EMAIL DETAILS

George R. Mesires
Partner
george.mesires@FaegreBD.com<mailto:george.mesires@FaegreBD.com> Download vCard<https://www.faegrebd.com/_vcard/george.mesires.vcf>
D: +1 312 356 5101

Faegre Baker Daniels LLP<https://www.FaegreBD.com>
311 S. Wacker Drive | Suite 4300 | Chicago, IL 60606, USA

From: Eric Schwerin <eschwerin@rosemontseneca.com>
Sent: Monday, January 28, 2019 12:07 PM
To: Mesires, George R. <george.mesires@FaegreBD.com>
Subject: Re: Next Steps

It isn’t direct expenses per se.

FINRA requires that every broker-dealer retain a certain level of capital in the bank - its “net cap". If the broker-dealer drops below 120% of that net cap we are deficient and have to file a report with the SEC and FINRA. Our CFO calculates this amount.

That said, the money that is contributed to the broker-dealer will ultimately be used for expenses. Some of it will be spent immediately and some of it will accrue towards future expenses.

The broker-dealer is currently running as leanly as possible. Current expenses include our outsourced compliance officer, outsourced CFO, rent ($1500 a month - very cheap) and Joan’s salary. Expenses include no compensation for me. In addition, we are undergoing our annual (mandated) audit currently and we will have to pay the auditors in the next month or so.

Right now, our CFO says we will need a $15,000 capital contribution by Jan 31st to avoid dropping below 120% of our required net cap. I believe we will receive a retainer payment prior to January 31st that may bring that number down to $10,000.

As I think we’ve discussed, I have personally made all our required capital contributions since September 2017 with the understanding that I would solely own the broker-dealer once Hunter and I finalized our agreement. If Hunter wants to continue to maintain ownership of the broker-dealer, he would ultimately need to pay back 75% of the money I contributed over that time and he would need to contribute 75% of the capital contribution due on January 31st and all future ones.

I am happy to personally make the capital contribution due on Jan 31st if Hunter still intends to transfer his ownership to me (in exchange for my 25% of BHR and the forgiveness of the debt due from the September 2017-December 2018 RSPI capital contributions).

Let me know if this is helpful.


On Jan 28, 2019, at 12:46 PM, Mesires, George R. <George.Mesires@FaegreBD.com<mailto:George.Mesires@FaegreBD.com>> wrote:

Eric:

Can you identify the $10-15 expenses that need to be paid?

George R. Mesires
Partner
george.mesires@FaegreBD.com<mailto:george.mesires@FaegreBD.com> Download vCard<http://www.faegrebd.com/vcard/george.mesires.vcf>
D: +1 312 356 5101<tel:+1%20312%20356%205101> | M: +1 312 972 4151<tel:+1%20312%20972%204151>

Faegre Baker Daniels LLP<http://www.faegrebd.com/>
311 S. Wacker Drive | Suite 4300 | Chicago, IL 60606, USA<x-apple-data-detectors://10/1>

On Jan 25, 2019, at 10:18 AM, Eric Schwerin <eschwerin@rosemontseneca.com<mailto:eschwerin@rosemontseneca.com>> wrote:
George,

While I know you understand the timeline I thought it might be helpful to suggest two options forward.

I need to make a $10-15,000 capital contribution to RSPI (the broker-dealer) before January 31st. In actuality it needs to be executed 24-48 hours prior to January 31st to make sure the money can be moved in time.

1) If I can get agreement that Hunter still intends to transfer RSPI to me effective December 31, 2018, I will go ahead and make that contribution directly from Aqaba. We can discuss what form that agreement is in. I would be comfortable with communication from you.

2) If I can’t, and since the capital contribution is owed by the parent, Skaneateles, the capital contribution should come out of the $21K+ Eudora check that was sent to us earlier in the month.

Let me know your thinking on this but this seems like the least complicated way to handle this.

Thanks,

Eric


Eric D. Schwerin
2550 M Street NW
Washington, DC 20037
(202) 333-5196
eschwerin@rosemontseneca.com<x-msg://59/eschwerin@obblaw.com>
P Consider the environment before printing this email.

WE’VE MOVED: PLEASE NOTE OUR NEW ADDRESS ABOVE


Eric D. Schwerin
2550 M Street NW
Washington, DC 20037
(202) 333-5196
eschwerin@rosemontseneca.com<x-msg://59/eschwerin@obblaw.com>
P Consider the environment before printing this email.

WE’VE MOVED: PLEASE NOTE OUR NEW ADDRESS ABOVE