[O L S H A N LOGO OMITTED] May 1, 2006 United States Securities and Exchange Commission Division of Corporation Finance Mail Stop 3720 100 F. Street, N.E. Washington, D.C. 20549 Attn: Larry Spirgel Assistant Director RE: RELATIONSERVE MEDIA, INC. REGISTRATION STATEMENT ON FORM SB-2 FILED MARCH 20, 2006 FILE NO. 333-132586 PRELIMINARY INFORMATION STATEMENT ON SCHEDULE 14C FILED MARCH 24, 2006 FILE NO. 0-51702 Dear Mr. Spirgel: We are securities counsel to RelationServe Media, Inc. (the "Company") and are submitting, on behalf of the Company, its responses to the comment letter from the Division of Corporation Finance, dated April 19, 2006, relating to the filing of the Company's Registration Statement on Form SB-2 (the "Registration Statement") and Preliminary Information Statement on Schedule 14C (the "Information Statement"). The Company's responses are numbered to correspond to the Staff's comments and are filed together with Amendment No. 1 to Registration Statement on Form S-2 (the "Amended Registration Statement"), which amends the Company's Registration Statement filed March 20, 2006. The Company will address the Staff's comments to the Information Statement in a separate correspondence. May 1, 2006 Page 2 FORM SB-2 --------- PROSPECTUS COVER PAGE - --------------------- 1. IN YOUR RESPONSE LETTER, TELL US WHY THE NUMBER OF SHARES BEING OFFERED ON THE COVER PAGE OF THE PROSPECTUS IS LESS THAN THE NUMBER OF SHARES YOU HAVE REGISTERED. The reason that the number of shares being offered on the cover page of the prospectus is less than the number of shares being registered is that the number of shares being registered represents: (1) an additional 25% of shares (or an aggregate of 5,825,000 shares) underlying additional debentures that the Debenture holders have the option of purchasing until May 4, 2006 ("Additional Debentures"), and (2) an additional 30% of shares (or an aggregate of 11,913,959 shares) underlying the debentures, Additional Debentures, warrants issued to Debenture holders, shares acquired by Debenture holders upon exercise of their warrants and shares issued directly to the Debenture holders, as required by the Registration Rights Agreement with the Debenture holders. The Staff is advised that in the initial filing the Prospectus cover page did include the additional 30% of shares. 2. YOU CURRENTLY DEFINE TERMS SUCH AS SELLING STOCKHOLDERS AND COMMON STOCK THAT ARE COMMONLY UNDERSTOOD. PLEASE REMOVE THE DEFINED TERMS FROM YOUR PROSPECTUS COVER PAGE. IN ADDITION, AVOID USING DEFINED TERMS IN THE PROSPECTUS SUMMARY. We have removed the commonly understood defined terms from the prospectus cover page and revised the Prospectus Summary to avoid using defined terms. 3. PLEASE REMOVE YOUR PARENTHETICAL BEGINNING "EXCEPT PURSUANT TO A TRANSACTION EXEMPT..." FROM THE LEGEND REQUIRED BY ITEM $01(A)(10) OF REGULATION S-B. The parenthetical has been removed in accordance with the Staff's comment. OVERVIEW. PAGE 2 - ---------------- 4. PLEASE PROVIDE A BRIEF EXPLANATION OF THE CHANGES TO THE COMPANY IN THE LAST YEAR. FOR EXAMPLE, DISCUSS THE FOLLOWING, IF TRUE: o UNTIL JUNE 2005, THE COMPANY WAS NAMED CHUBASCO RESOURCES, INC., WHICH WAS AN EXPLORATION STAGE COMPANY ENGAGED IN THE BUSINESS OF MINERAL EXPLORATION IN BRITISH COLUMBIA. o ON JUNE 13, 2005, RELATIONSERVE MEDIA ENGAGED IN A REVERSE ACQUISITION WITH CHUBASCO RESOURCES TO BECOME A REPORTING COMPANY. AS A RESULT OF THE REVERSE May 1, 2006 Page 3 ACQUISITION, THERE WAS A CHANGE IN CONTROL OF THE COMPANY, AND THE BUSINESS AND MANAGEMENT OF RELATIONSERVE MEDIA BECAME THE BUSINESS AND MANAGEMENT OF THE COMPANY. o RELATIONSERVE MEDIA HAD NO BUSINESS