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Method of Receiving Stock, Donating it, and Receiving Fair Market Valuation for Same

United States Patent Application

Chris Ryan

December 6, 2010

Charities today due to the economy are suffering what has been termed “donor fatigue” and the need
for charities to increase operational efficiency is a critical component for survival. One way charities
can increase donor contributions is by offering contributors additional value added services to their
donors and property that they donate.

Most contributors to a charitable cause are doing so for the tax deduction of the property contributed.
In light of this the IRS, has passed several Internal Revenue Codes (IRC) to establish procedures and
policy to the valuation and acceptance of collateral. These codes require the contributor to procure
valuation opinions for property donated, which places both risk and burden upon the donor. This
translates into property and assets not being donated to the charity.

Method of receiving stock, donating it and receiving a fair market valuation for same is a system which
generates a multi pronged analysis of the contribution scenario. It consists of analysis of: the stock to be
contributed; the donation; the charity; and the individual or entity donating the property. Last the
analysis generates a certificate of donation for the donor from the charity with all legal opinions and
valuation analysis support behind it. This is all done to create a simultaneous turnkey donation
environment, for the benefit of the Charity leveraging service and timing.

CLAIMS

1. A method in support of a Charity having investors who purchased Single Stock Futures
Contract(s) to take delivery of the underlying securities.
2. A method showing and supporting the valuation of the shares in support of a Charity having
investors who purchased Single Stock Futures Contract(s) to take delivery of the underlying
securities.
3. A method of delivering to Investors who take delivery of shares underlying Single Stock
Futures Contract, that the shares are unrestricted under rule 144.
4. A method showing and supporting the valuation of donated shares by an Investor who takes
delivery of the shares underlying a single stock futures contract.
5. A method of delivering to Investors who take delivery of shares underlying Single Stock
Futures Contract, an expert opinion that the shares donated to a particular Charity will
receive a certain percentage of tax deduction from income taxes.
6. A method upon receipt of payment for delivery to simultaneously issuing the shares to
recipient who takes delivery of the shares underlying the Single Stock Futures Contract.
7. A method in support of a Charity of simultaneously issuing a receipt of shares from Donor.
8. A method in support of a Charity of simultaneously issuing a valuation opinion to Donor who
donates shares from the delivery of shares underlying the Single Stock Futures Contract.
9. A method is support of the Charity to issue to donor an expert analysis and opinion of the
charities standing with the state registered in, and IRS status.
10. A method is support of the Charity to issue to donor an expert analysis and opinion that the
Charity structure will afford a certain percentage deduction to donor.
11. A method of executing 1-10 above in a simultaneous manner.

DESCRIPTION
CROSS-REFERENCE TO RELATED APPLICATIONS

[0001] The present application claims no priority from any previously filed provisional applications for
the benefit of the earlier filing dates of which is hereby claimed under 35 U.S.C. .sctn. 119(e), and each
of which are further incorporated by reference.

FIELD OF INVENTION

[0002] This invention relates to a Charity non-profit method of raising capital by having purchasers who
has purchased from Charity a Single Stock Futures Contract (SSFC), (representing the right of purchaser
to take delivery of the shares underlying the SSFC sometime in the future) in paying the Charity the
future cost of taking delivery of the shares underlying the SSFC. It is a system which creates a
mechanism whereby the Charity can execute delivery of the shares underlying a Single Stock Futures
Contract, by giving the purchaser an opportunity to capture a simultaneous value arbitrage, by receiving
the shares and simultaneously donating them to a 501(c)(3). The value created in this arbitrage scenario
can by this invention be simultaneously demonstrated and supported with third party expert opinions,
which can lead to the Charity giving the Donor an instant Certificate of Donation or Receipt of Donation
(representing shares delivered and donated under the SSFC) with valuation of donation with support
documentation attached. This instant Certificate of Donation/receipt allows donor the option of locking
in the value created under the donation and receiving the fair market valuation of the stock donated
under Internal Revenue Code (IRC) 1234(b) thus allowing donor an option of locking in value and
mitigating the market risk of selling acquired shares in the open market.

BACKGROUND OF THE INVENTION

[0003] Charities registered under section 501(c)(3) (Charity) are allowed to issue shares via an
exemption from Securities and Exchange Commission registration. One type of security a Charity can
issue is an instrument created by the Commodity Modernization Act known as a Single Stock Future
Contract (SSFC). This combination creates an opportunity for a Charity to be the recipient of
donated/gifted shares (public/non-public companies) and to distribute them to prospective purchasers
via the issuance of the issue specific SSFC, representing a contract to give the purchaser(s) the right to
take delivery of the securities underlying the SSFC in the future. This SSFC sale allows a Charity to receive
immediate premium income while affording it the ability of receiving additional income representing the
delivery of said shares underlying the SSFC to purchasers who decide to take delivery. In order for
purchasers to take delivery a clear communication of value and receipt of same must be provided in a
seamless simultaneous environment which this inventions mechanism creates. In order to understand
the background of the invention, current business practices are presented below, followed by legal
frameworks, structures and tools available to conduct business transactions under U.S. law.

