VI89U: VFS Income Long-term Unit Trust 2008-2009

1 year unit trust set to start trading on July 1st 2008 and expire on June 30th

Total shares: 10,000

Prospectus

Company Tagline

1 year unit trust set to start trading on July 1st 2008 and expire on June 30th

CEO's Real Life Name

Aaron D. Smalley

CEO's Real Life Location

Midland Michigan

Board of Directors

Current Verve Financial Services Officers/Internal Directors:
CEO/CFO: Redd Oconnell
Marketing: Delia Coleman
IT: Stray Underwood

External Directors:
IntLibber Brautigan

Second Life's first Unit Investment Trust

After many years of active and profitable RL investing and with a bachelor’s degree in business with a focus in financial analysis, and currently serving as the CFO of two real-world private businesses; I recently formed Verve Financial Services, which is intended to be a financial and business consulting firm that is also in the process of setting up several investment products that will be intended to serve the investing public in the same way that their real-life equivalents do. Verve Financial will be operated with a strong sense of business ethics as well as with a firm understanding of the capital and assets markets, both virtual and real-world.

Verve Financial Services management of these funds is being handled and structures such that if the fund is profitable, we will collect s very small portion of that profit in exchange for our services, whereas if the fund proves not to be profitable, our fee structure is designed such that we will only make enough to cover our bare minimum operational costs. Thus we will have as much interest in seeing this ETF become profitable as the investors who entrust their funds to us.

There are safety nets to ensure that we will not run off with these funds as we have a 3 month pre-paid tier holding of more than 3,000 square meters of waterfront property on the Venture Square sim, as well as the management of VFS having personal funds invested into all four of the current stock markets that operate within SL. Also the funds that we manage will all be reinvested into these exchanges, thus if anything were to happen, the investors would easily be able to recapture most of their value due to the various exchanges being able to seize control of all of the funds, as well as the management companies funds and land holdings.

I am also a firm believer in business ethics and morals, and as such value the integrity that I have that others who know me are likely to attest to. In this type of a position without trust you will not be able to conduct business, and as such I intend to work hard and dedicate myself to showing the level of dedication and integrity that underlies everything I do. And my plan is to instill this same level of trust and integrity into the rest of the staff of Verve Financial Services, as such integrity and trust is what will make or break us as a service based company. Our goals with the operation of these funds is first to provide a much wider range of investment products for the general public to utilize in their drive towards financial stability. Most of the products we offer will allow small investors who are not knowledgeable about the markets and companies that trade on them to be able to combine their funds with others and in the process reduce their risk and increase the diversity and stability of their investments. However all potential investors should still recognize that investing can still be risky, and as such I highly recommend that you don’t invest what you cannot afford to lose. This is our first offering with several different products to fit the needs and interests of the SL investment public. Likewise we will also be offering many more investment products in the future, some of which will be more risky but possibly more rewarding to suit the desires of those who are willing to take bigger risks in the hopes of seeing bigger returns.

Business Overview

This VFS Income Long-term Unit Trust 2008-2009 [VI89U] UIT (Unit Investment Trust) is being set up to maximize income for its investors over the year that is exits. It becomes active as of July 1st of 2008 and will expire on June 30th of 2009. It will trade on ACE, similar to the way that a stock would, as a Unit Investment Trust is actually a specialized type of closed-ended and short-term (one year time limit on this one) ETF type of product. Being intended to generate income, this UIT will focus on using all capital gained in its IPO process and over its expenses (3% of capital raised is retained by ACE, and an additional 2% is retained by Verve Financial Services for setting up and managing this trust, will be used to purchase stocks that have a record of paying the highest dividends for their cost. All dividends collected each month of the life of this trust (minus 3% of the dividend income to help cover management costs) will be paid back out to the holders of each of the trusts units. On the expiration date (June 30th 2009), the trust will expire and all of its assets will be liquidated over the ensuing 10 days, with the proceeds (-3% of profits that may have been generated above the original asset value of said trust at time of its creation being paid to Verve Financial Services to cover the costs associated with its expiration) will be paid out in full to the holders of each unit of the trust. If a new trust is started at that date, the investors will have the option to “roll-over” their proceeds into the new UIT at that time.

Business Strategy

UIT’s (Unit Investment Trusts) tend to have very low management costs as compared to many other types of investment products, due to the fact that they are passively managed once they are created with a focus on creating short term income for their investors.

All dividends that are paid by the companies held by this UIT will be redistributed to its shareholders in proportion to their ownership in the UIT, minus the 3% profit fee charged by Verve Financial Services for managing the fund. With this UIT being managed as an “Income” Unit Investment Trust, it will invest into companies that have a proven track record for paying high dividends relative to their per share price. Unit Investment Trusts do not utilize the same open-ended/value correction mechanism that ETF’s utilize, thus any shares in a UIT that are not sold in the IPO are dissolved, thus only the number purchased during the IPO are available until the time that the UIT “Expires” (at which time all the assets are liquidated and all value (minus the 3% management fee collected by Verve Financial Services) are distributed to its owners as a final dividend, which if all goes well, should be more than what was paid for the shares in the first place. Despite this, we will occasionally perform NAV calculations for the benefit of the holders of this investment product, but these calculations will not be performed as often as for other types of funds (ETF’s or Mutual Funds).

Business Strengths

Extensive financial analysis and business management, as well as extremely successful and profitable investment experience of the management staff. A strong sense of ethics, a desire to maintain my reputation, as well as my understanding of not only the economics but also the emotional drivers behind market behavior will also benefit our the investors who are interested in this investment product.

Use of Capital

Being intended to generate income, this UIT will focus on using all capital gained in its IPO process and over its expenses (3% of capital raised is retained by ACE, and an additional 2% is retained by Verve Financial Services for setting up and managing this trust, will be used to purchase stocks that have a record of paying the highest dividends for their cost. All dividends collected each month of the life of this trust (minus 3% of the dividend income to help cover management costs) will be paid back out to the holders of each of the trusts units. On the expiration date (June 30th 2009), the trust will expire and all of its assets will be liquidated over the ensuing 10 days, with the proceeds (-3% of profits that may have been generated above the original asset value of said trust at time of its creation being paid to Verve Financial Services to cover the costs associated with its expiration) will be paid out in full to the holders of each unit of the trust. If a new trust is started at that date, the investors will have the option to “roll-over” their proceeds into the new UIT at that time.

Risk Factors

Any investment has risk, and it is highly recommended that no one invest in this or any other investment if they cannot afford to lose those invested funds. However as compared to other investments, ETF’s in the real world have proven to be a very stable and safe investment, especially those that are set up as Index ETF’s due to the stability of such a broad base of companies. The biggest risk would be if Linden Labs closes or shuts down the SL exchanges or shuts down Second Life as a virtual environment, or with this particular fund if one or more of the exchanges that the stocks that make up the UIT trade on were to close down, or if one or more of the companies that make up the UIT were to close down.

Management

As explained at the beginning of the Chairman’s Letter, I have an extensive and background and experience within the investment (27 years), financial (20 years), and business fields (20 years). Any additional staff members or management added to Verve Financial Services will need to prove their trustworthiness prior to having access to any funds that are managed by Verve Financial Services, as theft of such funds would be devastating to our company, which has a very bright future as we prove our abilities and help the investment public to increase their wealth.