June 14, 2005
via U.S. mail and Facsimile
Stephen R. Light
President and Chief Executive Officer
Flow International Corporation
23500 64th Avenue South
Kent, WA 98032
Re: Flow International Corporation
Form S-1 filed May 20, 2005
File No. 333-125113
Dear Mr. Light:
We have limited our review of your filing to those issues we
have addressed in our 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
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.
Form S-1 filed May 20, 2005
Prospectus Cover Page
1. Please limit your cover page to the information set forth in
Item
501(b) of Regulation S-K. In this respect, please move the
information in the last two paragraphs to the summary.
2. Please confirm you are not registering the shares issuable upon
exercise of the warrants that you may issue in the future to your
lenders.
3. Tell us supplementally of the basis for the purchase price of
$4.07 under the warrants.
4. Please revise this discussion after you move it, as well as the
selling shareholder section, to clearly disclose the discount
received by the selling shareholders in the purchase of the common
shares.
Risk Factors, page 5
5. Please add risk factor disclosure regarding the downward
pressure
on the market price of your common stock that could result as
selling
security holders exercise warrants and sell material amounts of
your
common stock. In addition, please discuss the fact that this
downward pressure could encourage short sales by selling security
holders or others. Finally, please explain short selling and its
likely impact on the market price of your common stock.
6. In addition, please add risk factor disclosure that as selling
shareholders exercise their warrants and purchase shares, you must
issue additional warrants to the underwriters which may dilute the
holdings of investors who purchase from selling shareholders and
discuss the further downward pressure this may place on your stock
price.
Selling Stockholders, page 72
7. We note that you refer readers to the section titled "Certain
Relationships and Related Transactions" for information about
material relationships between the selling shareholders and the
company; however, it appears that this information has not been
included in the prospectus.
In addition, please describe here the material transactions and
relationships between Flow International and each of the selling
shareholders during the past three years. See Item 507 of
Regulation
S-K. Please describe the transactions in which you issued the
shares
to be resold and the warrants in materially complete terms,
including
the basic terms of all the issuance transactions, including the
dates
the transactions took place, the material terms of the
transactions,
the parties who participated in the transactions and the number of
shares and warrants received by them. For example, if true, state
that you entered into a Securities Purchase Agreement with
accredited
investors and the units were issued to these investors in a
private
placement. In addition, you should disclose the name of any
placement agent used in the transaction.
8. Please revise your disclosures to identify the natural person
or
persons who have voting or investment control over the company`s
securities that each non-reporting entity owns. See
Interpretation
4S. of Regulation S-K Item 507 in the March 1999 supplement of the
manual of publicly available CF telephone interpretations.
9. Please add columns disclosing the number and percentage of
shares
that the selling stockholders will own after the offering pursuant
to
Item 507 of Regulation S-K.
10. Revise the selling shareholder table to include a line that
shows
the total number of shares to be offered in this prospectus.
Plan of Distribution, page 77
11. Please tell us whether any of the selling shareholders are a
broker-dealer or an affiliate of broker-dealer. If any selling
shareholder is a registered broker-dealer, it should be named as
an
underwriter. If the selling shareholder is an affiliate of a
registered broker-dealer, expand the prospectus to indicate
whether
it acquired the securities to be resold in the ordinary course of
business. Also indicate whether at the time of the acquisition it
had any agreements, understandings or arrangements with any other
persons, either directly or indirectly, to dispose of the
securities.
12. Please expand your disclosure in the first full paragraph
after
the bullets on page 77 to describe in greater detail Rule 144
under
the Securities Act as it pertains to sales of your common stock.
13. Please tell us supplementally why you will file a prospectus
supplement "if then required" upon a notification from a selling
shareholder that a donee or pledge intends to sell more than 500
shares of common stock. In this regard, we note the statement in
the
preceding paragraph that a prospectus supplement will be filed
pursuant to rule 424(b)(3) or other applicable provision to amend
the
list of selling shareholders to include pledgees, transferees, or
other successors, without regard to the 500 share threshold.
14. Please revise this section to state that if an underwriter is
used in the resale of the shares, you will file a post-effective
amendment to disclose the name of the underwriter and discuss the
material terms of any agreement.
15. Tell us what steps you have implemented to ensure that each of
the selling stockholders will conduct the distribution in
accordance
with Regulation M. See paragraph (b)(7) of Rule 461.
Exhibit 5.1
16. Please allow us sufficient time prior to effectiveness to
review
the legality opinion.
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 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 direct questions on disclosure issues to Tamara
Brightwell, Staff Attorney, at (202) 551-3751 or, in her absence,
to
me at (202) 551-3767.
Sincerely,
Jennifer Hardy
Branch Chief
cc: Robert S. Jaffee
William Gleeson
Preston Gates & Ellis LLP
925 Fourth Avenue, Suite 2900
Seattle, WA 98104
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Stephen R. Light
Flow International Corporation
June 14, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE