November 12, 2004
Mail Stop 0510
via U.S. Mail and facsimile
Christopher Clemente
Chief Executive Officer
Comstock Homebuilding Companies, Inc.
11465 Sunset Hills Road, Suite 510
Reston, VA 20190
Re: Comstock Homebuilding Companies, Inc.
Form S-1/A (#2)
File No. 333-118193
Dear Mr. Clemente:
We have reviewed your filing and have the following comments. Where
indicated, we think you should revise your document in response to
these comments. If you disagree, we will consider your explanation as
to why our comment is inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation. In some of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is to assist
you in your compliance with the applicable disclosure requirements and
to enhance the overall disclosure in your filing. We look forward to
working with you in these respects. We welcome any questions you may
have about our comments or on any other aspect of our review. Feel
free to call us at the telephone numbers listed at the end of this
letter.
Risk Factors-Our significant level of debt.....; page 8
1. On page 12 you indicate that your debt outstanding, on a pro forma
as adjusted basis, is $74.6 million, representing 13.8% of your
shareholders` equity as of that date. Before giving effect to the
offering contemplated, your stockholders` equity, on a pro forma as
adjusted basis, is negative $220,000. Please tell us how you are
computing the 13.8%.
Corporate Consolidation; page 25-26
2. Under "Current Operations" on page 25 you provide certain
information related to the primary holding companies as of March 31,
2004. Please update this information.
Our Business; page 61
3. We note on page 61 that you have updated the percentage changes in
revenue and operating income; however, the backlog from home sales at
June 30, 2004 is reflected as $68.2 million. Please tell us why the
backlog would not be $70.4 million, representing the sum of backlog
amounts disclosed on F-25 and F-41.
Selected Financial and Other Data; page 40
4. On page 40 under your "Selected Financial and Other Information",
you disclose the historical basic and diluted earnings per share for
the six months ended June 30, 2003 as $107. Please tell us why the
amount disclosed for this period would not be $48?
MD&A-Results of Operations; page 48
5. Please provide additional disclosure concerning the nature of the
changes in "other income (expense), net" for the year ended December
31, 2003 compared to December 31, 2002. Investors may not be familiar
with activity "consistent with normal operations." In addition,
please provide quantitative disclosure, if material, of the components
representing the remaining $220,000 of changes in "other income
(expense), net for the year ended December 31, 2002 compared to
December 31, 2001. As indicated in our previous comment number 7,
please tell us why vendor credits would not be accounted for as an
adjustment of your inventoried cost of real estate for development and
sale?
Certain Transactions; page 88
6. On page 18 of the Risk Factors discussion and page 48 of MD&A, you
discuss weakness in your internal controls regarding approval and
documentation of related party transactions. Please consider
qualifying your statement in Certain Transactions on page 88 that you
believe all current related party transactions are on terms not less
favorable than terms obtainable from unaffiliated third parties to
reflect your disclosed weakness and recently implemented procedure for
approving these transactions.
Index to Financial Statements
7. Please amend your index to financial statements on F-1 to reflect
The Comstock Companies Statement of Stockholders` Equity as of June
30, 2004 instead of March 31, 2004. In addition, the Notes to Service
Corp`s financial statements should be "consolidated" not "combined
consolidated."
Financial Statements-The Comstock Companies; page F-6
8. We note your amended disclosure on F-13 of "total interest
incurred" for the six months ended June 30, 2004. Your disclosure
indicates for the period that you capitalized more interest than you
incurred. Please review and amend if necessary.
Financial Statements-Comstock Service Corp, Inc; page F-28
9. Please amend the footnote reference on Service Corp`s basic
financial statements on pages F-29 through F-32 by deleting "combined"
before consolidated.
As appropriate, please amend your registration statement in response
to these comments. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. Please understand that we may
have additional comments after reviewing your amendment and responses
to our comments.
We urge all persons who are responsible for the accuracy and adequacy
of the disclosure in the filings reviewed by the staff to be certain
that they have provided all information investors require for an
informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have
made.
Notwithstanding our comments, in the event the company requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such request,
acknowledging that:
? should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and
? the company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the Division
of Corporation Finance in connection with our review of your filing or
in response to our comments on your filing.
We will consider a written request for acceleration of the effective
date of the registration statement as a confirmation of the fact that
those requesting acceleration are aware of their respective
responsibilities under the Securities Act of 1933 and the Securities
Exchange Act of 1934 as they relate to the proposed public offering of
the securities specified in the above registration statement. We will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding requesting
acceleration of a registration statement. Please allow adequate time
after the filing of any amendment for further review before submitting
a request for acceleration. Please provide this request at least two
business days in advance of the requested effective date.
You may contact John Cash at (202) 942-5373 or Alfred Pavot at (202)
942-1764 if you have questions regarding comments on the financial
statements and related matters. Please contact Matt Franker at (202)
824-5495 or me at (202) 942-1950 with any other questions.
Sincerely,
Pamela Ann Long
Assistant Director
cc: Stephen A. Riddick, Esq. (via facsimile 202/331-3101)
Greenberg Traurig LLP
800 Connecticut Avenue, N.W.
Washington, DC 20006
Christopher Clemente
Comstock Homebuilding Companies, Inc.
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404
DIVISION OF
CORPORATION FINANCE