Prophecy, as a direct contracted agent of, and underwriting entity for, our private capital investment firm, originates debt financing and private equity capital requests through external originators, educates the client regarding the structure and procedures involved, performs due diligence and qualifies the project and client based on the extensive documentation package submitted for the project, fully underwrites the request, works with the client to design acceptable terms and conditions to accommodate their projected cash flow and proforma income and expense data, provides the client with alternatives and options regarding any perceived issues and/or concerns, negotiates the agency/underwriting fee structure for the transaction, provides client introduction to the firms principals and maintains that relationship as an underwriting entity and direct representative of the investment firm. 

The sequence of events below involves a number of top quality internal underwriting, marketing and financial specialists with certain specific responsibilities that have been appointed by the principals of Prophecy to complete the entire process which includes:

1) Work with originators on initial pre-qualification of potential clients

2) Complete intake and review of submitted project documentation package

3) Implement client orientation and preparation regarding structure and procedures

4) Determine client capability by qualification and due diligence

5) Perform risk assessment and underwriting of the debt financing or private equity request

6) Execute proforma cash flow analysis and necessary restructuring with client

7) Carry out presentation, implementation, revision and/or alteration of terms and conditions of debt financing or private equity capital based on risk assessment and conformity to requirements

8) Establish and maintain a proactive working relationship with client base

With Prophecy’s professional internal specialists participating in the above procedures, and taking into account the amount of time and effort involved in the process above, Prophecy will negotiate a reasonable agency/underwriting fee with the client for the transaction allowing us to fairly compensate our independent internal personnel while also allowing us to implement an equitable payment structure applicable to external agents, brokers and/or intermediaries who have referred the client to a Prophecy specialist. The client will typically be required to pay an agency/underwriting fee of 4% of the debt financing or private equity capital amount, dependent on the total dollar amount of their request and also the number of external agents, brokers and/or intermediaries involved.

Rather than implementing a point structure, we calculate external compensation utilizing a percentage of the total fee paid by the client and assign a certain percentage to each entity based on the amount of their involvement and/or participation in the transaction, along with consideration given to their positioning in relation to the client on one end and Prophecy on the other.

Prophecy, as a company, will internally require approximately 85% of the gross agency/underwriting fee amount paid by the client to compensate our principals and our internal underwriting, marketing and financial professionals. The remaining 15% is equitably distributed between, and paid individually to, external agents, brokers and intermediaries to ensure that every entity involved receives adequate compensation in proportion to their role in the transaction.

For example:

Prophecy negotiates a 4% agency/underwriting fee paid from a qualified and contracted client based on the amount disbursed by the investment firm. Internally, Prophecy will require 85% of the total fee. Externally, Prophecy will pay out a total of 15% to all agents, brokers and/or intermediaries. Each external entity will be paid separately and equitably based on their positioning as described above. Obviously, a direct agent of the client will be paid more than a pass-through intermediary who handed off to another entity.

In review, we compensate our internal underwriting, marketing and financial specialists and our external agents, brokers and/or intermediaries, reasonably, equitably, fairly and in direct correlation to their participation in the transaction and their positioning in the hierarchy. We appreciate all of our external sources for their continued support and the quality projects that are taken in and reviewed on a daily basis.

Thank you and keep up the good work.

Regards,

Compensation Management

Prophecy Financial Group LLC

For distribution to our External Origination Specialists with broker networks

ALL EXTERNAL AGENTS, BROKERS AND INTERMEDIARIES

REGISTRATION WITH PROPHECY IS REQUIRED TO BE COMPENSATED

External agents, reps or brokers with existing contracts/agreements with their clients must realize that our investment firm will not allow for the payment of any external contracts/agreements by the client and/or from the proceeds, effectively nullifying all previous compensation arrangements. The investment firm requires that all external compensation be paid through Prophecy, therefore each external agent, rep or broker MUST be registered with Prophecy to be compensated according to the structure below.

Registration information to include (forms available):

• Personal contact info
• Company account info
• IRS W-9 form

External per entity percentage allocations based on 15% of the gross compensation

Example below assumes 4 entity levels between the client and our internal originator

• 50% Level 1 - Direct contracted agent or representative of the client
• 25% Level 2 - Broker of the direct agent or representative
• 15% Level 3 - Intermediary
• 10% Level 4 - Intermediary

Obviously, dependent on the amount of levels involved, the compensation structure would be adjusted accordingly. For example, if there were only 2 levels involved, level 1 would absorb the level 3 compensation and level 2 would absorb the level 4 compensation amounts. It stands to reason that if you are direct to the borrowing entity, with no other brokers or intermediaries involved, that you would be compensated the entire 15% .

Registered agents, brokers and intermediaries will be sent the above text in Word format, along with an External Consultant Information Form and an IRS W9 Form to sign, scan and return in PDF format to prophecyfinancial@gmail.com to complete the registration process and ensure payment of compensation.