Internet commerce;

5. Employment of clearly developed exit strategies, including:

• Recapitalization using the United States Securities Act of 1933, as amended, Rule 144A – Private Resales of Securities to Institutions, and a Real Estate Investment Trust ("REIT");

• Initial Public Offerings of both (a) individual projects; and (b) pooled portfolio holdings;

• Stock Exchange listing of the entire Fund;

• Negotiated sale of (a) individual projects; (b) pooled portfolio holdings; and/or (c) the entire Fund to strategic, contractually-obligated income investors/buyers;

• Put/call options to local partners, private companies or institutions on specific investments; and

• Long-term return from high quality cash flow/dividend without a direct exit strategy.

1.3 The Offering

The Company is offering 2,000,000 shares ("Shares") of Common Stock ("Common Stock") at a purchase price of $[--.--] per Share for an aggregate offering price of eleven million dollars ($[--,--,--]) to qualified investors in a transaction that is intended to be a private placement exempt from registration under federal and state securities laws. The Company, however, reserves the right to accept purchases for more or less than 2,000,000 Shares and to reject any subscription in whole or in part at its sole discretion. Assuming that all of the 2,000,000 Shares of the Common Stock are sold in this Offering, purchasers of the Shares will own approximately 23.2% of the Company’s outstanding capital stock on a fully diluted basis. Interested investors will be asked to complete a Subscription Agreement and either a Purchaser Questionnaire or Purchaser Representative Questionnaire setting forth the qualifications for terms and conditions governing the purchase of the Common Stock and certain continuing obligations of purchasers. The forms are attached to this Memorandum as Exhibit A: Form 1 — Subscription Agreement; Exhibit B: Form 2 — Purchaser Questionnaire; and Exhibit C: Form 3 — Purchaser Representative Questionnaire.

1.4 Outstanding Shares

After giving effect to the sale of the Shares offered hereby, the Company’s outstanding Common Stock as of this Offering, on a fully diluted basis, is as follows:

1.5 Use of Proceeds

The net proceeds from the sale of the Shares will be used to fund the following:

1. Organizational and offering expenses in connection with the Company’s asset management activities;

2. Strategic acquisitions;

3. Further development and enhancement of its Internet presence;

4. Working capital and general corporate purposes; and

5. Property investment opportunities.

Pending such uses, the net proceeds will be invested in high quality, short-term, interest-bearing securities or accounts. Management believes that the Company can successfully implement a less aggressive business plan, if the Company receives proceeds of at least $1,000,000. (See Section 4.0: "Use of Proceeds").

1.6 Eligible Investors

This Offering is made in reliance on exemptions from the registration and qualification requirements of the United States Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities laws. Purchasers of shares of Common Stock must qualify as Accredited Investors within the meaning of Rule 501 promulgated by the United States Securities and Exchange Commission. Subscriptions will be accepted only from investors who meet the suitability standards discussed herein. (See Section 21.0: "Investor Suitability").

1.8 Investment Highlights

A. Experienced Management Team

The Company consists of professionals with extensive experience and networks of contacts in investment banking, asset management, corporate sponsorship and advertising, new information technologies, law, real estate development and the education, technology industries.  ...

B. Experienced Celebrity and Industry Advisors

The Company expects to be assisted by knowledgeable and experienced Celebrity and Industry Advisors, including Arlyne Boardwalk (President of the Boardwalk Agency); David P. Welle (President of Mid-America Leisure Consulting); Steven Brown (President and Chief Executive Officer of Capital Hotels; and Ralph Tucker (Professional Tennis Player on Senior Tour and Media Commentator).

C. Investment Strategy

With a convergent business strategy incorporating the Internet, structured (project) finance, and education content, the Company, in conjunction with its strategic advisors and participants, plans to deliver a broad spectrum of global, real- and cyberspace products and services. 

The Company will seek to identify attractive investment opportunities that capitalize on regional, national and global trends in consumer behavior and changes in the education and technology industries. Such opportunities will be characterized by high growth potential, predictable cash flow from operations, a strong competitive position, and significant market share.

D. Investment By Management And Affiliates

From its inception, the Company has financed all of its capital needs from internally generated funds. Upon the successful closing of the proposed EPROD Financing Fund, the Company will commit one million dollars ($1,000,000) as a limited partner to the Fund.

