December 17, 2004
Mail Stop 0409
Robert Petty
62 White Street, Suite 3A
New York, New York 10013
Re: Roo Group, Inc.
Registration Statement on Form SB-2
Filed on November 18, 2004
File No. 333-120605
Dear Mr. Petty:
We have reviewed only those portions of your registration
statement relating to the callable secured convertible notes and
the
warrants. Based on our review of those portions of your filing,
we
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
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. We note that the second tranche of notes were issued on the
filing
date of the registration statement. Please revise your disclosure
throughout the prospectus, including the Selling Stockholders
section, to reflect this issuance. In addition, please disclose
whether any of the notes have been converted.
Prospectus Summary, page 1
2. Please disclose the interest payment date(s) of the notes.
3. Please provide a summary of the material terms of the
securities
purchase agreement, including the closing conditions.
4. In your discussion of the ownership limit please clarify that
an
investor may repeatedly sell shares in order to reduce its
ownership
percentage, and then convert additional notes.
Risk Factors, page 3
5. Please provide a risk factor discussing the likelihood of short
selling in connection with this financing transaction and the
impact
short selling will have on the company and its share price.
6. Please provide a risk factor discussing any potential listing
issues created by this financing transaction.
There are a large number of shares underlying our callable
secured convertible notes and warrants that may be available for
future sale, and the sale of these shares may depress the market
price of our common stock, page 7.
7. Please discuss in this risk factor or elsewhere the impact that
a
depressed market for your stock will have on the agreements
executed
in connection with the Realty Group and Undercover Media
acquisitions, including the Realty Group guarantee.
In the event that our stock price declines, the shares of common
stock allocated for conversion of the callable secured
convertible
notes and registered under this prospectus may not be adequate and
we
may be required to file a subsequent registration statement
covering
additional shares. If the shares we have allocated are not
adequate
and we are required to file an additional registration statement,
we
may incur substantial costs in connection therewith, page 7.
8. Please state the share price at which you would be required to
file another registration statement to cover available conversion
shares.
On November 4, 2004, the holders of a majority of our voting
capital
stock authorized an amendment to our certificate of incorporation
to
authorize the issuance of blank check preferred stock. The
issuance of preferred stock may have the effect of preventing a
change of control and could dilute the voting power of our common
stock and reduce the market price of our common stock, page 8.
Securities authorized for Issuance Under Equity Compensation
Plans,
page 11
9. In your discussion of the adoption of the 2004 Stock Option
Plan,
please disclose any grants of options made to date.
Management`s Discussion And Analysis Or Plan Of Operation, page
12.
Liquidity and Capital Resources, page 14
10. Please discuss your ability to pay the interest required on
the
new notes.
11. Please discuss the restrictions contained in Section 4(e) of
the
Securities Purchase Agreement on your ability to raise cash
through
the issuance of additional securities.
Terms of Callable Secured Convertible Notes and Warrants, page 35
12. Please conform this section to comments made on the Summary
section.
Legal Matters, page 37
13. Please clarify that the shares owned by Sichenzia Ross
Friedman
Ference LLC are included in this registration statement.
Part II
Item 26. Recent Sales of Unregistered Securities
14. Please revise to include all the information required by Item
701
of Regulation S-B. In particular, please describe the facts
relied
upon for each of the claimed exemptions. In addition, please
revise
your disclosure regarding the April, May and June 2004 issuances
to
more specifically identify the persons or class of persons that
purchased the shares in each of the transaction.
15. Refer to page F-13. There are sales of unregistered
securities
disclosed in the financial statements that are not disclosed in
Item
26, including the August 2, 2004 private placement. Please revise
accordingly.
* * *
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.
Please contact Michael McTiernan, Attorney-Advisor, at (202)
824-5445, or me at (202) 942-1971 with any questions.
Sincerely,
Elaine Wolff
Branch Chief
cc: Richard Friedman, Esq. (via fax)
Sichenzia Ross Friedman Ference LLP
??
??
??
??
Roo Group, Inc.
Form SB-2
Page 5