[0004] Current Business Practices

[0005] IRG- Irrevocable Registration Guarantee- A instrument offered by a law firm, confirming to
company that it will have a calss of securities registered under section12(g) of the 1934 Act.

[0006] EXSO- exempt securities legal opinion- otherwise known as a rule 144 legal opinion is a legal
opinion issued to a purchaser of a stock that the shares acquired are available for exemption under Code
of Federal Regulations title 17.230.144. Rule 144- Rule 144, promulgated by the SEC under the 1933 Act,
permits, under limited circumstances, the sale of restricted and controlled securities without
registration. In addition to restrictions on the minimum length of time for which such securities must be
held and the maximum volume permitted to be sold, the issuer must agree to the sale. If certain
requirements are met, Form 144 must be filed with the SEC. Often, the issuer requires that a legal
opinion be given indicating that the resale complies with the rule. The amount of securities sold during
any subsequent 3-month period generally does not exceed any of the following limitations:

 1% of the stock outstanding


 The avg weekly reported volume of trading in the securities on all national securities exchanges
for the preceding 4 weeks
 The avg weekly volume of trading of the securities reported through the consolidated
transactions reporting system (NASDAQ)

Notice of resale is provided to the SEC if the amount of securities sold in reliance on Rule 144 in any 3-
month period exceeds 5,000 shares or if they have an aggregate sales price in excess of $50,000. After
one year, Rule 144(k) allows for the permanent removal of the restriction except as to 'insiders'.

In cases of mergers, buyouts or takeovers, owners of securities who had previously filed Form 144 and
still wish to sell restricted and controlled securities must refile Form 144 once the merger, buyout or
takeover has been completed.

[0007] CMA-Commodity Modernization Act- is United States federal legislation that clarified most over-
the-counter derivatives (“OTC derivatives”) transactions between “sophisticated parties” would not be
regulated as “futures” under the Commodity Exchange Act (CEA) or as “securities” under the federal
securities laws. Instead, the major dealers of those products (banks and securities firms) would continue
to have their dealings in OTC derivatives supervised by their federal regulators under general “safety
and soundness” standards. “Functional regulation” of derivatives products by the Commodity Futures
Trading Commission (CFTC) was rejected for continued “entity-based supervision of OTC derivatives
dealers.

[0008] SRL- Shareholder Representation Letter- A letter from purchasers of stock seeking a rule 144
opinion, pertaining to how the shares were acquired, date and affiliation to the issuer.
[0009] CAO- Charity Analysis Opinion- An analysis of a 501(c)(3) status for qualification and percentage
of deduction eligible for concerning donated property.

[0010] FMVO- Fair Market Value Opinion- An opinion based on the value of a donation that can be
claimed, Qualified Holders of SSFC under IRC 1256 will be entitled to ‘tack’ the holding period of the
SSFC onto the holding period of the Capital Stock received pursuant to the terms and provisions of the
SSFC, which qualifies as “capital gain property” within the meaning of IRC §170(b)(1)(C)(iv) to be
entitled to treat the gains or losses realized upon the subsequent sale of the SSFC Capital Stock as ‘long-
term’ capital gain or loss, and the value of the Charitable Deduction for a donation of the SSFC Capital
Stock as “qualified appreciated stock” within the meaning of IRC §170(e)(5)(B), which entitles the SSFC
purchaser (the Holder) to deduct on a 1040 tax return or an 1120 tax return the “market value”
determined by the market quotations published on the date of the donation or contribution to a
charitable or other organization qualified to receive tax deductible donations under IRC §170(c)(2),
rather than the Holder’s ‘purchase price’ in the SSFC Capital Stock, provided only that the Holder (and
his family as defined in IRC §267(c)(4), above) do not attempt to contribute more than the 10% of the
entire outstanding shares of Capital Stock in the corporation to the charitable or other qualified
organization, contrary to the provisions of IRC §170(e)(5)(C) above.

[0011] ATI- Anticipated Taxable Income- Donor’s estimated taxable income for the coming year.

[0012] TSTB- Transmittal Summary of Tax Benefit-A summary sheet issued from the 501(c)(3) to the
Donor prior to the donation which is an estimate of the value the Donor would be able to deduct from
perosnla taxable income from the an anticipated donation.

[0013] CDO- Certificate of Donation- A receipt issued from the 501(c)(3) to the Donor acknowledging
date of transfer and collateral donated.

[0014] SC- Stock Certificate- A physical certificate representing common stock ownership in certain
company.