OR ASSETS UNTIL IT ACQUIRED THE BUSINESSES OF RELATIONSERVE ACCESS AND FRIENDSAND.COM FROM OMNI POINT IN MAY 2005. THESE ARE JUST EXAMPLES. PLEASE HIGHLIGHT, IN A MANNER THAT IS EASY TO UNDERSTAND, THE SIGNIFICANT CHANGES TO THE COMPANY AND ITS BUSINESS IN THE LAST YEAR. PROVIDE MORE DETAILED DISCLOSURE REGARDING THE DEVELOPMENT OF THE COMPANY IN OTHER PARTS OF THE PROSPECTUS, SUCH AS MANAGEMENT'S DISCUSSION AND ANALYSIS AND YOUR BUSINESS SECTION. WHEN PROVIDING MORE DETAILED DISCLOSURE, DRAFT IT IN A MANNER THAT IS LESS LEGALISTIC AND MORE UNDERSTANDABLE TO AN INVESTOR. The Overview section in the Prospectus Summary has been revised to provide a corporate history. Similar changes have been made in the Business section. 5. PLEASE BRIEFLY DESCRIBE THE "VARIOUS MARKETING AND ADVERTISING BUSINESSES" THAT YOU OPERATE. PROVIDE SUFFICIENT INFORMATION SO THAT INVESTORS UNDERSTAND WHAT YOUR BUSINESSES ENTAIL, WHO YOUR CUSTOMERS ARE AND HOW YOU GENERATE REVENUE. The second paragraph of the Prospectus Summary has been revised to describe the various marketing and advertising businesses that we operate. 6. PLEASE BALANCE YOUR DISCLOSURE BY DISCLOSING YOUR NET LOSS FOR 2005 AND YOUR ACCUMULATED DEFICIT AS OF DECEMBER 31, 2005. The Overview section has been revised to describe the net loss on a pro forma basis. We do not believe that disclosure of the accumulated deficit balances the disclosure since the Company had a slight profit in the fiscal year ended December 31, 2004 and historically the Company and SendTec were unrelated entities. BACKGROUND OF THE SENDTEC ACQUISITION. PAGE 2 7. BRIEFLY DISCLOSE WHY YOU AMENDED THE ASSET PURCHASE AGREEMENT AND STRUCTURED THE ACQUISITION SO THAT YOU ASSIGNED YOUR RIGHTS UNDER THE AGREEMENT TO STAC, HAD STAC ISSUE DEBENTURES CONVERTIBLE INTO YOUR COMMON STOCK, AND AGREED TO "LEGAL AND STRUCTURAL LIMITATIONS IMPOSED UNDER THE DEBENTURES" THAT REQUIRED YOU TO OPERATE SENDTEC SEPARATELY FROM YOUR OTHER BUSINESSES UNTIL THE CONSOLIDATION DATE. PROVIDE MORE DETAILED DISCLOSURE REGARDING THESE MATTERS IN MANAGEMENT'S DISCUSSION AND ANALYSIS AND YOUR BUSINESS SECTION. FOCUS ON DISCUSSING THE REASONS May 1. 2004 Page 3 FOR THE TRANSACTIONS RATHER THAN MERELY RECITING THE STEPS OF THE TRANSACTION AS SET FORTH IN THE GOVERNING DOCUMENTS. The first paragraph of the Background section has been revised to describe the reasons why the Asset Purchase Agreement was amended and structured so that the Company's rights were assigned to STAC. We have also added disclosure to "Business - Background of the SendTec Acquisition." RATIONALIZATION PLAN. PAGE 2 - ---------------------------- 8. PLEASE BRIEFLY DISCLOSE THE SPECIFIC SENIOR MANAGEMENT CHANGES THAT OCCURRED. The first paragraph of the Rationalization Plan has been revised to disclose the specific senior management changes that occurred. 9. CLEARLY DISCLOSE HERE AND THROUGHOUT THE PROSPECTUS WHETHER YOU DEFAULTED, OR ARE CURRENTLY IN DEFAULT, OF THE COVENANTS UNDER THE DEBENTURES. PROVIDE A DETAILED DISCUSSION OF THE FINANCIAL COVENANTS UNDER THE DEBENTURES AND ANY DEFAULTS IN MANAGEMENT'S DISCUSSION AND ANALYSIS, AND PROVIDE A CROSS-REFERENCE TO THIS DETAILED DISCUSSION IN THE SUMMARY. IN MANAGEMENT'S DISCUSSION AND ANALYSIS, CLARIFY WHY YOU AMENDED APPARENT PERFORMANCE COVENANTS IN 2006 FOR PERFORMANCE REQUIREMENTS IN 2005. IN ADDITION, CLARIFY WHETHER YOU DEFAULTED, OR WOULD HAVE DEFAULTED UNDER THE DEBENTURES AND RELATED AGREEMENT IF THEY WERE NOT AMENDED. FURTHERMORE, DESCRIBE THE COVENANTS AND THE AMENDMENTS TO THE COVENANTS. SEE SECTION IV.C. OF OUR GUIDANCE IN SEC RELEASE NO. 33-8350 "COMMISSION GUIDANCE