MAIL STOP 0511
January 24, 2005
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#2
File No. 333-119223
Filed December 21, 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. We reissue our prior comment 2. Contrary to your letter, no
revisions have been made to the total offering expenses in
addition
to the amount paid to date. Please update the disclosure to
indicate
whether you have incurred any additional offering expenses since
first filing your registration statement. Also, we again note
that
the stated amount of $10,979.60 throughout your disclosure does
not
reconcile with the $11,000 amount provided in your financial
statements. Please reconcile.
2.
We note that the offering period is for 90 days with a 90 day
extension. We also note that a term of your offering is that the
consummation of a merger must occur within 6 months of the date of
effectiveness of the registration statement. Please explain how
you
plan to complete the merger within the same time frame as the
offering period. Also, please confirm again supplementally that
there are no preliminary agreements, understandings or
negotiations
to merge with or acquire another company. Lastly, please explain
how
you intend to comply with the requirements of Rule 419(d) of
Regulation C.
Prospectus Cover Page
3. We note the removal of the legend required by Item 501(a)(7) of
Regulation S-B. Please add back the disclosure.
4. Please reconcile the disclosure on the cover page that if you
do
not raise the maximum offering amount, funds will be promptly
returned to investors without interest with the disclosure on the
same page that proceeds will be held in "an interest-bearing
escrow
account." Revise disclosure throughout the prospectus. We direct
your attention to the statement in risk factor three that
investors
will not receive any return upon escrowed investment funds. We
also
note that the escrow agreement states it is non-interest bearing.
5. Please clarify the last sentence that "the securities and
proceeds
of this offering will be held in an interest-bearing escrow
account
.... and the merger or acquisition has been consummated" to discuss
the release of funds if the merger is not completed within the
time
frame set forth in Rule 419(e)(2)(iv) of Regulation C.
Risk Factors, page 6
6. We reissue our prior comment 3. Contrary to your letter, no
risk
factor was added discussing the risk associated with your lack of
operating history. 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.
7. We reissue prior comment 8. Please reconcile your disclosure
in
risk factor six that operations and other capital needs will be
"nominal" over the next 6 months with the discussion contained in
the
section entitled "Structuring and Closing a Merger or Acquisition
with a Prospective Candidate" on page 16, 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."
8. Please revise your Management section in order to provide
disclosure with respect to the "other blank check companies" with
which Mr. Mercier is affiliated, as mentioned in risk factor 7.
Use of Proceeds, page 9
9. Please provide the staff with a supplemental explanation for
the
change in your disclosure from past to future tense with respect
to
the payment of offering expenses and reconcile with your newly
revised financial statements that state such expenses have been
paid.
Also reconcile with the disclosure on the prospectus cover page.
10. Additionally, please provide the staff supplementally the
specific organizational costs incurred to date.
Dilution, page 9
11. Please update the information in this section as of the most
recent financial statements.
Description of Business, page 11
12. We partially reissue our prior comment 13 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 is 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.
13. Please see comment 7, above. Please reconcile your disclosure
on
page 12 that the target company will be responsible for the
payment
of any profit transaction expenses with your disclosure on page
16,
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. If a decision is made not to participate
in
a specific business opportunity, the costs and expenses therefore
incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation
in
a specific business opportunity, the failure to consummate that
transaction may result in the loss to us of the related costs and
expenses incurred."
Description of Property, page 20
14. We reissue our prior comment 16. Contrary to your letter, no
revisions have been made to this amendment. 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 a 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 25
15. We reissue our prior comment 18. Contrary to your cover
letter,
and despite your duplication of the second paragraph in this
section,
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.
Exhibits
Escrow Agreement
16. We reissue prior comment 74 from our letter of October 22,
2004.
The escrow agreement currently only covers the deposit of the
funds
into an escrow account. We direct your attention to Rule
419(b)(3)
of Regulation C, which also requires the deposit of securities
into
the escrow or trust account promptly upon issuance. Please
revise.
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 Angela Halac at (202) 824-5683 if you have
questions
regarding comments on the financial statements and related
matters.
Questions on other disclosure issues may be directed to John Zitko
at
(202) 824-5532, 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
January 24, 2005
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