[0015] Single Stock Futures Contracts-(SSFC) Became effective on November 2, 2002 after passage
Commodity Futures Modernization Act of 2000. They Are futures contracts which with the underlying
asset being one particular stock. When purchased, no transmission of share rights or dividends occurs.
Being futures contracts they are traded on margin, thus offering leverage, and they are also considered
an “asset class under Internal Revenue Code 1234(b) for purposes of tacking to determine holding
period to recognize long term capital gains and fair market valuation vs. cost basis as defined under IRC
561.

[0016] Common Stock-is a form of corporate equity ownership, a type of security It is called "common"
to distinguish it from preferred.

[0017] Internal Revenue Code

[0018] IRC 1234(b) Defines a “securities futures contract” as: “(c) Securities futures contract -- For
purposes of this section, the term ‘securities futures contract’ means any security future (as defined in
§3(a)(55)(A) of the Securities Exchange Act of 1934, as in effect on the date of the enactment of this
section). The Secretary may prescribe regulations regarding the status of contracts the values of which
are determined directly or indirectly by reference to any index which becomes (or ceases to be) a
narrowbased security index (as defined for purposes of §1256(g)(6)).” According to the summary of
legislative history notes following IRC §1234B, the section was: “Added {by} Pub. L. 106-554, Sec. 1(a)(7)
[title IV, Sec. 401(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-648;
{and} amended {by} Pub. L. 107-147, title IV, Sec. 412(d)(1)(B), (3)(B), Mar. 9, 2002, 116 Stat. 53, 54; Pub.
L. 108- 311, title IV, Sec. 405(a)(1), Oct. 4, 2004, 118 Stat. 1188.)” -- (Note that “[ ]” appear in the
original; and “{ }” are used to show additions/insertions to the text of the Legislative History Note to 26
USC §1234B.) And, §3 (a)(55) thru (57) were added to the Securities Exchange Act of 1934 by P.L. 106-
544, enacted Dec. 21, 2000, which also enacted IRC §1234B.

In its entirety, 26 USC §1234B reads: “Gains or losses from securities futures contracts – (a) Treatment
of gain or loss – (1) In general -- Gain or loss attributable to the sale, exchange, or termination of a
securities futures contract shall be considered gain or loss from the sale or exchange of property which
has the same character as the property to which the contract relates has in the hands of the taxpayer
(or would have in the hands of the taxpayer if acquired by the taxpayer). (2) Nonapplication of
subsection -- This subsection shall not apply to – (A) a contract which constitutes property described in
paragraph (1) or (7) of §1221(a), and (B) any income derived in connection with a contract which,
without regard to this subsection, is treated as other than gain from the sale or exchange of a capital
asset. (b) Short-term gains and losses -- Except as provided in the regulations under section 1092(b) or
this section, or in §1233, if gain or loss on the sale, exchange, or termination of a securities futures
contract to sell property is considered as gain or loss from the sale or exchange of a capital asset, such
gain or loss shall be treated as short-term capital gain or loss. (c) Securities futures contract -- For
purposes of this section, the term ‘securities futures contract’ means any security future (as defined in
§3(a)(55)(A) of the Securities Exchange Act of 1934, as in effect on the date of the enactment of this
section). The Secretary may prescribe regulations regarding the status of contracts the values of which
are determined directly or indirectly by reference to any index which becomes (or ceases to be) a
narrowbased security index (as defined for purposes of §1256(g)(6)). (d) Contracts not treated as
commodity futures contracts -- For purposes of this title, a securities futures contract shall not be
treated as a commodity futures contract. (e) Regulations -- The Secretary shall prescribe such
regulations as may be appropriate to provide for the proper treatment of securities futures contracts
under this title. (f) Cross reference -- For special rules relating to dealer securities futures contracts, see
§1256.” 9 Note that §3(a)(55)(A) of the Securities Exchange Act of 1934 was enacted on the same date
as IRC §1234B

[0019] IRC 1223(4) -Provides that: “(14) If the security to which a securities futures contract (as defined
in §1234B ) relates (other than a contract to which §1256 applies ) is acquired in satisfaction of such
contract, in determining the period for which the taxpayer has held such security, there shall be
included the period for which the taxpayer held such contract if such contract was a capital asset in the
hands of the taxpayer.”

The contract is not one to which IRC §1256 applies, because the last sentence of IRC §1256(b) limits the
definition of a “§1256 contract” so as to “not include any securities futures contract … unless such
contract … is a dealer securities futures contract.” The term “dealer securities futures contract” is
limited by IRC §1256(g)(9)(A) to contracts which are “entered into” or “purchased or granted” “by [a]
dealer … in the normal course of [the dealer’s] activity of dealing in such contracts” which are “traded
on a qualified board or exchange”, and by IRC §1256(g)(9)(B) to a “person [who] performs … functions
similar to the functions performed by [options dealers] described in paragraph (8)(A).” And, the
“options dealer” described in IRC §1256 (g)(8)(A) is clearly limited to a “person registered with [a]
national securities exchange as a market maker or specialist”, who has the obligation to make a market
in one or more designated securities on a regular and continuous basis, under the provisions of the
Securities Exchange Act of 1934, compiled in 15 USC §78c at 15 USC §78c (a)(38).