REGARDING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," AVAILABLE ON OUR WEBSITE AT HTTP://WWW.SEC.GOV/RULES/INTEM/33-8359.HTM. More detailed disclosure has been provided in the second paragraph of the Rationalization Plan, as well as in the third and fourth paragraphs of "Liquidity and Capital Resources" for RelationServe. We have also added a new risk factor: "We were required to amend covenants in the Debentures to ensure that we were not in default and may in the future be required to seek covenant credits, based upon the Company's Rationalization Plan, among other factors." 10. BRIEFLY DISCLOSE WHY THERE IS INCREASED REGULATORY AND PUBLIC SCRUTINY OF THE INDUSTRY IN WHICH FRIENDSAND OPERATES. The disclosure in the second paragraph of the Rationalization Plan has been revised to detail why there is increased regulatory and public scrutiny of the industry. May 1, 2006 Page 5 THE OFFERING., PAGE 3 - --------------------- 11. PLEASE DISCLOSE THE PERCENTAGE OF OUTSTANDING SHARES THAT THE SHARES BEING OFFERED REPRESENT. Disclosure has been provided in accordance with the Staff's comment. RISK FACTORS. PAGE 3 - -------------------- IF AN EVENT OF DEFAULT OCCURS UNDER THE DEBENTURES .. 5 - --------------------------------------------------------- 12. YOU STATE IN YOUR SUMMARY THAT YOU "RECOGNIZED THAT CERTAIN FINANCIAL COVENANTS . . . WOULD LIKELY NOT BE MET DURING THE FOURTH QUARTER OF 2005, AND POSSIBLY THEREAFTER . .." PLEASE REVISE THIS RISK FACTOR OR PROVIDE A NEW RISK FACTOR TO MORE SPECIFICALLY DISCUSS WHICH COVENANTS YOU BELIEVED WOULD NOT BE MET AND PLEASE EXPLAIN WHY. PLEASE DESCRIBE THE DEFAULT PROVISIONS AND ANY DEFAULTS UNDER THESE COVENANTS. A new Risk Factor ("We are required to amend covenants in the Debentures to ensure that we were not in default and may in the future be required to seek covenant credits based upon the Company's Rationalization Plan among other factors") has been added to more specifically discuss which financial covenants the Company believed would not be met. THE RESTRICTIONS ON OUR ACTIVITIES CONTAINED IN THE DEBENTURES . . . PAGE 6 - ---------------------------------------------------------------------------- 13. PLEASE CLARIFY WHAT IS "PERMITTED INDEBTEDNESS" SO THAT INVESTORS CAN BETTER ASSESS THE EXTENT TO WHICH YOU COULD INCUR ADDITIONAL INDEBTEDNESS. The above Risk Factor has been revised to clarify what is "permitted indebtedness". WE MAY BE ABLE TO ATTRACT AND RETAIN KEY EMPLOYEES, PAGE 6 - ----------------------------------------------------------- 14. PLEASE EXPAND THIS DISCLOSURE TO ADDRESS THE PERSONNEL PROBLEMS YOU HAVE FACED, AS DESCRIBED IN THE SUMMARY. This Risk Factor has been revised to address the personnel problems that the Company faces. May 1, 2006 Page 6 EFFECT OF OUTSTANDING WARRANTS, OPTIONS AND CONVERTIBLE DEBENTURES, PAGE 20 - --------------------------------------------------------------------------- 15. PLEASE PROVIDE A MORE DESCRIPTIVE CAPTION FOR THIS RISK FACTOR THAT HIGHLIGHTS THE RISK. IN ADDITION, SPECIFICALLY ADDRESS IN THIS RISK FACTOR THE POTENTIAL IMPACT ON THE PRICE OF YOUR COMMON STOCK OF THE REGISTERED OFFERING OF UP TO 84,671,853 SHARES OF COMMON STOCK. The heading in this Risk Factor has been made more descriptive. In addition, the Risk Factor has been revised to discuss the potential Risk Factor on the price of our common stock due to the registration statement. 