E. Return on Investment Potential

The Company’s objective is to achieve an above-market, pre-tax rate of return of at least 20% per annum, net to investors, through the use of structured (project) finance. Returns will be realized in the form of cash dividends and distributions as declared by the Company’s Board of Directors.

Investment in the Shares involves a substantial degree of risk and should be regarded as speculative. Accordingly, there can be no assurance that the objectives of TechFin Products (EdFundium) will be realized. As a result, the purchase of Shares should be considered only by persons who can reasonably afford the loss of their investments. Prospective investors should carefully consider, in addition to matters set forth elsewhere in this Memorandum, the following factors relating to the business of the Company and this Offering.
 

3.1 Limited Operating History; Limited Capital; Start-Up Company

The Company was recently organized and has not established any revenues or operations that will provide financial stability in the long term. The Company believes that the proceeds of this Offering will provide sufficient capital to fund its operations until it achieves "break-even" and can seek bank financing, if necessary. However, there can be no assurance that the Company can realize its plans on the projected timetable in order to reach sustainable or profitable operations. Any material deviation from the Company’s timetable could require that the Company seek additional capital. There can be no assurance that such capital will be available at reasonable cost, or that it would not materially dilute the investment of investors in this Offering if it is obtained.

Investment in a start-up company such as the Company is inherently subject to many risks, and investors should be prepared to withstand a complete loss of their investment. The Company only has a limited operating history upon which investors may base an evaluation of its performance. Therefore, it is still subject to all the risks incident to the creation and development of a new business. The Company plans to conduct closings of sales of Common Stock as subscriptions are received. If less than $1,000,000 is received from purchases of Common Stock, the Company will have insufficient cash to implement its plans as described below in Section 4.0: "Use of Proceeds," and investors who do purchase Common Stock will be at heightened risk of loss of their investment.

3.2 Limited Operating History; Limited Capital; Start-Up Company

The primary components of the Company’s strategic plan involves the establishment of the proposed EPROD Financing Fund(s) and EPROD Public TechFin Offerings; development of EPROD Projects; and the creation and development of the global EdFundium Network and the TechFin Products Community. However, there can be no assurance that the proposed investment offerings, projects and Internet enterprise will be established, and, once established, will be successful. In the event that these key products are not consummated, the Company’s future growth could be curtailed.
 

3.3 On-Going Capital Requirements

The Company may have to rely on additional equity financing to implement its growth strategy. Should such financing not be available, the Company could be forced to curtail its growth plans substantially. Also, there can be no assurances that such equity capital, if available, can be obtained on terms favorable to existing investors or to the holders of the Shares being offered. (See Section 4.0: "Use of Proceeds").
 

3.4 Competition

The markets for the Company’s products and services are highly competitive. There are many companies that compete to obtain and develop education properties and projects, offer investment products, have various Web-based enterprises, and provide financial, project and Internet development services. The Company’s principal competitors may have greater financial resources than those available to the Company and may be in a better position than the Company to attract talent, initiate projects, and thus effect broad market distribution of completed projects. There can be no assurance that the Company consistently will be able to undertake projects that will prove profitable to the Company in view of the intense competition to be encountered by the Company in all significant phases of its activities.

The Company’s ultimate success also depends and will continue to depend upon its ability to create, acquire and produce projects and properties that will have significant appeal in the highly competitive education markets. Competition is likely to increase as the industry matures, more competitors expand their services and geographic coverage, and the Company moves into new markets.

Commercial use of the Internet and the provision of user interest, consumer behavior, content and functionality via the Internet are experiencing rapid technological change. Hardware, software and telecommunications technologies are all subject to material improvements in performance and decreases in cost that result in lower barriers to competition in the marketplace for services similar to those offered by the Company. While the Company’s Management believes that the Company’s products and services will enjoy an initial competitive advantage based upon its integration of education content, sound financial techniques and the latest available information technologies, there can be no assurance that other competing technologies, content, and services will not be available either when, or in the future, after the Company completes the commercial launch of its business. As a result, the Company’s expected technological and strategic advantages could be lost at any time, with corresponding adverse effects upon the results and prospects of the Company.  