[0020] IRS Publication 561 –Determination of Fair Market Value Stocks and Bonds-
http://www.irs.gov/publications/p561/ar02.html#d0e216

Selling prices on valuation date. If there is an active market for the contributed stocks or bonds on a
stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the
average price between the highest and lowest quoted selling prices on the valuation date. For example,
if the highest selling price for a share was $11, and the lowest $9, the average price is $10. You get the
average price by adding $11 and $9 and dividing the sum by 2.

No sales on valuation date. If there were no sales on the valuation date, but there were sales within a
reasonable period before and after the valuation date, you determine FMV by taking the average price
between the highest and lowest sales prices on the nearest date before and on the nearest date after
the valuation date. Then you weight these averages in inverse order by the respective number of trading
days between the selling dates and the valuation date.
Example. On the day you gave stock to a qualified organization, there were no sales of the stock. Sales
of the stock nearest the valuation date took place two trading days before the valuation date at an
average selling price of $10 and three trading days after the valuation date at an average selling price of
$15. The FMV on the valuation date was $12, figured as follows:

[(3 x $10) + (2 x $15)] ÷ 5 = $12

Listings on more than one stock exchange. Stocks or bonds listed on more than one stock exchange
are valued based on the prices of the exchange on which they are principally dealt. This applies if these
prices are published in a generally available listing or publication of general circulation. If this is not
applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a
publication of general circulation, use the composite list. See also Unavailable prices or closely held
corporation, later.

Bid and asked prices on valuation date. If there were no sales within a reasonable period before and
after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the
valuation date.

Example.

Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked
prices were available on that date of $14 and $16, respectively. The FMV is $15, the average price
between the bid and asked prices.

No prices on valuation date. If there were no prices available on the valuation date, you determine
FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date
before and after the valuation date. Both dates must be within a reasonable period. Then you weight
these averages in inverse order by the respective number of trading days between the bid and asked
dates and the valuation date.

Example.

On the day you gave stock to a qualified organization, no prices were available. Bona fide bid and asked
prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. The FMV
on the valuation date is $13, figured as follows:

[(2 x $10) + (3 x $15)] ÷ 5 = $13

Prices only before or after valuation date, but not both. If no selling prices or bona fide bid and asked
prices are available on a date within a reasonable period before the valuation date, but are available on
a date within a reasonable period after the valuation date, or vice versa, then the average price between
the highest and lowest of such available prices may be treated as the value.

Large blocks of stock. When a large block of stock is put on the market, it may lower the selling price of
the stock if the supply is greater than the demand. On the other hand, market forces may exist that will
afford higher prices for large blocks of stock. Because of the many factors to be considered, determining
the value of large blocks of stock usually requires the help of experts specializing in underwriting large
quantities of securities, or in trading in the securities of the industry of which the particular company is a
part.

Unavailable prices or closely held corporation. If selling prices or bid and asked prices are not
available, or if securities of a closely held corporation are involved, determine the FMV by considering
the following factors.

 For bonds, the soundness of the security, the interest yield, the date of maturity, and other
relevant factors.
 For shares of stock, the company's net worth, prospective earning power and dividend-paying
capacity, and other relevant factors.

Other factors. Other relevant factors include:

 The nature and history of the business, especially its recent history,
 The goodwill of the business,
 The economic outlook in the particular industry,
 The company's position in the industry, its competitors, and its management, and
 The value of securities of corporations engaged in the same or similar business.

For preferred stock, the most important factors are its yield, dividend coverage, and protection of its
liquidation preference. You should keep complete financial and other information on which the
valuation is based. This includes copies of reports of examinations of the company made by
accountants, engineers, or any technical experts on or close to the valuation date. Restricted securities.
Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and
Exchange Commission, or by the corporate charter or a trust agreement. These restricted securities
usually trade at a discount in relation to freely traded securities. To arrive at the FMV of restricted
securities, factors that you must consider include the resale provisions found in the restriction
agreements, the relative negotiating strengths of the buyer and seller, and the market experience of
freely traded securities of the same class as the restricted securities.

[0021] IRS Form 8283- Generally, if the claimed deduction for an item or group of similar items of
donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser,
and you must attach Section B of Form 8283 to your tax return. There are exceptions, discussed later.
You should keep the appraiser's report with your written records. Records are discussed in Publication
526.

The phrase “similar items” means property of the same generic category or type (whether or not
donated to the same donee), such as stamp collections, coin collections, lithographs, paintings,
photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly
traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances,
toys, everyday kitchenware, china, crystal, or silver. For example, if you give books to three schools and
you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for
these books. You must get a qualified appraisal of the books and for each school you must attach a fully
completed Form 8283, Section B, to your tax return.

