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Method of Selling Single Stock Futures Contracts and Facilitating Delivery and

Donation Online via a Nonprofit Organization


United States Patent Application

Julie Butler
William Breck
Chris Ryan

December 26, 2010

ABSTRACT

Single Stock Futures Contracts (SSFC) is a hybrid financial instrument, which became effective
on November 2, 2002, created under the Commodity Modernization Act of 2000 (CMA). They
are futures contracts 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 Service (IRS) Internal Revenue Code (IRC) 1234(b) for purposes of tacking to
determine holding period to recognize long term capital gains and/or fair market valuation vs.
cost basis as defined under IRC 1224(14) and IRS Publication 561.
Method of selling a single stock futures contract online via a nonprofit organization is in support
of furtherance of a business objective of the for profit small business while simultaneously
offering advantages to the nonprofit charitable organization. It is a mechanism whereby a small
business gifts a certain amount of shares of its issued common/preferred stock capital to a
nonprofit and simultaneously the nonprofit issues SSFC’s against the donated common/preferred
stock capital to previous/prospective donors/investors via an online ecommerce clearing
mechanism.
The ability of a nonprofit to offer the SSFC’s contracts online in the absence of a registration
statement lies in the specific exemption for the securities of IRC §501(c)(3) non-profit
organizations - under §3(a)(4) of the Securities Act (as amended through October 13, 2009):
“(4) Any security issued by a person organized and operated exclusively for religious,
educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary
profit, and no part of the net earnings of which inures to the benefit of any person, private
stockholder, or individual; or any security of a fund that is excluded from the definition of a
Securities that is excluded from the definition of an investment company under section
3(c)(10)(B) of the Investment Company Act of 1940;”
§3(e) of the Exchange Act of 1934 provides:
“(e) Charitable organizations – (1) Exemption – Notwithstanding any other provision of this
chapter, but subject to paragraph (2) of this subsection, a charitable organization, as defined
in section 3(c)(10)(D) of the Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(D)],
or any trustee, director, officer, employee, or volunteer of such a charitable organization
acting within the scope of such person's employment or duties with such organization, shall
not be deemed to be a "broker", "dealer", "municipal securities broker", "municipal securities
dealer", "government securities broker", or "government securities dealer" for purposes of

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this chapter solely because such organization or person buys, holds, sells, or trades in
securities for its own account in its capacity as trustee or administrator of, or otherwise on
behalf of or for the account of – (A) such a charitable organization; (B) a fund that is
excluded from the definition of an investment company under section 3(c)(10)(B) of the
Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)]; or (C) a trust or other
donative instrument described in section 3(c)(10)(B) of the Investment Company Act of 1940
[15 U.S.C. 80a-3(c)(10)(B)], or the settlors (or potential settlors) or beneficiaries of any such
trust or other instrument.
“(2) Limitation on compensation – The exemption provided under paragraph (1) shall not be
available to any charitable organization, or any trustee, director, officer, employee, or
volunteer of such a charitable organization, unless each person who, on or after 90 days after
December 8, 1995, solicits donations on behalf of such charitable organization from any
donor to a fund that is excluded from the definition of an investment company under section
3(c)(10)(B) of the Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)], is either a
volunteer or is engaged in the overall fund raising activities of a charitable organization and
receives no commission or other special compensation based on the number or the value of
donations collected for the fund.”
§3(a)(10)(B) and (D) of the Investment Company Act of 1940 provide:
“(B) For the purposes of subparagraph (A)(ii), a fund is described in this subparagraph if
such fund is a pooled income fund, collective trust fund, collective investment fund, or
similar fund maintained by a charitable organization exclusively for the collective investment
and reinvestment of one or more of the following: (i) assets of the general endowment fund
or other funds of one or more charitable organizations; (ii) assets of a pooled income fund;
(iii) assets contributed to a charitable organization in exchange for the issuance of charitable
gift annuities; (iv) assets of a charitable remainder trust or of any other trust, the remainder
interests of which are irrevocably dedicated to any charitable organization; (v) assets of a
charitable lead trust; (vi) assets of a trust, the remainder interests of which are revocably
dedicated to or for the benefit of 1 or more charitable organizations, if the ability to revoke
the dedication is limited to circumstances involving – (I) an adverse change in the financial
circumstances of a settlor or an income beneficiary of the trust; (II) a change in the identity
of the charitable organization or organizations having the remainder interest, provided that
the new beneficiary is also a charitable organization; or (III) both the changes described in
subclauses (I) and (II); (vii) assets of a trust not described in clauses (i) through (v), the
remainder interests of which are revocably dedicated to a charitable organization, subject to
subparagraph (C); or (viii) such assets as the Commission may prescribe by rule, regulation,
or order in accordance with section 80a6(c) of this title.”
“(D) For purposes of this paragraph – (i) a trust or fund is ‘maintained’ by a charitable
organization if the organization serves as a trustee or administrator of the trust or fund or has
the power to remove the trustees or administrators of the trust or fund and to designate new
trustees or administrators; (ii) the term ‘pooled income fund’ has the same meaning as in
section 642(c)(5) of title 26; (iii) the term ‘charitable organization’ means an organization
described in paragraphs (1) through (5) of section 170(c) or section 501(c)(3) of title 26; (iv)
the term ‘charitable lead trust’ means a trust described in section 170(f)(2)(B), 2055(e)(2)(B),
or 2522(c)(2)(B) of title 26; (v) the term ‘charitable remainder trust’ means a charitable
remainder annuity trust or a charitable remainder unitrust, as those terms are defined in