3.5 Reliance on Management

The Company’s operations are dependent on the continued efforts of Management, including Steven Jones., Carol Tripp, Esq., Brian Homer and David Sawyer. The loss of the services of any of these individuals could have a material adverse effect on the Company. (See Section 12.0: "Management".
 

3.6 Attraction and Retention of Professional Personnel

The Company’s ability to realize its objectives will be dependent on its ability to attract and retain additional, qualified personnel. Competition for such personnel can be intense, and there can be no assurance that the Company’s results will not be adversely affected by difficulty in attracting and/or retaining qualified personnel. The Company plans on maintaining key man life insurance on senior management and to require all personnel to enter into confidentiality agreements as a condition of their employment. The Company’s Management has entered into employment agreements that include non-compete and confidentiality requirements. There can be no assurance that such agreements will fully protect the Company from competitive injury if any of these individuals leave the Company.
 

3.7 Reliance On Strategic Affiliations

Integral to the Company’s business strategy is the utilization of strategic affiliations. The Company’s operations are dependent on the continued efforts of these relationships. Should any such affiliate be unable or unwilling to continue its present and/or future involvement, the Company’s prospects could be adversely affected. 
 

3.8 Limited Insurance Coverage

Similar to other companies in the industry, the Company has found it difficult to obtain, on an economical basis, insurance coverage against all possible liabilities that may be incurred in connection with the conduct of its business. Accordingly, a partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on the Company.
 

3.9 Labor Relations

Many individuals who may become associated with the Company’s productions are members of guilds or unions, which bargain collectively with producers on an industry-wide basis from time to time. In such cases the Company’s operations would be dependent on compliance with the provisions of collective bargaining agreements or the governing relationships with these guilds and unions. Strikes or other work stoppages by members of these unions could delay or disrupt the Company’s activities, and have a material, adverse effect on the Company.
 

3.10 Regulation

Certain segments of the education and technology industries, including broadcast networks, cable networks and radio stations, and, more recently, the Internet, have been subject to substantial regulation at the international, federal, state and local levels. Regulation covers such areas as ownership, licensing, acquisition, programming content, access to programming and networks, and, in the case of cable television, charges to consumers. In the past, the regulatory environment, particularly with respect to the telecommunications industry and the television and radio industry, has been fairly rigid. To the extent that the Company’s projects do not comply with certain of these regulations, they may be edited or effectively prohibited from exhibition in applicable television stations, networks and in foreign territories. Likewise, there can be no assurance that regulations currently in effect or adopted in the future will not have a materially adverse effect on the Company’s ability to conduct its business.

The television industry is subject to regulation by the Federal Communications Commission (the "FCC"). The networks are currently limited by the Financial Interest and Syndication Rules of the FCC in the amount of programming they may produce and the rights that they may retain in programs. However, these rules were recently relaxed in favor of the networks. The softening of the Financial Interest and Syndication Rules could adversely impact the Company as a result of potential increased competition from the networks.
 

3.11 Impact of Government Regulations

The Company’s business is subject to review by governmental authorities. The Company intends to operate its business in compliance with all applicable regulations. However, the development of Internet content and securities and investment businesses, the increasing number and complexity of the regulations and the decentralized nature of the Company’s anticipated client base all will contribute to the risk that the Company may at some time become the subject of regulatory action, which could include administrative or judicial orders restricting its business, fines, restrictions upon who may manage or work for the Company and the imposition of fines or orders to pay damages, all of which could have and adverse effect on the business of the Company.
 

3.12 Dilution

After completion of the Offering, the existing shareholders will own 6,625,000 shares of the Common Stock, representing 76.8% of the Company’s Common Stock (assuming 2,000,000 shares of the Common Stock are sold), whereas the Purchasers of Common Stock in this Offering will own 23.2% of the Company’s Common Stock, for which they will have paid $[--.--]/Share, representing an immediate dilution in their investment. In the event the Company requires additional equity financing pursuant to the Shares offered hereunder, the Purchasers of the Shares may experience further dilution to the extent that additional shares may be issued for a value less than the price paid for the Shares. (See Section 6.0: "Dilution").
 

