January 11, 2017
Pamela Long
Assistant Director
Asia Timmons-Pierce
Staff Attorney
Dale Welcome
Staff Accountant
John Cash
Accounting Branch Chief
Re: | BioCrude Technologies USA, Inc. | |
Amendment No. 1 to Registration Statement on Form S-1 | ||
Filed December 28, 2016 | ||
File No. 333-214853 |
Dear Ms. Long:
This letter is in response to your comment letter of January 9, 2017.
Prospectus cover page
1. As requested in comment two of our letter dated December 15, 2016, please revise your cover page to clarify that all of the shares that the company is offering (the 20 million shares) will be sold at a fixed price of $1.75 for the duration of the offering. The company is not eligible to conduct an at-the-market offering and must therefore fix a price for all of the shares it sells. By contrast, selling stockholders may sell at market prices once a market for the shares exists. We note that you did revise your disclosure as requested in our comment on page 49 in the section entitled “By Our Company”.
Response: The registration statement has been revised to reflect the aforesaid, more particularly, the cover page.
2. Your prospectus cover page states that the offering will be conducted by officers and directors, yet you have provided for commissions on the cover page and in your use of proceeds section. Further, the notes to allocating 10% of the offering toward commissions. Please revise all disclosures to clarify whether you are engaging a broker-dealer at this time, and if so, identify the broker-dealer and clarify the basis of the underwriting. Otherwise, please remove references to allocating offering proceeds toward commissions. If the offering is being conducted by officers and directors only, then it appears that the amount that you allocate toward offering expenses in your use of proceeds table should be consistent with the expenses of the offering described in Part II of the registration statement. If, after the registration statement is effective and your offering is underway, you engage a broker-dealer, you would need to file a post-effective amendment to the registration statement to identify the broker-dealer and expenses at that time).
Response: Appropriately revised throughout the registration statement as no broker dealer has been engaged.
Use of Proceeds, page 10
3. Your use of proceeds at the 25% level does not add up to $7,875,000. In fact, we note that you have allocated more than this amount, $7,979,766, to operational activities alone. Please revise.
Response: The registration statement has been revised to adjust the use of proceeds at the 25% level to add up to the net proceeds amount in the section above.
Description of Business and Property, page 14
Company Milestones and Plan of Execution, page 29
4. We note your response to comment eight of our letter dated December 15, 2016. Please revise your disclosures to state the timeframe and status. For example, please revise your disclosures to clarify, if true, that Environmental Impacts Analysis has been completed.
Response: The registration statement has been revised to expand disclosures with respect to the status of works for the contractual obligations with the Government of the Autonomous Island of the Grand Comore, as well as the proposed agenda (sequence of events and timeframes) for the execution and realization of same.
Material Agreements, page 31
5. We note your response to comment six of our letter dated December 15, 2016. Please expand your disclosure to provide the material terms of each agreement such as each party’s rights and obligations, the duration of the agreement, payment obligations including any minimum payment obligations under your Put or Pay and Take or Pay arrangements, and termination provisions.
Response: The Material Agreements (Deed of Assignment pursuant to a Public-Private Partnership (PPP), the Power Purchase Agreement (PPA), and the MSW, Land and Supply of Treated Effluent Concession Agreements, Land Assignment and Treasury Guarantee) are being withheld pending the SEC’s determination of confidential status.
6. We note your response to comment six of our letter dated December 15, 2016. We note that you have only filed the certain pages of these agreements as exhibits. You have not properly submitted a confidential treatment request. Please file each agreement in its entirety with your next amendment. If you believe that confidential treatment of particular information is warranted, you may request confidential treatment pursuant to Rule 406 of the Securities Act by submitting a confidential treatment request to the Office of the Secretary. For guidance in preparing a confidential treatment request, please refer to Staff Legal Bulletin No. 1A (Feb. 28, 1997 with the July 11, 2001 addendum).
Response: The Material Agreements (Deed of Assignment pursuant to a Public-Private Partnership (PPP), the Power Purchase Agreement (PPA), and the MSW, Land and Supply of Treated Effluent Concession Agreements, Land Assignment and Treasury Guarantee) are being withheld pending the SEC’s determination of confidential status.
7. Please ensure that each agreement is filed as a separate exhibit and revise your exhibit index accordingly.
Response: The Material Agreements (Deed of Assignment pursuant to a Public-Private Partnership (PPP), the Power Purchase Agreement (PPA), and the MSW, Land and Supply of Treated Effluent Concession Agreements, Land Assignment and Treasury Guarantee) are being withheld pending the SEC’s determination of confidential status.
Plan of Distribution, page 48
By our Company, page 49
8. We note your response to comment 13 of our letter dated December 15, 2016 that Mr. Southworth meets the conditions of (a)(4)(ii). It does not appear that Mr. Southworth is an officer of the company so please revise your disclosures or tell us what role Mr. Southworth has in connection with the offering.
Response: The registration statement has been revised to correct the typo, noting that only officers and directors (Mr. John Moukas and Mr. Boris Baran, and not Mr. Southworth) will be offering and selling the shares on behalf of the company.
Summary Compensation Table, page 41
9. We note your response to comment 10 of our letter dated December 15, 2016. Please revise your footnote to clarify, if true, that the aggregate grant date fair value for the restricted stock awards was computed in accordance with FASB Topic 718. See Regulation S-K Item 402(n)(2)(v).
Response: The registration statement has been revised to disclose that the restricted stock awards were valued at the aggregate grant date fair value of the stock issued, in accordance with FASB Topic 718.
Very truly yours,
/s/ John Moukas, President
BioCrude Technologies USA, Inc.