16. WE NOTE YOUR REFERENCE TO THE RIGHT OF DEBENTURE HOLDERS TO PURCHASE ADDITIONAL DEBENTURES. PLEASE BRIEFLY DESCRIBE THIS RIGHT AND UNDER WHAT CIRCUMSTANCES DEBENTURE HOLDERS MAY EXERCISE THIS RIGHT. PROVIDE MORE DETAILED DISCLOSURE REGARDING THIS RIGHT TO PURCHASE ADDITIONAL DEBENTURES IN AN APPROPRIATE SECTION LATER IN THE PROSPECTUS. IN ADDITION, TELL US IN YOUR RESPONSE LETTER WHETHER YOU ARE REGISTERING FOR RESALE ON THIS REGISTRATION STATEMENT THE SHARES INTO WHICH THESE ADDITIONAL DEBENTURES CONVERT. The right of debenture holders to purchase additional debentures has been added to the Risk Factor. This right expires on May 4, 2006 and to date no Debenture holder has exercised its right to purchase additional debentures. WE NEED TO AUTHORIZE ADDITIONAL SHARES SO THAT WE CAN REGISTER ...PAGE 20 - ------------------------------------------------------------------------- 17. DISCLOSE HOW MANY SHARES YOU HAVE OUTSTANDING AND THE NUMBER OF SHARES YOU HAVE RESERVED FOR ISSUANCE FOR THE EXERCISE OR CONVERSION OF YOUR OUTSTANDING OPTIONS, WARRANTS AND DEBENTURES AND ANY ADDITIONAL OPTIONS OR DEBENTURES THAT YOU MAY ISSUE UNDER THE TERMS OF YOUR STOCK OPTION PLANS OR DEBENTURES. IN THIS REGARD, YOU STATE THAT YOU HAVE SUFFICIENT SHARES FOR THESE PURPOSES; HOWEVER, IN YOUR PRELIMINARY INFORMATION STATEMENT, IT APPEARS THAT YOU HAVE 98,058,414 SHARES THAT ARE EITHER OUTSTANDING OR RESERVED FOR THESE PURPOSES. PLEASE CLARIFY HERE AND IN YOUR PRELIMINARY INFORMATION STATEMENT, IF TRUE, THAT YOU WOULD NEED TO INCREASE THE AMOUNT OF YOUR AUTHORIZED SHARES REGARDLESS OF THE PROVISION TO REGISTER 130% OF THE SHARES OF COMMON STOCK THAT THE DEBENTURE HOLDERS ARE ENTITLED TO IF THEY WERE TO EXERCISE ALL OF THE WARRANTS AND DEBENTURES THAT THEY ARE ENTITLED. ALSO, DISCLOSE THE UNDERLYING REASON FOR THE REQUIREMENT TO REGISTER 130% OF THE SHARES OF COMMON STOCK THAT THE DEBENTURE HOLDERS CURRENTLY HOLD OR ARE ENTITLED TO UPON THE EXERCISE OR CONVERSION OF ALL WARRANTS OR DEBENTURES THAT THEY CURRENTLY HOLD. Disclosure has been added in this risk factor to state the number of shares reserved for issuance for the exercise or conversion of outstanding options, warrants and debentures as well May 1, 2006 Page 7 as additional debentures, warrants and options that we are required to issue under the terms of the Company's stock option plans or debentures. The right to purchase such additional Debentures expires on May 4, 2006, and the Staff is advised that the Company does not anticipate that any of such additional Debentures will be purchased. With respect to the Company's stock plans, it had been the Company's intention that the 2006 Stock Incentive Pan would be approved at the same time as the proposal to approve the increase in authorized capital. Accordingly, until May 4, 2006, the Company will reduce the number of shares reserved for issuance under such plan. The Staff is advised that the Company has only granted options to purchase 200,000 shares under the 2006 Stock Incentive Plan and accordingly the Company has enough authorized capital to cover both its issued and outstanding shares as well as the shares underlying all outstanding options, debentures and warrants. The Company still needs to have Stockholder approval to increase its authorized capital in order to have sufficient shares reserved to cover the requirement to register 130% of the shares that the Debenture holders are entitled to receive. Such provision was based on negotiations with the holders of the Debentures and is intended to provide anti-dilution protection for the Debenture holders. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RELATIONSERVE'S FINANCIAL CONDITION AND - ------------------------------------------------------------------------------- RESULTS OF OPERATION. PAGE 24 - ----------------------------- 18. PLEASE INCLUDE AN INTRODUCTION TO PROVIDE A BALANCED, EXECUTIVE-LEVEL DISCUSSION THAT IDENTIFIES THE MOST IMPORTANT THEMES OR OTHER SIGNIFICANT MATERS WITH WHICH MANAGEMENT IS CONCERNED PRIMARILY IN EVALUATING YOUR FINANCIAL CONDITION AND OPERATING RESULTS. SUCH TOPICS COULD INCLUDE: o ECONOMIC OR INDUSTRY-WIDE FACTORS RELEVANT TO THE COMPANY; o HOW THE COMPANY EARNS REVENUES AND INCOME AND GENERATES CASH; o THE COMPANY'S LINES OF BUSINESS, LOCATIONS OF OPERATIONS AND PRINCIPAL PRODUCTS AND SERVICES, WITHOUT BEING REPETITIVE OF THE BUSINESS SECTION OR DISCLOSURE ELSEWHERE IN THE PROSPECTUS; AND o THE MATERIAL OPPORTUNITIES, CHALLENGES AND RISKS THAT MANAGEMENT ARE MOST FOCUSED ON FOR THE SHORT AND LONG TERM, AS WELL AS ACTIONS THAT THEY ARC TAKING TO ADDRESS THESE OPPORTUNITIES, CHALLENGES AND RISKS. FOR EXAMPLE, YOU APPEAR TO BE FOCUSED ON YOUR RATIONALIZATION PLAN RELATED TO THE SENDTEC ACQUISITION AND YOU REFER TO A DOWNTURN IN RELATIONSERVE'S BUSINESS AND REGULATORY AND PUBLIC SCRUTINY IN FRIENDSAND'S INDUSTRY. PLEASE CONSIDER DISCUSSING THESE CHALLENGES AS WELL AS THE ACTIONS YOU ARE TAKING TO ADDRESS THEM. SEE SECTION III.A. OF OUR GUIDANCE IN SEC RELEASE NO. 33-8350 "COMMISSION GUIDANCE REGARDING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS." PLEASE SIMILARLY REVISE SENDTEC'S MANAGEMENT'S DISCUSSION AND ANALYSIS SECTION. May 1, 2006 Page 8 An introduction has been added to the beginning of Management's Discussion and Analysis for both RelationServe and SendTec in accordance with the Staff's comment. LIQUIDITY AND CAPITAL RESOURCES. PAGE 27 - ---------------------------------------- 19. REVISE THIS DISCUSSION TO DISCLOSE THE SPECIFIC COMPONENTS AND AMOUNT OF FUNDS THAT YOU WILL NEED TO CONTINUE OPERATING FOR THE NEXT TWELVE MONTHS. DISCUSS ALSO YOUR SPECIFIC PLAN FOR GENERATING SUFFICIENT REVENUES AND SUFFICIENT CASH TO GENERATE THESE FUNDS. DISCUSS YOUR CURRENT AND PLANNED SOURCES OF REVENUE. COMPARE ASSURED AVAILABLE RESOURCES TO YOUR EXPECTED SHORT-TERM AND LONG-TERM CAPITAL REQUIREMENTS. ALSO, DISCUSS ANY KNOWN TRENDS OR UNCERTAINTIES THAT HAVE OR ARE REASONABLY LIKELY TO HAVE A MATERIAL IMPACT ON YOUR SHORT-TERM OR LONG-TERM LIQUIDITY. SEE ITEM 303(B)(1)(I) OF REGULATION S-B. PLEASE SIMILARLY REVISE SENDTEC'S LIQUIDITY AND RESOURCES SECTION. The discussion in Liquidity and Capital Resources for both RelationServe and SendTec has been revised in accordance with the Staff's comment. DESCRIPTION OF BUSINESS. PAGE 35 - -------------------------------- BACKGROUND OF THE SENDTEC ACQUISITION, PAGE 36 - ---------------------------------------------- 20. EXPAND YOUR DISCUSSION OF THE SENDTEC ACQUISITION TO DISCUSS EACH OF THE AGREEMENTS YOU ENTERED INTO RELATING TO THE TRANSACTION. IN THIS REGARD, IT IS DIFFICULT TO FOLLOW THE PROGRESSION OF THE TRANSACTION FROM THE TIME YOU ENTERED INTO THE ASSET PURCHASE AGREEMENT IN AUGUST 2005. PLEASE CLARIFY WHAT AGREEMENTS YOU ENTERED INTO IN OCTOBER 2005 AND IN FEBRUARY 2006, AND DESCRIBE ANY AGREEMENTS THAT WERE AMENDED AND EXPLAIN WHY THE TERMS WERE AMENDED. This section has been revised to discuss the agreements entered into relating to the SendTec acquisition. The Section has also been revised to clarify what agreements were entered into in October 2005 in February 2006 and to describe any agreements that were amended. SENDTEC BUSINESS. PAGE 37 - ------------------------- 21. PLEASE DESCRIBE YOUR ARRANGEMENTS WITH YOUR CUSTOMERS. FOR EXAMPLE, DO YOU ENTER INTO AGREEMENTS WITH THEM TO PROVIDE THE SERVICES YOU DESCRIBE? IN YOUR RISK FACTORS, YOU DISCLOSE THAT TWO OF SENDTEC'S CLIENTS ACCOUNTED FOR 43.8% OF ITS TOTAL REVENUES IN 2005. DISCLOSE THE IDENTITY OF THESE CUSTOMERS AND DESCRIBE ANY AGREEMENTS YOU HAVE WITH THEM. YOU ALSO DESCRIBE IN YOUR RISK FACTORS