3.13 Projections

The financial projection discussion of the Company included in this Memorandum is based upon assumptions that the Company believes to be reasonable. (See Section 8.0: "Selected Financial Data"; Section 9.0: "Management’s Discussion and Analysis of Financial Condition and Results of Operations"; and Section 10.0: "Pro Forma Statement". Such assumptions may, however, be incomplete or inaccurate, and unanticipated events and circumstances may occur. For these reasons, actual results achieved during the periods covered may be materially and adversely different.

Even if the assumptions underlying its plans prove to be correct, there can be no assurance that the Company will not incur substantial operating losses in attaining its goals. The Company’s plans are based on the premise that existing consumer demand for education products properties, projects, goods, services, investment opportunities and the Internet will continue. There can be no assurance that the Company’s objectives will be realized, if any of the assumptions underlying its plans prove to be incorrect. Investors should be aware that no independent market studies have been conducted by the Company regarding the Education Products industries, nor are any such studies currently planned.

The Company’s independent public accountants have not compiled or examined the documents, and accordingly, are unable to express an opinion or give any other form of assurance concerning such documents.
 

3.14 Liquidity

The shares of Common Stock offered hereby are being offered in a private offering based upon available exemptions from federal and state securities laws. There is no public market in which Shares of Common Stock may be sold, and it is not anticipated that any such market will develop in the foreseeable future. Purchasers of Common Stock in the Offering will be parties to the Registration Rights Agreement, but there is no assurance that the Company will be able to register the resale of its Common Stock in the future or that a public offering of Common Stock will be possible. Accordingly, and as provided in the Subscription Agreement, attached to this Memorandum as Exhibit A: "Form 1 — The Subscription Agreement," the Purchaser Questionnaire attached to this Memorandum as Exhibit B: "Form 2 — The Purchaser Questionnaire," and the Purchaser Representative Questionnaire attached to this Memorandum as Exhibit C: "Form 3 — The Purchaser Representative Questionnaire," Shares purchased in this Offering may not be resold unless there is an available exemption from such laws. In addition, the Subscription Agreement contains other contractual restrictions on the ability of the Purchaser to sell or pledge the Shares owned, including a requirement that any Shares proposed to be sold be offered first to the Company, and a requirement that any Purchaser execute a form of an Addendum as attached to the Subscription Agreement wherein the Purchaser agrees to be bound by the Subscription Agreement. Purchasers of Shares of Common Stock may find these restrictions limit or prohibit their ability to sell Shares of Common Stock, and, therefore, should be prepared to hold their Shares for an indefinite period of time.
 

3.15 Restrictions On Transfer

Investors will own unregistered securities comprising a minority interest in a privately traded company. The Shares may not be transferable under certain state securities laws, which require registration or qualification. In such cases, the Subscriber desiring to dispose of Shares must deliver to the Company an opinion of counsel satisfactory to the Company to the effect that the proposed disposition of shares will not violate the registration or qualification requirement of the relevant state securities law. The Subscription Agreement also provides that a shareholder seeking to sell shares of Common Stock must first offer them to the Company which then has the right of first refusal before they may be sold.

Because of potential restrictions on transferability of the Shares, and the fact that no trading market exists or is expected to develop for the Shares, holders of the Shares are not likely to be able to liquidate their investments or pledge the Shares as security on a loan in the event of an emergency. Thus, the Shares should be considered only as a long-term investment. There can be no assurances that the Company will be able to effect a public registration of its Shares as its present level of business does not merit public ownership. In order to effect value from a public offering, a suitable underwriter must be located and a public market must be maintained following such offering. Typically in an initial public offering, existing shareholders are not permitted to sell their Shares in the Offering, and are frequently required by the underwriter to "lock-up" their shares for a period of time thereafter. (See Section 18.2: "Lock-Up Agreement").
 

3.16 Determination Of Offering Price

The offering price for the Shareholders as noted in this document was determined arbitrarily by the Company based upon a number of factors. Such price is based primarily on the amount of funds sought from this financing and the number of Shares the Board is willing to issue in order to raise these funds. Accordingly, there is no relationship between the Offering price and the assets, earnings or book value of the Company, the market value of the Common Stock, or any other recognized criteria of value. As such, the Offering price does not necessarily indicate the current value of the Shares and should not be regarded as an indication of any future market price of the Company’s capital stock.
 