Exceptions. You do not need an appraisal if the property is:

 Nonpublicly traded stock of $10,000 or less,


 A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross
proceeds from its sale,
 Qualified intellectual property, such as a patent,
 Certain publicly traded securities described next,
 Inventory and other property donated by a corporation that are “qualified contributions” for the
care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal
Revenue Code, or
 Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course
of your trade or business.

Although an appraisal is not required for the types of property just listed, you must provide certain
information about a donation of any of these types of property on Form 8283.
Publicly traded securities. Even if your claimed deduction is more than $5,000, neither a qualified
appraisal nor Section B of Form 8283 is required for publicly traded securities that are:

 Listed on a stock exchange in which quotations are published on a daily basis,


 Regularly traded in a national or regional over-the-counter market for which published
quotations are available, or
 Shares of an open-end investment company (mutual fund) for which quotations are published
on a daily basis in a newspaper of general circulation throughout the United States.

Publicly traded securities that meet these requirements must be reported on Form 8283, Section A.
A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for
an issue of a security that does not meet the requirements just listed but does meet these
requirements:
1. The issue is regularly traded during the computation period (defined later) in a market for which
there is an “interdealer quotation system” (defined later),
2. The issuer or agent computes the “average trading price” (defined later) for the same issue for
the computation period,
3. The average trading price and total volume of the issue during the computation period are
published in a newspaper of general circulation throughout the United States, not later than the
last day of the month following the end of the calendar quarter in which the computation period
ends,
4. The issuer or agent keeps books and records that list for each transaction during the
computation period the date of settlement of the transaction, the name and address of the
broker or dealer making the market in which the transaction occurred, and the trading price and
volume, and
5. The issuer or agent permits the Internal Revenue Service to review the books and records
described in item (4) with respect to transactions during the computation period upon receiving
reasonable notice.

An interdealer quotation system is any system of general circulation to brokers and dealers that
regularly disseminates quotations of obligations by two or more identified brokers or dealers who are
not related to either the issuer or agent who computes the average trading price of the security. A
quotation sheet prepared and distributed by a broker or dealer in the regular course of business and
containing only quotations of that broker or dealer is not an interdealer quotation system.

The average trading price is the average price of all transactions (weighted by volume), other than
original issue or redemption transactions, conducted through a United States office of a broker or dealer
who maintains a market in the issue of the security during the computation period. Bid and asked
quotations are not taken into account.

The computation period is weekly during October through December and monthly during January
through September. The weekly computation periods during October through December begin with the
first Monday in October and end with the first Sunday following the last Monday in December.
Nonpublicly traded stock. If you contribute nonpublicly traded stock, for which you claim a deduction
of $10,000 or less, a qualified appraisal is not required. However, you must attach Form 8283 to your tax
return, with Section B, Parts I and IV, completed.

[0022] Securities and Exchange Commission- The U.S. Securities and Exchange Commission (frequently
abbreviated SEC) is a federal agency which holds primary responsibility for enforcing the federal
securities laws and regulating the securities industry, the nation's stock and options exchanges, and
other electronic securities markets in the United States. In addition to the 1934 Act that created it, the
SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of
1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statutes. The SEC
was created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d and
commonly referred to as the 1934 Act).

[
[0023] Rule 144- Rule 144- Rule 144, promulgated by the SEC under the 1933 Act, permits, under
limited circumstances, the sale of restricted and controlled securities without registration. In addition to
restrictions on the minimum length of time for which such securities must be held and the maximum
volume permitted to be sold, the issuer must agree to the sale. If certain requirements are met, Form
144 must be filed with the SEC. Often, the issuer requires that a legal opinion be given indicating that
the resale complies with the rule. The amount of securities sold during any subsequent 3-month period
generally does not exceed any of the following limitations:

 1% of the stock outstanding


 The avg weekly reported volume of trading in the securities on all national securities exchanges
for the preceding 4 weeks
 The avg weekly volume of trading of the securities reported through the consolidated
transactions reporting system (NASDAQ)

[0024] Commodity Modernization Act- is United States federal legislation that clarified most over-the-
counter derivatives (“OTC derivatives”) transactions between “sophisticated parties” would not be
regulated as “futures” under the Commodity Exchange Act (CEA) or as “securities” under the federal
securities laws. Instead, the major dealers of those products (banks and securities firms) would continue
to have their dealings in OTC derivatives supervised by their federal regulators under general “safety
and soundness” standards. “Functional regulation” of derivatives products by the Commodity Futures
Trading Commission (CFTC) was rejected for continued “entity-based supervision of OTC derivatives
dealers.

[0025] European Clearing Structure- European Clearing Structure- An option that can only be exercised
at the end of its life, at its maturity.