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section 664(d) of title 26; and (vi) the term ‘charitable gift annuity’ means an annuity issued
by a charitable organization that is described in section 501(m)(5) of title 26.”
The brief summary of benefits includes:
1. Ability of a Nonprofit (a registered 501(c)(3)) to legally sell via electronic commerce,
single stock future contracts (SSFC) of donated shares (common/preferred stock capital)
of private/public registered companies the Nonprofit receives.
2. Small businesses having the ability of distributing potential future ownership in their
venture to a wide array of potential investors in absence of a registration statement filed
with the Securities and Exchange Commission.
CLAIMS
1. A method of selling single stock futures contracts via electronic commerce.
2. A method of selling single stock futures contracts via mass market commerce.
3. A method of selling single stock futures contracts via nonprofit organization.
4. A method of selling single stock futures contracts through a nonprofit organization via
electronic commerce.
5. A method of selling single stock futures contracts through a nonprofit organization via
mass market commerce.
6. A method of selling single stock futures contracts via electronic commerce, exempt from
registration with the Securities and Exchange Commission (SEC).
7. A method of selling single stock futures contracts via electronic commerce, exempt from
registration with the Commodity Futures Trading Commission (CFTC).
8. A method of distributing future share ownership of privately held corporations via mass
market commerce, exempt from registration with the Securities and Exchange
Commission (SEC).
9. A method of distributing future share ownership of privately held corporations via mass
market commerce, exempt from registration with the Commodity Futures Trading
(CFTC).
10. A method of leveraging social networks and social network activity in financing equity
based financing.
11. A method of distributing future share ownership via social networks of privately held
corporations via mass market commerce, exempt from registration with the Securities and
Exchange Commission (SEC).
12. A method of distributing future share ownership via social networks of privately held
corporations via mass market commerce, exempt from registration with the Commodity
Futures Trading Commission (CFTC).
13. A method of distributing future share ownership via internet news portals of privately
held corporations via mass market commerce, exempt from registration with the
Securities and Exchange Commission (SEC).

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14. A method of selling single stock futures contracts via electronic commerce, exempt from
registration with the Commodity Futures Trading Commission (CFTC).
15. A method of distributing future share ownership of privately held corporations via
electronic commerce, exempt from registration with the Securities and Exchange
Commission (SEC).
16. A method of distributing future share ownership of privately held corporations via
electronic commerce, exempt from registration with the Commodity Futures Trading.
17. A method of distributing future share ownership via social networks of privately held
corporations via electronic commerce, exempt from registration with the Securities and
Exchange Commission (SEC).
18. A method of distributing future share ownership via social networks of privately held
corporations via electronic commerce, exempt from registration with the Commodity
Futures Trading Commission (CFTC).
19. A method of distributing future share ownership via internet news portals of privately
held corporations via electronic commerce, exempt from registration with the Securities
and Exchange Commission (SEC).
20. A method of distributing future share ownership via internet sales portals of privately
held corporations via electronic commerce, exempt from registration with the
Commodity Futures Trading Commission (CFTC).
21. A method of segregating donated assets in a separate escrow account.
22. A method of breaking up donated assets into identifiable units.
23. A method of producing futures contracts against identifiable units.
24. A method of producing an electronic receipt for purchase of SSFC.
25. A method of producing an electronic receipt acknowledging purchasers agreement and
understanding to uniform futures disclosure form.
26. A method of producing an electronic receipt informing purchaser of SSFC their right to
rescind purchase.
27. A method of producing an electronic communication to purchaser of SSFC around
delivery date of same.
28. A method of producing an electronic communication to purchaser of SSFC of the
Valuation of same
29. A method of producing an electronic communication to purchaser of SSFC of options
available for the delivery of shares underlying same.
30. A method of producing an electronic receipt for the delivery of shares underlying the
SSFC.
31. A method of producing an electronic communication as to the exempt status under 17
CFR 230.144 of the shares delivered under the SSFC.
32. A method of producing an electronic communication to the Fair Market Valuation of the
shares delivered underlying the SSFC.

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33. A method of producing an electronic communication to Charities willing to accept shares
delivered under the SSFC.
34. A method of using an ecommerce gateway for the delivery of the shares underlying the
SSFC.
35. A method of producing an electronic receipt of the purchase and delivery of shares
underlying a SSFC.
36. A method of electronically donating a certain amount of shares acquired under the SSFC
to approved charitable organization.
37. A method of producing an electronic receipt from receiving charity as to the receipt of
shares acquired under delivery of the SSFC.
38. A method of producing an electronic receipt and valuation opinion as to the fair market
value of the shares donated, to charity as a result of the delivery of the underlying shares
of the SSFC.