THAT "MOST OF SENDTEC'S SERVICES ARE OFFERED TO ADVERTISERS BASED ON COST-PER-ACTION OR COST-PER- May 1, 2006 Page 9 CLICK PRICING MODELS .. ." PLEASE DESCRIBE THESE PRICING MODELS IN THIS SECTION. ALSO, DO YOU PROVIDE LISTS OF EMAIL ACCOUNTS OF INDIVIDUALS TO YOUR CUSTOMERS SO THAT THEY CAN SEND DIRECT ADVERTISEMENTS TO THEM? IF SO, ARE A LARGE PORTION OF THE EMAILS SENT TO THESE EMAIL ACCOUNTS FILTERED SINCE IT APPEARS THIS WOULD BE CONSIDERED "SPAM?" PLEASE REVISE YOUR DISCLOSURE ACCORDINGLY TO DESCRIBE YOUR BUSINESS SO THAT INVESTORS CAN UNDERSTAND HOW YOU GENERATE REVENUE AND THE SPECIFIC ARRANGEMENTS YOU HAVE WITH YOUR CUSTOMERS. The SendTec business section has been revised to provide more detailed disclosure in accordance with the Staff's comments. LEGAL PROCEEDINGS. PAGE 41 - -------------------------- 22. PLEASE DISCLOSE THE COURT WHERE EACH OF THE COMPLAINTS WERE FILED. SEE ITEM 103 OF REGULATION S-B. IN ADDITION, FOR EACH OF THE LEGAL PROCEEDINGS YOU DISCLOSE, PLEASE EXPAND YOUR DISCLOSURE TO PROVIDE SUFFICIENT FACTUAL CONTEXT UNDERLYING THE CASES. FOR EXAMPLE, IT IS UNCLEAR WHY INFOLINK HAS ALLEGED THAT YOU AND ONUUPOINT HAVE BREACHED A LICENSING AGREEMENT AND VIOLATED THE CAN SPAM ACT OF 2003. AS ANOTHER EXAMPLE, IT IS UNCLEAR WHY BOSTON MERIDIAN BELIEVES IT IS ENTITLED TO THE $917,302 IN FESS AND 100,000 SHARES OF COMMON STOCK RELATING TO THE SENDTEC ACQUISITION. PLEASE REVISE YOUR DISCLOSURE ACCORDINGLY. The Legal Proceedings section has been revised to indicate which court each of the complaints were filed. In addition, such section has been expanded to provide more factual context underlying the cases. 23. IT IS UNCLEAR WHY YOU HAVE INCLUDED THE LAST PARAGRAPH IN THIS SECTION REGARDING THE ISSUANCE OF 525,000 SHARES OF COMMON STOCK TO THE DEBENTURE HOLDERS. PLEASE REVISE TO PROVIDE SUFFICIENT DISCLOSURE. The above disclosure has been deleted. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, PAGE 56 - ------------------------------------------------------- 24. WE NOTE YOUR DISCLOSURE REGARDING YOUR AGREEMENT WITH LEHMAN BROTHERS AND LB 1 GROUP AND YOUR STATEMENT THAT, ON FEBRUARY 3, 2006, LEHMAN ADVISED YOU THAT IT DID NOT CURRENTLY INTEND TO EXERCISE ITS RIGHT TO DESIGNATE A BOARD MEMBER. PLEASE CLARIFY WHAT RIGHTS UNDER THIS AGREEMENT, IF ANY, LEHMAN HAS EXERCISED. The rights of Lehman Brothers and LB I Group under the Company's agreement that have been exercised has been clarified. May 1, 2006 Page 10 25. WE NOTE THAT MR. BRAUSER HAS BEEN YOUR CHAIRMAN SINCE OCTOBER 2005. PLEASE DISCLOSE THE DATE HE RECEIVED EACH OF THE PAYMENTS, THE SPECIFIC SERVICES HE PROVIDED AND WHAT EXPENSES WERE REIMBURSED. The date of the payments received by Mr. Brauser, the specific services that he provided and the expenses reimbursed have been added to Certain Relationships and Related Transactions. 26. PLEASE DISCLOSE THE MATERIAL TERMS OF THE AGREEMENTS WITH MESSRS. SOLTOFF, GOULD AND OBECK AND THE REASONS FOR ENTERING INTO THE AGREEMENTS. IN ADDITION, PLEASE CLARIFY HOW THE PARENTHETICAL REGARDING THE PERCENTAGE OF STAC COMMON STOCK RELATES TO THE NUMBER OF SHARES OF COMPANY COMMON STOCK ISSUED TO STAC MANAGEMENT. The material terms of the agreements with Messrs. Soltoff, Gould and Obeck and the reasons for entering into the agreements have been added to Certain Relationships and Related Transactions. 