[0026] Non Profit 501(c)(3) is an American tax-exempt, nonprofit corporation or association. Section
501(c) of the United States Internal Revenue Code (26 U.S.C.§ 501(c))

DETAILED DESCRIPTION OF CERTAIN EMBODIMENTS

[0026] The present invention is described more fully hereinafter with reference to specific illustrative
embodiments. This invention may, however, be embodied in many different forms and should not be
construed as limited to the embodiments set forth herein; rather, these embodiments are provided so
that this disclosure will be thorough and complete, and will fully convey the scope of the invention to
those skilled in the art. The methods may involve one or more entities (including a person, business,
non-profit, computer device, or the like) performing some or all parts of an action, or set of actions. The
entities may communicate in-person, over a network, including a computer network, or the like. The
following detailed description is, therefore, not to be taken in a limiting sense.

[0027] Throughout the specification and claims, the following terms take the meanings explicitly
associated herein, unless the context clearly dictates otherwise. The phrase "in one embodiment" as
used herein does not necessarily refer to the same embodiment, though it may. Furthermore, the
phrases "in another embodiment" or "in an alternate embodiment" as used herein does not necessarily
refer to a different embodiment, although it may. Thus, as described below, various embodiments of the
invention may be readily combined, without departing from the scope or spirit of the invention.

[0028] In addition, as used herein, the term "based on" is not exclusive and allows for being based on
additional factors not described, unless the context clearly dictates otherwise. In addition, throughout
the specification, the meaning of "a," "an," and "the" include plural references. The meaning of "in"
includes "in" and "on."

[0029] As used herein, the term "decision maker" refers to a director, an officer, an employee, a
committee, a partner, a general partner, a manager, a member, a trustee, trustee in bankruptcy, agent,
attorney-in-fact, advisor, singly or in any combination, who or which is in a position to make decisions
for or on behalf of a business or affecting a business.

[0030] The term "asset" means an item of property in which the business owns or holds an ownership
interest or beneficial interest, directly or indirectly, and encompasses all forms and varieties of assets,
including without limitation, partial interests, undivided interests, jointly held interests, co-tenancy
interests, stock, equity interests, tangibles, real estate, personality, as well as intangibles of every variety
and description, including without limitation goodwill, paper, interests in litigation, records, intellectual
property, and investment interests.

[0031] The terms "stock" and "equity" refer to any type of equity ownership in a business, including
preferred stock, common stock, LLC units, partnership units, or the like.

[0032] In accordance with one aspect of the invention, a method to support a charity in receiving stock
as a donation and giving a receipt of same, supports the fundraising charities and other 501(c)(3)
institutions. The method includes the step of proceeding with the business objective in response to a
decision by a decision maker by performing the following steps.

[0033] SSFC is a a Single Stock Futures Contract, a financial instrument created under the Commodity
Modernization Act of 2001.

[0034] EXSO is an exempt securities legal opinion issued by a law firm who provides opinions to the
Securities and Exchange Commission, tha the securities underlying the exercise of the SSFC’s are exempt
from registration under Rule 144.

[0035] SRL is a shareholder representation letter given by the entity procuring EXSO to the law firm.

[0036] CAO is a Charity Analysis Opinion, procured by the 501(c)(3) institution receiving the donation,
providing a third party expert opinion that the charity is on good standing and is classified as either a
public charity, private charity or foundation for determination of percentage of the deduction a donor
can expect to receive as a percentage of the value donated.
[0037] FMVO is a fair market valuation opinion issued by a third party expert to the donor representing
the value of the donation given to the indentified 501(c)(3).

[0038] ATI is anticipated taxable income bracket of the donor

[0039] TSTB is a transmittal summary of tax benefits which is issued to the donor from the 501(c)(3)
which received the donation.

[0040] Donor is the owner of a Single Stock Futures Contract (SSFC), which gives owner the right to take
delivery of a certain number of securities at a predetermined price on certain date in the future.

[0041] Donor wishes to exercise and take delivery of the shares represented under the SSFC and donate
them (part or whole) to a non-profit 501(c)(3) corporation (NPC).

[0042] Prior to exercise of the SSFC contract, delivery of the securities and donation of acquired shares
(part or whole) to NPC, the Donor wants to know what value his/her donation will be income tax
purposes.

[0043] NPC being the anticipated beneficiary of donation (whole or part) undertakes to deliver to Donor
a Certificate of Donation (COD) - representing the exercise of the SSFC, delivery of shares and fair
market valuation of donation on day donation was made. The (COD) is comprised of: Receipt of the
Delivery of Shares from Donor; Legal Opinion of Unrestricted Status of Acquired Shares Under the SSFC
(Diagram 1); Charity Analysis Opinion (Diagram 2);and Fair Market Valuation Opinion of Donation (
Diagram 3).

[0044] The combination of 5 A through D together creates a mechanism to support the exercise of the
SSFC and donation of the delivered shares to the charity. This mechanism creates a scenario where the
Donor can realize that the tax advantage of exercise of the SSFC combined with simultaneous delivery
and donation to NPC of securities acquired would be greater in certain circumstances then the delivery
price of taking possession of acquired shares via the SSFC (Diagram 4).