DESCRIPTIONCROSS-REFERENCE
TO RELATED APPLICATIONS

[0001] The present application claims priority from provisional application Ser. No. 61/292,416
entitled " Method for For-Profit Company to Increase Charitable Gifting Through Stock Futures
Contract Issued by Related Charitable Organization &/or Method for Charitable Organization to
Support Entrepreneurship by Increasing Investment in Start-Up and Early Stage Companies,"
filed on January 5, 2010.
[0002] The present application claims priority from provisional application Ser. No.61/422,027
entitled “Method of Financing Small Business and Support of Entrepreneurship Through
Charitable Alliance” filed on December 10, 2010.
[0003] The present application claims priority from provisional application Ser. No.61/422,052
entitled “Method of Receiving Stock, Donating it and Receiving Fair Market Valuation for
Same” filed on December 10, 2010.
[0004] The present application claims priority from provisional application Ser. No.61/422,041
entitled “Method of Financing Small Business Consulting Work” filed on December 10, 2010.
FIELD OF INVENTION
[0005] This invention relates to a nonprofit’s distribution method of donated property. It is a
system which creates a mechanism whereby the nonprofit can issue future rights to donated
property, specifically Single Stock Futures Contracts against donated common/preferred shares
of Private/Public Ventures (PPV) to potential donors and/or investors in a mass market/electronic
commerce environment, without requiring the donor and or the recipient of the donated property
the additional burden of registering the future contract rights (Single Stock Futures Contract) and
or the Donated Shares (DS), with the Securities and Exchange Commission (SEC) and/or the
Commodity Futures Trading Commission (CFTC). More specifically, the invention relates to an
improved method of distributing SSFC to donors and/or investors in purchasing shares in

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common/preferred stock of private/public ventures (PPV) by aligning the PPV and the Nonprofit
(NP) in creating enhanced transparency and market price efficiency, which is created by the
following mechanism:
1) Shares donated to NP by PPV are passed through to NP in a Segregated Escrow Account
(SEA) of the NP;
2) NP performs due diligence on the PPV and requests the following information about the PPV;
2a) Business Plan of PPV;
2b) Management Resumes and Officer Director Background;
2c) Web site URL;
2d) Financials of POCS (audited/reviewed);
2e) State of Incorporation and status (current, default, revoked);
2f) Authorized, and issued common and preferred stock capital;
2g) All options, warrants, and overhang;
2h) All Employee Stock Option Plans (ESOP’s), and Incentive Stock Option Plans (ISOP’s);
2i) All litigation involving the PPV, and whether defendant or plaintiff;
2j) All schedules of debts (including convertible debentures);
2k) All schedule of assets (including intellectual property, patents, trademarks, copyrights);
2l) Certificate of designation for each issued class of preferred stock;
2m) Signed representation form from PPV that they are not subject and/or qualified under
Regulation T of the Federal Reserve Board.
3) NP then divides donated property (common/preferred stock) into individual units;
4) NP then issues SSFC’s against the divided units with underlying collateral being
(common/preferred stock of PPV) held in segregated escrow account for insurance of future
delivery of collateral upon execution of delivery of the SSFC;
5) NP places collected information in 2a-2l of PPV inside the NP website via a clearly Identified
Segregated Frame (ISF) with navigation of available information from PPV;
6) NP then places within the ISF a banner identifying to viewer that SSFC in the PPV are
available for purchase;
7) Upon donor/investor clicking 6 above they are taken to an Ecommerce Electronic Checkout
Page (EECP) identifying the SSFC offer including amount of shares underlying the SSFC,
European Clearing Future Delivery Date (ECFDD), and Delivery Price per Share (DPPS);
8) Prior to paying for the SSFC the donor/investor will have to check and initial acceptance of
the Uniform Futures Disclosure Form;
9) Upon 1-8 being executed donor/investor will be taken to an electronic payment within the NP
internet website.

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10) Upon donated shares conforming to 2m above purchaser will be directed to pay for the SSFC
via credit card or other electronic credit gateway.
11) Upon donated shares not conforming to 2m above purchaser will be directed to pay for
SSFC via a debit card and/or automated teller machine card (ATM) or electronic check.
12) Upon purchaser concluding transaction, an email is sent to purchaser delivering an electronic
receipt with barcode; the electronically signed Uniform Futures Disclosure Agreement and a
notice of three day right of rescission.
BACKGROUND OF THE INVENTION
[0006] Nonprofits are predominantly driven by donation classes, consisting of cash, property,
real estate, annuities, life insurance bequeath and publicly traded securities. The present
invention develops and supports the creation of a whole new donation class, consisting of
common/preferred stock of private corporation stock. It is with respect to these considerations
and others treat the present invention has been made. 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.
[0007] Current Business Practices
[0008] Common Stock – A form of corporate equity ownership, a type of security. It is called
"common" to distinguish it from preferred.
[0009] Preferred Stock – A special equity security that has properties of both equity and a debt
instrument and is generally considered a hybrid instrument. Preferred are senior (i.e. higher
ranking) to common stock, but are subordinate to bonds and other forms of debt.
[0010] Certificate of Designation – The document describing the rights and privileges of the
class of securities it creates.
[0011] 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 1234B 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.”
[0012] 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))
[0013] Exemption of 501(c)(3) to Issue Single Stock Futures Contract - §3(a)(4) of the Securities
Act (as amended through October 13, 2009) contains a specific exemption for the securities of
IRC §501(c)(3) non-profit organizations:
“(4) Any security issued by a person organized and operated exclusively for religious,
educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary
profit, and no part of the net earnings of which inures to the benefit of any person, private
stockholder, or individual; or any security of a fund that is excluded from the definition of a
Securities that is excluded from the definition of an investment company under section
3(c)(10)(B) of the Investment Company Act of 1940;”

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§3(e) of the Exchange Act of 1934 provides:
“(e) Charitable organizations – (1) Exemption – Notwithstanding any other provision of this
chapter, but subject to paragraph (2) of this subsection, a charitable organization, as defined
in section 3(c)(10)(D) of the Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(D)],
or any trustee, director, officer, employee, or volunteer of such a charitable organization
acting within the scope of such person's employment or duties with such organization, shall
not be deemed to be a "broker", "dealer", "municipal securities broker", "municipal securities
dealer", "government securities broker", or "government securities dealer" for purposes of
this chapter solely because such organization or person buys, holds, sells, or trades in
securities for its own account in its capacity as trustee or administrator of, or otherwise on
behalf of or for the account of – (A) such a charitable organization; (B) a fund that is
excluded from the definition of an investment company under section 3(c)(10)(B) of the
Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)]; or (C) a trust or other
donative instrument described in section 3(c)(10)(B) of the Investment Company Act of 1940
[15 U.S.C. 80a-3(c)(10)(B)], or the settlors (or potential settlors) or beneficiaries of any such
trust or other instrument.
“(2) Limitation on compensation – The exemption provided under paragraph (1) shall not be
available to any charitable organization, or any trustee, director, officer, employee, or
volunteer of such a charitable organization, unless each person who, on or after 90 days after
December 8, 1995, solicits donations on behalf of such charitable organization from any
donor to a fund that is excluded from the definition of an investment company under section
3(c)(10)(B) of the Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)], is either a
volunteer or is engaged in the overall fund raising activities of a charitable organization and
receives no commission or other special compensation based on the number or the value of
donations collected for the fund.”
§3(a)(10)(B) and (D) of the Investment Company Act of 1940 provide:
“(B) For the purposes of subparagraph (A)(ii), a fund is described in this subparagraph if
such fund is a pooled income fund, collective trust fund, collective investment fund, or
similar fund maintained by a charitable organization exclusively for the collective investment
and reinvestment of one or more of the following: (i) assets of the general endowment fund
or other funds of one or more charitable organizations; (ii) assets of a pooled income fund;
(iii) assets contributed to a charitable organization in exchange for the issuance of charitable
gift annuities; (iv) assets of a charitable remainder trust or of any other trust, the remainder
interests of which are irrevocably dedicated to any charitable organization; (v) assets of a
charitable lead trust; (vi) assets of a trust, the remainder interests of which are revocably
dedicated to or for the benefit of 1 or more charitable organizations, if the ability to revoke
the dedication is limited to circumstances involving – (I) an adverse change in the financial
circumstances of a settlor or an income beneficiary of the trust; (II) a change in the identity
of the charitable organization or organizations having the remainder interest, provided that
the new beneficiary is also a charitable organization; or (III) both the changes described in
subclauses (I) and (II); (vii) assets of a trust not described in clauses (i) through (v), the
remainder interests of which are revocably dedicated to a charitable organization, subject to
subparagraph (C); or (viii) such assets as the Commission may prescribe by rule, regulation,
or order in accordance with section 80a6(c) of this title.”

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“(D) For purposes of this paragraph – (i) a trust or fund is ‘maintained’ by a charitable
organization if the organization serves as a trustee or administrator of the trust or fund or has
the power to remove the trustees or administrators of the trust or fund and to designate new
trustees or administrators; (ii) the term ‘pooled income fund’ has the same meaning as in
section 642(c)(5) of title 26; (iii) the term ‘charitable organization’ means an organization
described in paragraphs (1) through (5) of section 170(c) or section 501(c)(3) of title 26; (iv)
the term ‘charitable lead trust’ means a trust described in section 170(f)(2)(B), 2055(e)(2)(B),
or 2522(c)(2)(B) of title 26; (v) the term ‘charitable remainder trust’ means a charitable
remainder annuity trust or a charitable remainder unitrust, as those terms are defined in
section 664(d) of title 26; and (vi) the term ‘charitable gift annuity’ means an annuity issued
by a charitable organization that is described in section 501(m)(5) of title 26.”
[0014] Small Business – A business that is usually privately owned and operated with a small
number of employees and relatively low volume of sales.
[0015] Future Delivery Price – The price to deliver shares underlying a Single Stock Futures
Contract (SSFC).
[0016] Fair Market Value – 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.
[0017] Internal Revenue Code (IRC) – Federal tax law begins with the Internal Revenue Code
(IRC), enacted by Congress in Title 26 of the United States Code (26 U.S.C.).
[0018] IRC 1234B – 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

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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.”
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(14) – 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.”

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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 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:

  11
 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.

  12
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.
Deductions of More Than $500,000
If you claim a deduction of more than $500,000 for a donation of property, you must attach a
qualified appraisal of the property to your return. This does not apply to contributions of cash,
inventory, publicly traded stock, or intellectual property. If you do not attach the appraisal, you
cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable
cause and not to willful neglect.
[0021] 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).
[0022] 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 average weekly reported volume of trading in the securities on all national securities
exchanges for the preceding 4 weeks
 The average 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.
[0023] Commodity Modernization Act – The 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

