Mail Stop 0511
November 12, 2004
Vernon Samaroo, President
Southridge Enterprises Inc.
18523 - 98th Avenue
Edmonton, Alberta T5T 3E6
RE: Southridge Enterprises Inc. ("the company")
File No. 333-119729
Registration Statement on Form SB-2
Filed October 13, 2004
Dear Mr. Samaroo:
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.
Registration Statement Cover Page
1. Since these shares will be sold on a continuous basis, please
provide the Rule 415 language on the cover page and check the box. We
note the Item 512(a) undertakings in this regard.
Summary
2. The Net Loss information in the table should be presented in
brackets. In this regard, we note that these amounts are bracketed in
your financial statements.
Risk Factors
3. In your second risk factor, please provide the cash balance as of
the most recent date practicable.
Determination of Offering Price
4. Expand the second sentence to state the date of your most recent
private offering.
Plan of Distribution
5. State the estimated costs associated with this offering that the
company is paying.
6. Please add a statement addressing the fact that if an underwriter
is selected in connection with this offering, an amendment will be
filed to identify the underwriter, disclose the arrangements with the
underwriter, and file the underwriting agreement as an exhibit to the
registration statement as required by Item 601(b) of Regulation S-B.
Directors, Executive Officers...
7. In Mr. Samaroo`s biographical information, for the five year
period or a longer period that you voluntarily cover, please provide
the following for each position held by Mr. Samaroo: name of the
position, the name of the entity with whom the position was held, a
description of the entitt`s activities, a description of Mr. Samaroo`s
activities in his position and the beginning and ending dates, by
month and year, of each position. Please disclose any directorship of
a SEC reporting company.
Significant Employees
8. The disclosure here and also under "Committees of the Board of
Directors" should be revised to make clear that, if true, Mr. Samaroo
is the only person presently employed with this company.
Security Ownership...
9. Since Mr. Samaroo holds a controlling interest in the company`s
shares, it would appear that another risk factor should be added
addressing this fact and its potential effect on minority
shareholders.
Description of Property and Location of Hilltop Mineral Claims
10. The Hilltop Mineral Claims now owned by the company have not been
filed as exhibits to the registration statement. Please file or
explain supplementally.
Recommendations of Geological Report...
11. When the results of Phase I are received, please update the
disclosure accordingly. If the results are not known at the time of
effectiveness, please disclose how potential investors will be advised
of the results during the ongoing offering. In this regard, we note
the offering will continue for 9 months.
12. Please update the penultimate paragraph to disclose the company`s
cash balance as of the most recent date available and state whether
this balance is sufficient to fund Phases I, II, and III of your
exploration program. In this regard, we note that $13,000 has been
allocated to professional fees and office expenses for the next 12
months.
13. Further, please discuss any potential lines of credit or sources
of financing available to the company for the purpose of proceeding
with work beyond Phase III. If none, please disclose.
Compliance with Government Regulation
14. We note the initial statement in paragraph eight, "[W]e have not
budgeted for regulatory compliance costs in the proposed work program
recommended by the geological report." However in your eighth risk
factor, we note "[W]hile our planned exploration program budgets for
regulatory compliance..." Please revise as appropriate to make the
disclosure consistent.
Results of operations for the period ending August 31, 2004
15. Please provide a breakdown of general and administrative expenses
by each principal expense, along with the dollar amount of each
principal expense. Please account for the offering expenses paid to
date and to be paid in the future, if any.
Future Financings
16. Inasmuch as the company relies heavily on the issuance of stock
for its financing needs, it would appear that another risk factor
should be provided to address the potential dilutive affect these
issuances will have on existing shareholders.
Signatures
17. The individual operating in the capacity of principal accounting
officer or controller should be so designated in accordance with the
Form requirements.
General
18. In the amendment to be filed, please update the information
throughout the prospectus to the latest date practicable.
19. Please file both an unmarked version and a "red-lined" marked
version of the amendment on EDGAR, as well as your letter responding
to each of the staff`s comments. The letter should be filed as
"correspondence" on EDGAR. Please refer to Regulation S-T in this
regard.
Financial statements
General
20. Provide a current consent in any amendment and consider the
updating requirements of Item 310(g) of Regulation S-B.
Consolidated Balance sheet, F-2
21. Please explain the nature of deposits of $ 2,500 and explain how
you deemed the deposits to be current assets.
Notes to Consolidated Financial Statements
Note 1 - Nature and Continuance of Operations, F-6
22. Please disclose the Company`s fiscal year-end.
23. Please disclose the reporting currency on the face of the
financial statements. Disclose the functional currency and reporting
currency, if different, in a note and describe briefly how you apply
SFAS 52.
Note 3- Mineral Leases and claims, F-10
24. The recoverability of capitalized acquisition costs of mineral
leases is presumed to be insupportable under FASB Statement No. 144
prior to determining the existence of a commercially minable deposit,
as contemplated by Industry Guide 7, for a mining company in the
exploration stage. Please revise the financial statements to expense
the mineral leases of $ 3,000 and provide the disclosures required by
paragraph 37 of APB 20.
Engineering comments
25. Your filing is under review by the Division`s engineers.
Engineering comments, if any, will be sent to you promptly following
completion of their review.
Closing Comments
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 provide 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 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.
Please contact Raj Rajan at (202) 942-1941 with any questions
regarding accounting issues and you may contact Janice McGuirk at
(202) 942-1787 with any other questions.
Sincerely,
John Reynolds, Assistant Director
Office of Emerging Growth Companies
CC: Stephen F. X. O`Neill, Esq.
Via fax (604) 687-5792