[0045] NPC initiates COD by obtaining an Exempt Securities Legal Opinion (EXSO) that the Securities
delivered under the SSFC are exempt from restriction as per rule 144.

[0046] To support [0045] above NPC procures from shareholder a signed representation letter,
identifying when consideration and possession of the SSFC took place, amount of shares to be
delivered/exercised and confirmation that Donor is not management, affiliate or control person of
shares to be donated.(Diagram 1.1).

[0047] NPC takes possession of signed Shareholder representation letter and procures legal review of
necessary Transactional Documents (Diagram 1.2).

[0048] Upon conditions and representations made by shareholder being truthful an EXSO is generated
with attached signed Shareholder representation as exhibit.
[0049] If EXSO is procured then NPC attaches recent Charity Analysis Opinion (CAO) which identifies
whether targeted beneficiary Charity is in good standing with the State, IRS and what type of and how
much as a percentage of donation would be qualified for deduction purposes (Diagram 2.1).

[0050] Upon EXSO and CAO being acceptable, NPC then procures a Fair Market Valuation Opinion
(FMVO) of the targeted donation (Diagram 3).

[0051] NPC procures from Donor their Anticipated Taxable Income (ATI) and Anticipated Taxable Income
Bracket (ATIB).

[0052] NPC then generates a Transmittal Summary of Tax Benefits (TSTB) of Exercise and Donation

[0053] NPC approaches Donor with TSTB

[0054] Upon Donor agreeing to exercise SSFC and takes delivery of Securities.

[0055] NPC Simultaneously issues a Stock Certificate (SC) to Donor representing the shares acquired via
the exercise of the SSFC.

[0056] Donor endorses SC to NPC.

[0057] NPC issues simultaneously to Donor, EXSO, CAO, and FMVO concerning the shares donated.

[0058] NPC issues simultaneously to Donor date stamped receipt of Donation.

[0059] NPC issues simultaneously to Donor a Certificate of Donation, which encompasses the FMVO
valuation of stock, and date stamped receipt of Donation.

DESCRIPTION OF THE DRAWINGS

[0060] Non-limiting and non-exhaustive embodiments of the present invention are described with
reference to the accompanying drawings. In the drawings, like reference numerals refer to like parts
throughout the various figures unless otherwise specified.

[0061] Diagram 1 illustrates process the present invention can operate in providing the securities
donated are exempt from registration under CFR Title 17.230.144.

[0062] Diagram 1.1 illustrates process the present invention can operate in obtaining the correct
shareholder representations needed in order to obtain an exempt securities opinion;

[0063] Diagram 1.2 illustrates process the present invention can operate in obtaining the correct
transactional due diligence in order to obtain an exempt securities opinion;

[0064] Diagram 2 illustrates a process the present invention can operate in obtaining a Charity (501
(c)(3) ) Analysis Opinion;
[0065] Diagram 2.1 illustrates a processes the present invention evaluates in obtaining a Charity (501
(c)(3) ) Analysis Opinion;

[0066] Diagram 3 illustrates a processes the present invention can operate in obtaining Fair Market
Valuation Opinion for the Donor, in relation to the securities donated to Charity (501 (c)(3).

[0067] The present invention is described more fully hereinafter with reference to specific illustrative
embodiments. This invention may, however, be embodied in many different forms and should not be
construed as limited to the embodiments set forth herein; rather, these embodiments are provided so
that this disclosure will be thorough and complete, and will fully convey the scope of the invention to
those skilled in the art. The methods may involve one or more entities (including a person, business,
non-profit, computer device, or the like) performing some or all parts of an action, or set of actions. The
entities may communicate in-person, over a network, including a computer network, or the like. The
following detailed description is, therefore, not to be taken in a limiting sense.

[0068] Throughout the specification and claims, the following terms take the meanings explicitly
associated herein, unless the context clearly dictates otherwise. The phrase "in one embodiment" as
used herein does not necessarily refer to the same embodiment, though it may. Furthermore, the
phrases "in another embodiment" or "in an alternate embodiment" as used herein does not necessarily
refer to a different embodiment, although it may. Thus, as described below, various embodiments of the
invention may be readily combined, without departing from the scope or spirit of the invention.

[0069] In addition, as used herein, the term "based on" is not exclusive and allows for being based on
additional factors not described, unless the context clearly dictates otherwise. In addition, throughout
the specification, the meaning of "a," "an," and "the" include plural references. The meaning of "in"
includes "in" and "on."

[0070] As used herein, the term "decision maker" refers to a director, an officer, an employee, a
committee, a partner, a general partner, a manager, a member, a trustee, trustee in bankruptcy, agent,
attorney-in-fact, advisor, singly or in any combination, who or which is in a position to make decisions
for or on behalf of a business or affecting a business.