  13
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.
[0024] European Clearing Structure – An option that can only be exercised at the end of its
life, at its maturity.
BRIEF SUMMARY OF INVENTION
[0025] In accordance with one aspect of the invention, a method supports the electronic
commerce marketing of SSFC’s supported by private business donation of common/preferred
stock to a charitable organization. The method includes the step of proceeding with the business
objective in response to a decision by a decision maker by performing at least one of several
other steps. The other steps include:
[0026] A For-Profit Corporation (FPC) wishing to Underwrite a Series of Securities (USS)
establishes or identifies a non-profit 501(c)(3) corporation (NPC) to be a beneficiary of the
process;
[0027] A series of securities (preferred and/or common stock) (POCS) from the FPC is then
donated to the designated NPC;
[0028] The NPC performs due diligence on the FPC as it pertains to the POCS, collecting
current information as would be required to register a class of securities under Section 12(g) of
the 1934 Securities and Exchange Act;
[0029] Upon acceptable information being provided by the FPC to the NPC in [0005] above, the
NPC accepts the POCS from the FPC and moves them to a Segregated Escrow Account (SEA);
[0030] Upon [0028], [0029] being complete, the NPC then disseminates information as to the
FPC and publishes this information with an enclosed online frame of the NPC website as a sub
domain of the URL.
[0031] On the Sub domain NPC URL banner information is presented informing viewer that
SSFC’s are available for purchase.
[0032] Upon viewer clicking on the link in [0031] above, Purchaser will be sent to an
Ecommerce Electronic Checkout Page (EECP) within the NPC sub domain.
[0033] In [0032] above Purchaser will be presented the SSFC offer including amount of shares
underlying the SSFC, European Clearing Future Delivery Date (ECFDD), and Delivery Price per
Share (DPPS).
[0034] Upon Purchaser wishing to proceed with SSFC purchase, they will be prompted to read,
accept and initial a Uniform Futures Disclosure Form.
[0035] Upon Purchaser successfully completing [0034] above, they will be directed to an
electronic checkout page confirming order and requesting name, address, email, amount, credit
card information and security identification as required by payment gateway.
[0036] Upon FPC being exempt under Regulation T of the Federal Reserve Board, Purchaser
will have option to purchase SSFC using credit, in the form credit card and or other form of
electronic credit gateway.

  14
[0037] Upon FPC not being exempt under Regulation T of the Federal Reserve Board Purchaser
will be limited to purchasing SSFC by either electronic check, and or electronic debit transaction.
[0038] Upon Purchaser consummating transaction, a bar-coded receipt and description of the
purchase of the SSFC is generated and sent to the viewer’s email as input in [0035] above.
[0039] Upon Purchaser consummating transaction, a separate email is sent to the Purchaser
showing acceptance and electronic signature of the Uniform Futures Disclosure Form
accompanying the [0038] above.
[0040] Upon Purchaser consummating transaction, a separate email is sent notifying viewer of a
3 day right to rescind the purchase of the SSFC.
[0041] On or about the European Delivery date of the SSFC, an email is sent to the Purchaser
detailing the economics of the SSFC including Fair Market Valuation of the equity build up in
the SSFC in accordance to assisting in the execution of [0003] above.
DESCRIPTION OF THE DRAWINGS
[0042] 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.
[0043] FIG. 1 illustrates one example of a logic flow for supporting charitable giving by a
business in furtherance of a profit objective of the business;
[0044] FIG. 2 illustrates the NPC summary of due diligence prior of FPC prior to issuance of
SSFC representing same.
[0045] FIG. 3 illustrates the Process a NPC undertakes to segregate POCS into SSFC Units.
[0046] FIG. 4 illustrates posting of information of the FPC within the NPC website, for the sake
of selling SSFC in same.
[0047] FIG. 5 illustrates the electronic checkout/ecommerce layout and information provided to
prospective purchaser of a SSFC.
[0048] FIG. 5a illustrates the process or a prospective purchaser filling out the required
information to determine eligibility of program.

[0049] FIG. 6 illustrates process of purchaser accepting the uniform futures disclosure form.
[0050] FIG. 6a illustrates process of purchaser receiving email receipt of uniform futures
disclosure form.
[0051] FIG. 7 illustrates process of purchaser receiving receipt of purchase of single stock
futures contract, with email verification of same.
[0052] FIG 8 illustrates process of charity informing purchaser of SSFC of value of same for
purposes of facilitating electronic purchase and delivery of same.
[0053] FIG 8a illustrates ecommerce page SSFC owner is directed to from FIG 8 to pay for
delivery of shares underlying SSFC
[0054] FIG 9 illustrates process of charity directing owner of newly delivered of options of
delivery.

  15
[0055] FIG 10 illustrates process of charity taking information of who and how many shares
are to be donated and or delivered to purchaser.
[0056] FIG 10a illustrates an instant Fair Market Valuation Opinion being electronically
generated for the benefit of the Donors records.

DETAILED DESCRIPTION OF CERTAIN EMBODIMENTS


[0057] 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.
[0058] 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.
[0059] 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."
[0060] 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.
[0061] 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.
[0062] 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.
[0063] The ‘invention’ describes a protocol, process and procedure to permit ‘qualified’ ‘Non-
Profit Charitable organizations’ (NPC) (formed and operated for purposes described in Section
501(c)(3)), to sell via electronic means single stock futures contracts in corporations who have
donated common/preferred stock to the Non-Profit. This process exists in part due to an