27. DESCRIBE YOUR ARRANGEMENT WITH CFO ONCALL, INCLUDING COMPENSATION ARRANGEMENTS FOR MR. WASSERMAN'S SERVICES. IN ADDITION, PLEASE DISCLOSE HERE AND UNDER MR. WASSERMAN'S BIOGRAPHY WHETHER MR. WASSERMAN WORKS FULL-TIME AS YOUR PRINCIPAL FINANCIAL OFFICER. IF NOT, DISCLOSE THE AMOUNT OF TIME HE DEVOTES TO THE COMPANY. IN THIS REGARD, WE NOTE THAT MR. WASSERMAN IS THE CHIEF EXECUTIVE OFFICER THE CFO ONCALL. A description of the arrangement with CFO OnCall has been added. In addition, we have added disclosure relating to the compensation arrangement for Mr. Wasserman's services as well as the amount of time that he devotes to the Company. The Company intends Mr. Wasserman's engagement to end during 2006. SELLING STOCKHOLDERS, PAGE 57 - ----------------------------- 28. WE NOTE YOUR DISCLOSURE THAT "[E]ACH OF THE SELLING STOCKHOLDERS HAS ACQUIRED HIS, HER OR ITS SHARES SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR RESALE OR DISTRIBUTION OF SUCH SECURITIES." PLEASE ALSO SPECIFICALLY STATE, IF TRUE, THAT EACH SELLING STOCKHOLDER THAT IS AN AFFILIATE OF A BROKER-DEALER PURCHASED IN THE ORDINARY COURSE OF BUSINESS AND, AT THE TIME OF THE PURCHASE OF THE SECURITIES TO BE RESOLD, THE SELLING STOCKHOLDER HAD NO AGREEMENTS OR UNDERSTANDINGS, DIRECTLY OR INDIRECTLY, WITH ANY PERSON TO DISTRIBUTE THE SECURITIES. WE NOTE YOU HAVE MADE THESE STATEMENTS WITH REGARD TO LB I GROUP IN FOOTNOTE 1; HOWEVER, YOU SHOULD PROVIDE SIMILAR STATEMENTS FOR ALL BROKER-DEALER AFFILIATES WHO ARE SELLING SHAREHOLDERS. IF May 1, 2006 Page 11 ANY OF THE SELLING STOCKHOLDERS ARE REGISTERED BROKER-DEALERS, PLEASE NAME ANY SUCH SELLING STOCKHOLDER AS AN UNDERWRITER. Based upon representations from investors, the Staff is advised that to the best of the Company's knowledge, none of the selling shareholders other than LB I Group is a broker-dealer or an affiliate of a broker dealer. 29. FOR EACH ENTITY LISTED IN THE TABLE, DISCLOSE THE NATURAL PERSON(S) WHO HAVE SOLE OR SHARED VOTING OR INVESTMENT CONTROL OVER THE RELATIONSERVE MEDIA SHARES THAT EACH ENTITY OWNS. Based upon representations from investors, disclosure has been added to indicate to the Company's knowledge which natural persons who have sole or shared voting or investment control over the Company's shares that each entity owns. Please note that this information may be updated in future filings. 30. DISCLOSE ANY POSITION, OFFICE, OR OTHER MATERIAL RELATIONSHIP WHICH ANY OF THE SELLING STOCKHOLDERS HAVE HAD WITH YOU, YOUR PREDECESSORS OR AFFILIATES WITHIN THE PAST THREE YEARS. SEE ITEM 507 OF REGULATION S-B. Based upon representations from investors, the material relationships with the selling shareholders have been disclosed. DESCRIPTION OF SECURITIES, PAGE 69 - ---------------------------------- 31. IN THE FIRST PARAGRAPH, DISCLOSE THE NUMBER OF SHARES OF COMMON STOCK THAT WILL BE OUTSTANDING ASSUMING THAT ALL OF THE SECURITIES BEING OFFERED ARE SOLD. Disclosure has been added in accordance with the Staff's comment. WHERE YOU CAN FIND MORE INFORMATION, PAGE 73 - -------------------------------------------- 32. PLEASE REVISE THE ADDRESS OF THE SEC'S PUBLIC REFERENCE ROOM TO REFLECT OUR NEW LOCATION AT 100 F STREET, N.E., WASHINGTON, D.C. 20549. The requested change has been made. May 1, 2006 Page 12 PRELIMINARY INFORMATION STATEMENT ON SCHEDULE 14C ------------------------------------------------- 33. TO THE EXTENT THAT COMMENTS ON YOUR FORM SB-2 APPLY TO YOUR PRELIMINARY INFORMATION STATEMENT, PLEASE REVISE ACCORDINGLY. The Company will address comments related to the Company's preliminary Information Statement in a separate response. 