United States securities and exchange commission logo
May 2, 2022
Virginia C. Herring
Chief Executive Officer
1st Franklin Financial Corporation
135 East Tugalo Street
Toccoa, GA 30577
Re: 1st Franklin
Financial Corporation
Post-Effective
Amendment No. 2 to
Registration
Statement on Form S-1
Filed April 15,
2022
Dear Ms. Herring:
We have reviewed your post-effective amendment and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Post-Effective Amendment No. 2 to Registration Statement on Form S-1
General
1. We note that you intend
to change the interest rates at the end of each interest adjustment
period for the
Debentures you are offering. The interest rates are material terms of the
Debentures thus changes
appear to represent the offer and sale of a new security given the
new investment decision
that will be made in connection with each interest rate
adjustment.
Accordingly, it appears that you will be conducting an exchange in which
Debentures with the new
interest rate will be exchanged for the Debentures with the old
interest rate. Please
tell us how you will conduct each exchange in compliance with
Section 5 of the
Securities Act.
2. You state that a
prospectus supplement setting forth the most recently determined interest
rates will be filed
with the SEC "as appropriate." It is not clear that filing a prospectus
Virginia C. Herring
1st Franklin Financial Corporation
May 2, 2022
Page 2
supplement will appropriately update the registration statement and
prospectus for
purposes of the federal securities laws. Specifically, how this
complies with Rule 409
under the Securities Act or establishes a new effective date for the
registration statement
for liability purposes. In this regard, we note that you are not
eligible to rely on Rule
430B or Rule 430C. Please provide your detailed legal analysis
explaining how the filing
of the prospectus supplement satisfies the federal securities laws,
including why you are
not required to file a post-effective amendment in connection with
each interest rate
adjustment.
3. Please tell us how you intend to comply with the Trust Indenture Act
of 1939 in regards to
each interest rate adjustment. Explain whether you intend to enter
into new indentures in
connection with each adjustment that would require qualification under
the Trust
Indenture Act. If not, explain how future adjustments will be
implemented under the
qualified indenture and how you will communicate these to note
holders.
Please contact Sonia Bednarowski at 202-551-3666 or J. Nolan McWilliams,
Acting
Legal Branch Chief, at 202-551-3217 with any questions.
FirstName LastNameVirginia C. Herring Sincerely,
Comapany Name1st Franklin Financial Corporation
Division of
Corporation Finance
May 2, 2022 Page 2 Office of Finance
FirstName LastName