[0071] The term "asset" means an item of property in which the business owns or holds an ownership
interest or beneficial interest, directly or indirectly, and encompasses all forms and varieties of assets,
including without limitation, partial interests, undivided interests, jointly held interests, co-tenancy
interests, stock, equity interests, tangibles, real estate, personality, as well as intangibles of every variety
and description, including without limitation goodwill, paper, interests in litigation, records, intellectual
property, and investment interests.

[0072] The terms "stock" and "equity" refer to any type of equity ownership in a business, including
preferred stock, common stock, LLC units, partnership units, or the like.
[0073] It will be understood that the steps of the flowchart illustrations described herein can be
performed in different orders and some steps may be omitted, without departing from the spirit of the
invention.

[0074] It will also be understood that certain steps in the flowchart illustrations, and combinations of
steps in the flowchart illustrations, can be implemented by computer program instructions. These
program instructions can be provided to a processor to produce a machine, such that the instructions,
which execute on the processor, create means for implementing the actions specified in the flowchart
step or steps. The computer program instructions can be executed by a processor to cause a series of
operational steps to be performed by the processor to produce a computer implemented process such
that the instructions, which execute on the processor to provide steps for implementing the actions
specified in the flowchart step or steps. The computer program instructions can also cause at least some
of the operational steps shown in the steps of the flowchart to be performed in parallel. Moreover,
some of the steps may also be performed across more than one processor, such as might arise in a
multi-processor computer system.

[0075] Accordingly, steps of the flowchart illustrations support combinations of means for performing
the specified actions, combinations of steps for performing the specified actions and program
instruction means for performing the specified actions. It will also be understood that each step of the
flowchart illustrations, and combinations of steps in the flowchart illustrations, can be implemented by
special purpose hardware-based systems which perform the specified actions or steps, or combinations
of special purpose hardware and computer instructions. Further, it should be understood that aspects of
any particular embodiment can be combined with features and aspects of other embodiments in
practicing the present invention.

[0069] Since many embodiments of the invention can be made without departing from the spirit and
scope of the invention, the invention is to be defined by the claims hereinafter appended.
Diagram 1. Creation of Exempt Securities Opinion EXSO

Exhibit 1.1 Shareholder Representations Form

Shareholder
Representations
Form Letter

Legal
Review

Transactional Rule 144 Legal


Due Diligence
Opinion Issued

Exhibit 1.2 Transactional Due Diligence


Diagram 1.1 Shareholder Representation Form and Checklist

4 All R e ps C orre ct a nd
Le tte r Signe d

YES

3 5
Ma na ge m e nt
Acquire d Sha re s
C ontrol/ Inside r of NO YES via SSFC
Issue r

2 Shareholder 6
Amount of shares YES Acquisition of
less than 1% Representations YES
SSFC >366 Da ys
Form Letter

7
1 Amount of shares
YES
Shares Paid for YES
acquired

Legal
Review

1. Shares paid for and physically delivered.


2. Amount of shares represent less than 1% of the Issued and Outstanding common stock capital of Issuer.
3. Shareholder is NOT an Insider, Officer, Director, Affiliate of the Issuer.
4. All Shareholder representations are correct and Shareholder representation letter is signed and dated.
5. Shareholder acquired shares via the exercise of a (SSFC).
6. Shareholder obtained the Single Stock Futures Contract and has recorded consideration of same more than 366 days prior.
7. Shareholder inputs in sellers representation letter amount of shares and class acquired via exercise of SSCF.
8. Form is printed, shareholder confirms accuracy of same, sign, dates and submits to Donor Rep. for Legal Review
Diagram 1.2 Legal Review of Transactional Documents

Legal Review

9 14
All Seller Reps Company
Correct YES YES 12(g) reporting

10
SEC Filings Current YES Tra nsa ctiona l Due Issuance of Rule 144
Dilige nce Legal Opinion

13
11
Co. Not a Blank
Current/SOS YES YES Check Corp.

YES
12
Current
Minutes/Bylaws

9. Shareholder representations from Exhibit 1.1 are correct and right


10. Issuer is current with its mandatory Securities and Exchange Commission filings.
11. Issuer is current an din good standing with the Secretary of State in the state it is incorporated in.
12. Articles of incorporation and bylaws have been reviewed.
13. Issuer is not considered a 419/415 "blank check company' and is presently executing on its reported business plan..
14. Issuer has a class of securities registered with the Securities Exchange Commission under section 12(g)
Diagram 2. Creation of Charity Analysis Opinion

C harity

Issuance of
Legal C harity Analysis
Review Opinion

Exhibit 2.1 Charity Analysis Legal review


Diagram 2.1 Charity Analysis Opinion

Legal Issuance of
C harity Analysis
Review Opinion

1 2 3
Review of By-
Laws & Articles Review of 990's Review of
of Incorporation Charity Activity
Diagram 3 Fair Market Valuation Opinion

SSFC
C onsideration
and more than
366 days

Yes

Exempt
Securities
Legal Opinion

Yes

C harity
Analysis

Yes

Fair Market Fair Market


Valuation Formula Valuation
Opinion Report