  16
exemption of 501(c)(3) NPCs to issue Single Stock Futures Contract under §3(a)(4) of the
Securities Act (as amended through October 13, 2009), which contains a specific exemption for
the securities of IRC §501(c)(3) non-profit organizations:
“(4) Any security issued by a person organized and operated exclusively for religious,
educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary
profit, and no part of the net earnings of which inures to the benefit of any person, private
stockholder, or individual; or any security of a fund that is excluded from the definition of a
Securities that is excluded from the definition of an investment company under section
3(c)(10)(B) of the Investment Company Act of 1940;”
§3(e) of the Exchange Act of 1934 provides:
“(e) Charitable organizations – (1) Exemption – Notwithstanding any other provision of this
chapter, but subject to paragraph (2) of this subsection, a charitable organization, as defined
in section 3(c)(10)(D) of the Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(D)],
or any trustee, director, officer, employee, or volunteer of such a charitable organization
acting within the scope of such person's employment or duties with such organization, shall
not be deemed to be a "broker", "dealer", "municipal securities broker", "municipal securities
dealer", "government securities broker", or "government securities dealer" for purposes of
this chapter solely because such organization or person buys, holds, sells, or trades in
securities for its own account in its capacity as trustee or administrator of, or otherwise on
behalf of or for the account of – (A) such a charitable organization; (B) a fund that is
excluded from the definition of an investment company under section 3(c)(10)(B) of the
Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)]; or (C) a trust or other
donative instrument described in section 3(c)(10)(B) of the Investment Company Act of 1940
[15 U.S.C. 80a-3(c)(10)(B)], or the settlors (or potential settlors) or beneficiaries of any such
trust or other instrument.
“(2) Limitation on compensation – The exemption provided under paragraph (1) shall not be
available to any charitable organization, or any trustee, director, officer, employee, or
volunteer of such a charitable organization, unless each person who, on or after 90 days after
December 8, 1995, solicits donations on behalf of such charitable organization from any
donor to a fund that is excluded from the definition of an investment company under section
3(c)(10)(B) of the Investment Company Act of 1940 [15 U.S.C. 80a-3(c)(10)(B)], is either a
volunteer or is engaged in the overall fund raising activities of a charitable organization and
receives no commission or other special compensation based on the number or the value of
donations collected for the fund.”
§3(a)(10)(B) and (D) of the Investment Company Act of 1940 provide:
“(B) For the purposes of subparagraph (A)(ii), a fund is described in this subparagraph if
such fund is a pooled income fund, collective trust fund, collective investment fund, or
similar fund maintained by a charitable organization exclusively for the collective investment
and reinvestment of one or more of the following: (i) assets of the general endowment fund
or other funds of one or more charitable organizations; (ii) assets of a pooled income fund;
(iii) assets contributed to a charitable organization in exchange for the issuance of charitable
gift annuities; (iv) assets of a charitable remainder trust or of any other trust, the remainder
interests of which are irrevocably dedicated to any charitable organization; (v) assets of a
charitable lead trust; (vi) assets of a trust, the remainder interests of which are revocably

  17
dedicated to or for the benefit of 1 or more charitable organizations, if the ability to revoke
the dedication is limited to circumstances involving – (I) an adverse change in the financial
circumstances of a settlor or an income beneficiary of the trust; (II) a change in the identity
of the charitable organization or organizations having the remainder interest, provided that
the new beneficiary is also a charitable organization; or (III) both the changes described in
subclauses (I) and (II); (vii) assets of a trust not described in clauses (i) through (v), the
remainder interests of which are revocably dedicated to a charitable organization, subject to
subparagraph (C); or (viii) such assets as the Commission may prescribe by rule, regulation,
or order in accordance with section 80a6(c) of this title.”
“(D) For purposes of this paragraph – (i) a trust or fund is ‘maintained’ by a charitable
organization if the organization serves as a trustee or administrator of the trust or fund or has
the power to remove the trustees or administrators of the trust or fund and to designate new
trustees or administrators; (ii) the term ‘pooled income fund’ has the same meaning as in
section 642(c)(5) of title 26; (iii) the term ‘charitable organization’ means an organization
described in paragraphs (1) through (5) of section 170(c) or section 501(c)(3) of title 26; (iv)
the term ‘charitable lead trust’ means a trust described in section 170(f)(2)(B), 2055(e)(2)(B),
or 2522(c)(2)(B) of title 26; (v) the term ‘charitable remainder trust’ means a charitable
remainder annuity trust or a charitable remainder unitrust, as those terms are defined in
section 664(d) of title 26; and (vi) the term ‘charitable gift annuity’ means an annuity issued
by a charitable organization that is described in section 501(m)(5) of title 26.”
[0064] The ‘invention’ involves the formation or selection of a ‘target company’ (i.e., a business
or company which meets the ‘selection criteria’ of the charitable organization) utilizing
‘appropriate criteria’, including the potential for the ‘target company’ to become a ‘public
company’ by meeting ‘essential criteria’ (IBP) which include the standards required to submit a
registration statement with the U.S. Securities and Exchange Commission to become SEC
section 12(g) ‘Reporting Company with a class of securities eligible to trade (either through
registration and or exemption from registration as afforded under CFR 17.230.144 inclusive) on
an Domestic, Foreign or Over the Counter (OTC) exchange and or platform, (or with or through
any similar regulatory organization which supervises and/or regulates the registration or
regulation of companies offering their ‘securities’ for purchase to the general public and/or the
registration or regulation of securities exchanges) or similar ‘essential criteria’(IBP).
[0065] In addition to the ‘essential criteria’ indicated above, ‘other criteria’ may include:
[0066] Shares donated to NP by PPV are passed through to NP in a Segregated Escrow Account
(SEA) of the NP;
[0067] NP performs due diligence on the PPV and requests the following information about the
PPV:
A. Business Plan of PPV;
B. Management Resumes and Officer Director Background;
C. Web site URL;
D. Financials of POCS (audited/reviewed);
E. State of Incorporation and status (current, default, revoked);
F. Authorized, and issued common and preferred stock capital;