3.17 Best Efforts Offering

The Shares are offered by the Company on a "best efforts" basis. No individual, firm or corporation has agreed in advance to purchase any of the offered Shares. No assurance can be given that any or all of the Shares will be sold.
 

3.18 Dividends

The Company, at its option, may pay dividends to holders of Common Stock. However, it is not the Company’s intention at the present time to do so. (See Section 5.0: "Dividend Policy").
 

3.19 Working Capital Requirements

The Company intends to use the net proceeds of this Offering to fund ongoing working capital needs. Management will have broad discretion to determine how such proceeds will be used. (See Section 4.0: "Use of Proceeds"; and Exhibit E: "Statement of Projected Operating Cash Flow").
 

3.20 Proprietary Rights

The Company’s development of individual properties and projects could result in the creation of proprietary programming, characters, software and technology. The Company’s success will depend in part on its ability to obtain and/or enforce intellectual property protection for these assets, both in the United States and in other countries. The Company, in such circumstances, may file applications for patents, copyrights and trademarks, as Management deems appropriate. There can be no assurance that any such application, if filed, will be approved, or that the Company will have the financial and other resources to enforce its proprietary rights against infringement by others. In addition, no assurance can be given that any patent, trademark or copyright obtained by the Company will not be challenged, invalidated or circumvented. The Company’s intellectual property rights also may be further eroded given the Company’s reliance on the Internet as a primary mode of communication.

Assuming that all 2,000,000 Shares are sold, the net proceeds from the sale of the Shares are estimated to be $[--,--,--] after deducting estimated offering expenses payable by the Company. The net proceeds from the sale of the Shares will be used to fund organizational and offering expenses in connection with the continued development of the Company’s proposed project development, asset management and Internet activities:

1. The EPROD Finanancing Fund;

2. Strategic Acquisitions;

3. The EPROD Public TechFin Offerings through SEC Small Corporate Offering Registrations (SCOR/U-7s);

4. Working capital and general corporate purposes.

Pending such uses, the net proceeds will be invested in high-quality, short-term, interest bearing securities or accounts.

If at least $1,000,000 but less than $[--,--,--] worth of Shares are sold, the Company may conclude the Offering as stated above. Depending upon the actual numbers of Shares sold, the amounts set forth above may vary, subject in each case to reallocation by the Company’s Management in the best interest of the Company. In all cases, the Company’s Management will exercise fiscal caution in its use of these funds. However, if less than $[--,--,--] in Shares are sold, it would be expected that the growth of the Company may be somewhat slower than represented in the pro forma financial statements, particularly due to the fact that fewer funds would be available for capital expansion, marketing costs and working capital. 

The revenues for the Company consist of the following fee and/or profit participation income sources:

• Fee income not yet collected for completed project finance advisory work;

• Fee income for structured finance advisory work to be performed during the business transition period;

• An annual management fee consisting of one and one-half percent (1.5%) for the life of the EPROD Finanancing Fund in connection with the proposed $400 million EPROD Finanancing Fund for development of investment opportunities identified by the Company;

• Fee income generated from the EPROD Financing Fund’s banking activities in connection with the Fund;

• A 20% participation in the investment returns, once the limited investors have recouped 110% of their committed capital in connection with the EPROD Financing Fund;

• A 10% fee on all gross receipts accrued by talent under management in connection with talent management;

• Fees relating to advertising;

• Fees relating to management consulting;

• A 10% commissions of all gross revenues generated from sales of TechFin Merchandise; and

• Internet Services consisting of (i) consulting; (ii) web development (architecture, hosting, design, programming, marketing); and (iii) advertising. Fees per engagement are expected to be $10,000, $25,000 and $100,000 respectively.

In addition, income will be derived to the extent the Company is successful in establishing subsequent public and/or private Financing Funds. A more complete discussion may be found in  Exhibit D: "Statement of Projected Operating Cash Flow."

9.0 Management's Discussion and Analysis of Financial Condition And Results of Operations

9.1 General

The Company maintains its books on the accrual basis of accounting. For purposes of the statement of cash flows, cash consists of amounts on deposit with a commercial bank, available on demand. Depreciation is computed on property and equipment using straight line and accelerated methods over useful lives of five years.
 

9.3 1998 Results From Operations