34. WE NOTE THAT YOUR NAME CHANGE IS RELATED TO THE SENDTEC TRANSACTION AND WE NOTE YOUR DISCLOSURE IN THE FORM SB-2 UNDER THE RISK FACTOR ENTITLED "WE NEED TO AUTHORIZE ADDITIONAL SHARES SO THAT YOU CAN REGISTER ALL OF THE SHARES THAT [YOU] ARE REQUIRED TO REGISTER . ." THAT "THE TERMS OF [YOUR] SECURITIES PURCHASE AGREEMENT WITH THE DEBENTURE HOLDERS REQUIRES [YOU] TO REGISTER 130% OF THE SHARES OF COMMON STOCK THAT THEY ARE ENTITLED TO . . . CURRENTLY, WE DO NOT HAVE SUFFICIENT AUTHORIZED COMMON STOCK TO COVER SUCH REGISTRATION." BECAUSE THESE PROPOSALS ARC DIRECTLY RELATED TO THE SENDTEC ACQUISITION, IT APPEARS THAT YOU ARE REQUIRED TO PROVIDE THE INFORMATION REQUIRED BY ITEMS 13 AND 14 OF SCHEDULE 14A. SEE ITEM 1 OF SCHEDULE 14C AND NOTE A OF SCHEDULE 14A. PLEASE PROVIDE THE INFORMATION REQUIRED BY ITEMS 13 AND 14 OR TELL US IN YOUR RESPONSE LETTER WHY YOU DO NOT BELIEVE THIS INFORMATION IS REQUIRED. The Company will address comments related to the Company's preliminary Information Statement in a separate response. INFORMATION ON CONSENTING STOCKHOLDERS, PAGE 2 - ---------------------------------------------- 35. PLEASE PROVIDE THE INFORMATION IN YOUR TABLE REGARDING THE SHAREHOLDERS THAT HAVE CONSENTED. PLEASE ALSO TELL US IN YOUR RESPONSE LETTER WHAT EXEMPTION FROM THE PROXY RULES WAS RELIED UPON FOR THE CONSENT. The Company will address comments related to the Company's preliminary Information Statement in a separate response. ACTION 1 INCREASE IN OUR AUTHORIZED CAPITAL, PAGE 5 - --------------------------------------------------- 36. PLEASE CLEARLY DISCLOSE IN TABLES THE FOLLOWING INFORMATION: o AS OF THE MOST RECENT DATE, THE NUMBER OF ISSUED SHARES, THE NUMBER OF AUTHORIZED BUT UNISSUED SHARES THAT ARE RESERVED FOR SPECIFIC PURPOSES (IDENTIFYING EACH SPECIFIC PURPOSE), AND THE NUMBER OF AUTHORIZED BUT UNRESERVED SHARES; AND May 1, 2006 Page 13 o ASSUMING THE PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES IS APPROVED, THE NUMBER OF ISSUED SHARES, THE NUMBER OF AUTHORIZED BUT UNISSUED SHARES THAT ARE RESERVED FOR SPECIFIC PURPOSES (IDENTIFYING EACH SPECIFIC PURPOSE), AND THE NUMBER OF AUTHORIZED BUT UNRESERVED SHARES. DISCLOSE THAT, IF THE INCREASE IN AUTHORIZED SHARES IS APPROVED, THE BOARD OF DIRECTORS MAY ISSUE THE ADDITIONAL AUTHORIZED SHARES WITHOUT ANY FURTHER SHAREHOLDER APPROVAL. The Company will address comments related to the Company's preliminary Information Statement in a separate response. ACTION 1 INCREASE IN OUR AUTHORIZED CAPITAL, PAGE 5 - --------------------------------------------------- ACTION 2 CHANGE OF OUR CORPORATE NAME, PAGE 6 - --------------------------------------------- 37. IMMEDIATELY PRIOR TO THESE PROPOSALS, PLEASE PROVIDE INVESTORS WITH A MORE COMPREHENSIVE SUMMARY OF THE SENDTEE ACQUISITION INCLUDING, FOR EXAMPLE, THE CHANGES IN YOUR BOARD AND MANAGEMENT SO THAT INVESTORS UNDERSTAND THE FUNDAMENTAL CHANGES IN YOUR BUSINESS THAT HAVE OCCURRED AND HAVE ADDITIONAL CONTEXT REGARDING THE APPROVAL OF THESE CORPORATE ACTIONS. The Company will address comments related to the Company's preliminary Information Statement in a separate response. CLOSING For your convenience, under separate cover we will deliver to you: o four (4) marked copies of the Amended Registration Statement (compared to the Registration Statement filed on March 20, 2006); o four (4) clean copies of Amended Registration Statement. In addition please be advised that we have included as a separate correspondence a letter from the Company as requested. We welcome a further discussion on any of our points addressed within this response letter. Should you have any questions, please contact Kenneth Schlesinger at (212) 451-2252 or the undersigned at (212) 451-2259. May 1, 2006 Page 14 Very truly yours, /s/ Harvey J. Kesner ---------------------- Harvey J. Kesner cc: Donald Gould Adam Wasserman May 1, 2006 Page 15 bcc: Michael Brauser Paul Soltoff Steven Stowell Ed Hackert Nilene Evens Kenneth Schlesinger Mark Lakin Jonathan Deblinger