  18
G. All options, warrants, and overhang;
H. All Employee Stock Option Plans (ESOP’s), and Incentive Stock Option Plans (ISOP’s);
I. All litigation involving PPV and whether defendant or plaintiff;
J. All schedule of assets (including intellectual property, patents, trademarks, copyrights);
K. All schedules of debts (including convertible debentures);
L. Certificate of designation for each issued class of preferred stock;
M. Signed representation form from PPV that they are not subject and/or qualified under
Regulation T of the Federal Reserve Board.

[0068] NP then divides donated property (common or preferred stock) into individual units;

[0069] NP then issues SSFC’s against the divided units with underlying collateral being
(common/preferred stock of PPV) held in segregated escrow account for insurance of future
delivery of collateral upon execution of delivery of the SSFC;
[0070] NP places collected information in 2a-2l of PPV inside the NP website via a clearly
Identified Segregated Frame (ISF) with navigation of available information from PPV;
[0071] NP then places within the ISF a banner identifying to viewer that SSFC in the PPV are
available for purchase;
[0072] Upon donor/investor clicking [0069] above, they are taken to a Ecommerce Electronic
Checkout Page (EECP) identifying the SSFC offer including amount of shares underlying the
SSFC, European Clearing Future Delivery Date (ECFDD), and Delivery Price per Share (DPPS);
[0073] Prior to paying for the SSFC the donor/investor will have to check and initial acceptance
of the Uniform Futures Disclosure Form;
[0074] Upon [0066], [0067], [0068], [0069], [0070], [0071], [0072] & [0073] being executed,
donor/investor will be taken to an electronic payment within the NP internet website;
[0075] Upon donated shares conforming to [0067] subsection L above, purchaser is qualified to
pay for the SSFC via credit card;
[0076] Upon donated shares not conforming to [0067] subsection L above, purchaser is qualified
to pay for SSFC via a debit card and/or automated teller machine card (ATM) or electronic
check;
[0077] Upon purchaser concluding transaction, an email is sent to purchaser delivering an
electronic receipt of SSFC purchase;
[0078] Upon purchaser concluding transaction, an email is sent to purchaser delivering
electronically signed uniform futures disclosure form pertaining to SSFC purchase;
[0079] Upon purchaser concluding transaction, an email is sent to purchaser delivering an
electronic receipt that purchaser has right to rescind transaction within three business days;
[0080] Upon purchaser concluding transaction, an email is sent to purchaser prior to delivery
date informing of fair market valuation of SSFC, and choices in taking delivery of same.

  19
Fig 1

FPC Non-profit

1. For Profit C orporation gifts shares to a 501(c)(3) qualified Non-Profit C orporation.

2. Non-Profit C orporation accepts gifted shares and determines that assisting the
company in a Business Development iniatitive is in the Non-Profits best interest.

  20
Fig 2

FPC Non-profit

1) Business plan
2) Management resumes and officer & directors background
3) Website URL
4) Audited financials of company
5) Standing with state of incorporation
6) C apital structure of company
7) C ompany overhang (option/warrants, etc)
8) ESOP's/ISOP's
9) Litigation
10) Schedule of debts
11) Schedule of assets

  21
Fig 3

FPC Non-profit

1) For profit corporation donates shares Segregated


to Non-profit Bar coded
Escrow
Collateral Units
2) Non-profit places donated shares into a Account 3
segregated escrow account.

3) Donated shares are broken down into


bar coded collateral units.
4
4) Single Stock Futures C ontract are created
for each Barcoded C ollateral Unit Single Stock
Futures
5) Barcoded and C ollateral Backed Single
Stock Futures C ontracts are placed in Contracts
online inventory for sale.

Placed in online
inventory

  22
Fig 4

1
NON PROFIT Website
(permanent outer frame)
NON PROFIT Website (permanent outer

For Profit C orporation Embedded Information 2 SSFC


6 Banner
4 AD
FPC I 3 SSFC I

For Profit C orporation Embedded Information Window


frame)

1) Non Profit Website (permanent outer frame)

2) For Profit C orporation Information embedded (permanent inner frame)


within the Non profit website shell.

3) Links that open within the Non Profit Website Shell


disclosing publicily available information about the For Profit C orporation
(permanent inner frame)

4) Links that open within the Non Profit Website Shell (permanent inner frame)
disclosing information about the For Profit C orporation Single Stock Futures C ontract

5) Graphical view in support that all information about the For Profit C orporation and/or
the single stock futures contract will at all times be within the Non-Profit website shell
clearly identified by any viewer or prospective purchaser.
(Non Profit permanent outer frame, with For Profit information being permanent inner frame

6) Banner Ad within the Non Profit Website explaining to viewer/prospective purchaser


that Single Stock Futures C ontracts are available for purchase. (permanent inner frame)

  23
Fig 5

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

Product Details Rate Total


(permanent outer frame)
Non-Profit Website

1 2 3 4

1) Description of product (Single Stock Futures C ontract of Eureka Foundation 00a1).

