MAIL STOP 0511
December 8, 2004
Mr. Ronald Mercier, President
M.E.R. Corporation
2400, 10303 Jasper Avenue
Edmonton, Alberta T5J 3T8
CANADA
Re: M.E.R. Corporation
Registration Statement on Form SB-2/A#1
File No. 333-119223
Filed November 10, 2004
Dear Mr. Mercier,
We have reviewed your amended 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.
General
1. The red-lined version of the amendment did not actually reflect
the true extent of the changes to the amendment. In future,
please
ensure that all red-lined amendments you submit completely and
accurately reflect the additions and deletions contained in the
revised document.
2.
We note the reference throughout the prospectus to offering
expenses
paid to date of $10,979.60. Please revise the disclosure to
indicate
the total estimated offering expenses, in addition to the amount
paid
to date. Also, please revise the offering expenses table in part
II
of the registration statement as appropriate.
Risk Factors, page 6
3. Please add back the first risk factor discussing the fact that
the
company has no operating history and the resultant risk to the
company and/or investors. See Item 503(c)(1)(i) of Regulation S-
B.
4. The description of the Rule 419 process contained in the first
risk factor should be revised. Rule 419 states that the company
must
file a post-effective amendment, which must then be declared
effective, prior to submitting the transaction to shareholders for
confirmation. Also, please state the particularized risk to the
company and/or investors contemplated as per the revision, or
delete.
5. We reissue prior comment 19 and again direct your attention to
Rule 419(b)(2)(iii) that deposited proceeds and interest or
dividends
thereon, if any, shall be held for the sole benefit of the
purchasers
of the securities. Please revise your disclosure throughout the
prospectus to indicate whether interest will be paid on the escrow
account.
6. As requested in prior comment 20, please revise the fifth risk
factor subheading to reflect the risk discussed in the narrative.
7. We partially re-issue our prior comment 25. Please reconcile
your
reference to an 18-month offering period with your disclosure
elsewhere of an initial 90-day period with the possibility of an
additional 90-day extension.
8. We reissue prior comment 26. Please reconcile your statement
that
operations and other capital needs will be "nominal" over the next
18
months with the discussion contained in the section entitled
"Structuring and Closing a Merger or Acquisition with a
Prospective
Candidate" section, where it is stated that "It is anticipated
that
the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant merger and
acquisition agreements, disclosure documents and other instruments
will require substantial management time and attention and
significant fees and expenses for attorneys, accountants and
others."
9. Additionally, as also requested in our prior comment 27, please
state the particularized risk to the company and/or investors
contemplated by the discussion in risk factor 7, and disclose
whether
Mr. Mercier is legally obligated to provide the funds.
10.
It appears that the subheading for risk factor 7 is inconsistent
with
the narrative. You state that your ability to continue as a going
concern could be affected by your need for additional capital but
then state that you will not require any additional funds beyond
those to be provided by Mr. Mercier. Please reconcile the
narrative
and subheading, along with the discussion in your Plan of
Operation
on page 14.
11. We partially reissue our prior comment with respect to risk
factor 13 relating to potential conflicts. Please disclose how
such
future conflicts will be resolved.
Use of Proceeds, page 10
12. Please reconcile the disclosure in this section that offering
expenses were paid from the initial capital contribution from Mr.
Mercier with the financial statements, indicating the initial
capital
contribution was used to pay organizational costs.
Description of Business, page 12
13. We partially reissue our prior comment 46 with respect to
disclosure whether existing corporate policy permits related party
transactions. If corporate policy does not permit such related
party
transactions, explain the basis for such policy, whether it be a
corporation bylaw, a board or shareholder resolution, or an
agreement
or understanding among management. Further, add disclosure as to
whether management is aware of any circumstances under which this
policy, through their own initiative, may be changed. Consider
adding a risk factor if necessary. If there is a present
potential
for a related party transaction mentioned above, please explain
fully
the circumstances under which such a transaction may occur.
Please
discuss fully the non-arms-length nature of such transactions and
disclose whether or not an independent appraisal of the value of
the
business or company will be obtained in the event a related party
transaction is contemplated.
14. We direct your attention to the paragraph disclosing that
"compensation may be paid or profit transactions may occur ...."
Please disclose who will pay for these expenses.
Your Rights and Substantive Protections Under Rule 419, page 18
15. We reissue prior comment 52. Please disclose all material
terms
of the escrow agreement. For instance, clarify whether interest
or
dividends will be earned on the escrowed funds by investors or the
company. See also the indemnification provision and the fees and
expenses to be paid to the escrow agent.
Description of Property, page 21
16. We reissue our prior comment 56. Please confirm that the
address
provided on the facing page of the registration statement is
currently the physical address of the company`s principal
executive
offices. We note that your disclosure that Mr. Mercier operates
his
own independent real estate broker operation, which he conducts
through Fullcorp Realty and Property Management. Fullcorp appears
to
be located at 11252 119 St NW # 201, Edmonton, Alberta T5G 2X3,
rather than the address stated in the registration statement. The
building address and suite number provided in the registration
statement appears to be occupied by law firm. Please disclose any
affiliation with the law firm. Please advise or revise the
disclosure in this section. We may have further comment.
Plan of Distribution, page 26
17. Please clarify the disclosure in this section to indicate that
the shares will be deposited in the escrow account as required by
Rule 419(b)(3) of Regulation C.
18. We reissue our prior comment 61. Contrary to your cover
letter,
this issue is not addressed in the second paragraph of this
section.
Please address whether Mr. Mercier is subject to a statutory
disqualification. See Rule 3a4-1(a)(1) for guidance.
Exemption from State Registration, page 27
19. We reissue our prior comment 62. Please disclose the states
in
which the securities may be sold in this primary offering. You
should also identify the states in which you have applied to
register
your securities, or have obtained or will seek to obtain an
exemption
from registration.
20. We note the statement that you intend to register this
offering
in Nevada. Please disclose whether you plan to register with
Nevada
before effectiveness of this registration statement. We may have
further comment.
Part II
Recent Sales of Unregistered Securities, page II-3
21. We reissue our prior comment 66. Contrary to your cover
letter,
this section has not been revised to state the specific exemptions
relied upon. Please disclose which rule under Regulation D you
relied upon for the private transaction.
Signatures
22. We reissue our prior comment 68. Please also have Mr. Mercier
sign in the capacity of controller or principal financial officer.
See instructions for signatures in Form SB-2.
Exhibits
Subscription Agreement
23. Please file the revised Subscription Agreement as an exhibit
so
that we may review your responses to our prior comment 70 through
73.
Escrow Agreement
24. We reissue prior comment 74. Please file the revised escrow
agreement.
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 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 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 Solomon Cromwell at (202) 942-2876 if you
have
questions regarding comments on the financial statements and
related
matters. Questions on other disclosure issues may be directed to
Yuna Peng at (202) 942-1917, or Pamela Howell, who supervised the
review of your filing, at (202) 942-1954.
Sincerely,
John Reynolds, Assistant Director
Office of Emerging Growth Companies
cc: William D. O`Neal
Fax (602) 267-3855
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M.E.R. Corporation
December 8, 2004
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