2) Details of the Single Stock Futures C ontract (Right to take delivery of X amount
shares of Y stock on or before (delivery date) for (delivery price) per share.

3) Future contract deposit per share.

4) C alculated field consisting of the formula of,


(Amount of shares) x ( Future contract deposit per share).

5) Proceed to C heckout Box

  24
Fig 5a

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

First Name

Last Name
(permanent outer frame)
Non-Profit Website

Address

C ity

State

Zip

C redit C ard
Information

Security C ode

  25
Fig 6

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

Uniform Futures Disclosure Form 1


(permanent outer frame)
Non-Profit Website

(First Name) (Last Name) 2

(Language of Disclosure) 3

(Delivery Date) 4

(Delivery Price per share) 5

I have read and agree to


6
the uniform futures form Electronic Signature 7

1) Auto generated customized Uniform Futures Disclosure Form


2) First and Last Name drawn by intake form
3) Language of disclosure agreement
4) Delivery date of shares/expiration of SSFC .
5) Delivery Price per share
6) C onfirmation of acceptance of terms
7) Electronic signature
8) C ontinue to checkout

  26
Fig 6a

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

Uniform Futures Disclosure Form


(permanent outer frame)
Non-Profit Website

(First Name) (Last Name)

(Language of Disclosure)

(Delivery Date)

(Delivery Price per share)

Futures Disclosure Document Sent to (Email)

1) C onfirmation page that Uniform Futures Disclosure Form


was sent to purchasers email address.

  27
Fig 7

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

Single Stock Futures C ontract 1


(permanent outer frame)
Non-Profit Website

(First Name) (Last Name) 2

(Language of Single Stock Futures C ontract ) 3

(Amount of Shares) 4

(Issuer of Shares) 5

(Physical Location of Shares) 6

(Delivery Date) 7

(Delivery Price per share) 8

SSFC Sent to (Email)

1) Auto generated Single Stock Futures C ontract with date of purchase


2) First and Last name of Owner
3) Language of Single Stock Futures C ontract
4) Amount of shares
5) Issuer of shares (underlying collateral)
6)Physical location of Shares
7) Delivery Date (expiration date) of Single stock futures contract
8) Delivery price per share
9) confirmation that Single Stock Futures contract was sent to email provided.

  28
Fig 8

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

Single Stock Futures C ontract # 1


(permanent outer frame)

Underlying C ollateral of C ontract 2


Non-Profit Website

Total Amount of Shares Available 3

Total Amount of Share to Deliver 4

Delivery Price per Share 5

Bid Price 6

Ask Price 7

Fair Market Valuation Price 8


10

Total 9

1) Bar C oded Single Stock Futures C ontract which matches Physical C ontract Sent.
2) Identification of Underlying C ollateral of the Single Stock Futures C ontract (Stock).
3) Total Amount of Shares Available Under the Single Stock Futures C ontract.
4) Total Amount of Shares Owner of C ontract Wants to Take Delivery On (Input Field).
5) Delivery Price per Share.
6) Bid Price of Underlying Stock at the C lose of Business.
7) Ask Price of Underlying Stock at the C lose of Business.
8) Fair Market Valuation Price of Shares (Bid+Ask/2) +Variables of Valuation)
9) Total (calculated field (Delivery Price per Share * Total Amount of Shares to Deliver).
10) C ontinue to checkout (goto FIG 8a)

  29
Fig 8a

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

First Name
(permanent outer frame)
Non-Profit Website

Last Name

Address

C ity

State

Zip

C redit C ard
Information

Security C ode

  30
Fig 9

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

C ompany Shares
(permanent outer frame)

Total Amount of Shares Owned


Non-Profit Website

Total Amount to Take in Your Name

Total Amount to Donate in C harity

Do you Want to Donate to a C harity


which has been pre-qualified and can
give instant receipt and Fair Market
Opinion of Donation

YES NO

  31
Fig 10

Non-Profit Website
(permanent outer frame)

For Profit C orporation


(permanent inner frame)

C ompany Shares Input Field


(permanent outer frame)

Total Amount of Shares Owned


Non-Profit Website

C alled Field

Date which SSFC was Acquired


C alled Field
Are You an Officer of Director
of the Shares Underlying the SSFC YES/NO

Date at which you took deliver of


C alled Field
the shares underlying SSFC

C harity to which you want to


Scroll Box of Pre Qualified C harities
donate shares to

Amount of Shares I wan to Donate Input

I authorize Eureka Foundation to send shares immediately


in the amount to the designated above to the C harity identified. Electronic Signature

Donate Shares

  32
Fig 10a

Non-Profit Website
(permanent outer frame)

Law Firm Letterhead Date

To whom it may concern:

(Individual/company) on this date donated (Amount of shares) of (C ompany Name)


(Stock Symbol).
(permanent outer frame)
Non-Profit Website

We have received Representation from donor that they are not an officer or director, and
the average closing shares price on day of donation was (C alculated Field- (Bid+Ask/2)

The C hairty which received the shares via an irrevocable transfer is a chairty in good
with the IRS, has filed current form 990's and is current and good standing with the
secretary of state in which they are incorporated.

In our opinion the charity would be qualified as a (Private/Public) (C harity/Foundation)


and that the donation of shares for valuation purposes of the donation would be

$100,000 dollars

Signature of Lawyer

Send as Email

  33
  34