July 1, 2005
via U.S. Mail
George J. Zilich
Chief Financial Officer and General Counsel
BPI Industries Inc.
30775 Bainbridge Road, Suite 280
Solon, Ohio
44139
Re: BPI Industries, Inc.
Form S-1 filed June 3, 2005
File No. 333-125483
Dear Mr. Zilich:
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 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
General
1. Where comments on a section also relate to disclosure in
another
section, please make parallel changes to all affected disclosure.
This will eliminate the need for us to repeat similar comments.
2. We will need time to review all new disclosure, any additional
proposed artwork or graphics and all omitted exhibits. You can
expedite the review process by providing all this information and
all
these documents promptly. We may have additional comments.
3. We note the articles posted on your website under the tab,
"Reports and Presentations" are dated March 2001 and January
2003.
It would appear that such articles are outdated and no longer
accurate reflections of the current developments in the coalbed
methane industry. Please inform us of their current relevance.
4. Provide updated disclosure in each amendment. For example,
include any updated information regarding the last reported price
of
your common stock as reported on the Toronto Stock Exchange and
the
drilling results with respect to the number of new production
wells
and test wells drilled.
Cover Page i
5. Consistent with the requirements of Item 501 (b)(10) of
Regulation
S-K, please include the "Subject to Completion" legend on the
cover
page of the prospectus.
6. Disclose the current market price, expressed in United States
dollars of the common stock being offered by the selling
stockholders
as of a recent date.
Prospectus Summary, page 1
Business, page 2
7. Provide us with objective support for the statements you make
regarding:
* your rights to control of "more [coalbed methane] acreage than
any
other [coalbed methane] company in the Illinois Basin";
* your anticipated potential for more than 5,000 drilling
locations;
and,
* the Gas Research Institute`s estimate regarding the 21 trillion
cubic feet of coalbed methane gas in the Illinois Basin.
8. You state that you have identified seven potentially
commercially
productive seams within the Illinois Basin. Clarify the nature of
your ownership, lease, option or farm-out agreements with respect
to
the seven areas you reference.
9. Revise to provide a summary of the material terms of the
Technical
Services Agreement. Specifically, the right-of-first-refusal
granted
to BHP Petroleum (Exploration) Inc. and the associated stock
appreciation rights granted to BHP Petroleum (Exploration) Inc.
in
the event of a major transaction as defined in the agreement.
Provide a cross-reference to the more detailed discussion of the
transaction terms on page 27.
10. Avoid repetition of disclosure in the summary. In this
regard,
we note the disclosure on page 2, "Business" regarding the number
of
production and test wells you plan to drill in the 12-month period
ending April 30, 2006 is identical to the disclosure appearing
under
the headings "Business Strategy" and "Competitive Strengths" on
page
3. Please revise your disclosure accordingly.
11. Revise to provide a summary that is balanced. For example, the
summary references your anticipated drilling program during the
12-
month period ending April 30, 2006, yet it does not disclose the
fact
that you currently have insufficient revenues and cash balances to
fully fund your capital expenditures and anticipated cash needs
through April 30, 2006. Further, you reference The Gas Research
Institute`s estimates of the amount of coalbed methane gas in the
Illinois Basin yet you do not indicate that despite such
estimates,
the Illinois Basin is largely untested for commercial coalbed
methane
production. Revise the disclosure so that you provide a more
balanced summary of your operations and anticipated challenges
with
respect to your planned operations.
Risk Factors, page 5
12. Please consider providing a risk factor to describe briefly
the
adverse material differences in shareholder protections under
Canadian law as compared to the law in a U.S. jurisdiction, i.e.
Delaware. In addition, please discuss the difficulty that may
arise
in attempting to affect service of process on officers and
directors
of the company who are non-U.S. persons.
13. Provide a risk factor addressing the fact you are currently
not
listed or quoted on any United States national securities exchange
or
market.
Risk Factors Relating to Our Business, page 5
14. Include a risk factor that describes the right of first-
refusal
granted to BHP Petroleum (Exploration) Inc. and the impact this
may
have on other parties` ability to acquire a majority of your
assets
or shares.
"Our current revenues are minimal and not sufficient...," page 5
15. Please explain the statement that if you continue to
"demonstrate
the commercial viability of [coalbed methane] wells in the
Illinois
basin, [you] may encounter difficulty in raising additional
capital
on favorable terms."
"Because substantially all of our CBM acreage rights are
inferior...," page 6
16. Disclose the number of acres you have rights to explore and
drill, expressed as a percentage, that could be affected by the
possible assertion of superior rights by coal mining operators.
Further, advise us of any current or anticipated displacement of
your
operations as a result of competing coal mining operations.
"We could incur significant costs in connection with disputes over
surface rights...," page 7
17. Revise the heading of this risk factor and the risk factor
discussion so that you more clearly convey the risk that is not
only
associated with the legal costs incurred with respect to securing
surface rights, but the more material risk associated with your
potential failure to prevail in a dispute regarding surface rights
and the consequences of being unable to access a well. In this
regard, we note the dispute with Sahara Coal Company, Inc.
disclosed
on page 31 which resulted in you having to access the well you
were
drilling via an alternate route. Tailor your risk factor
discussion
so that you reference this dispute and any others that would be
material to your ability to conduct your operations.
18. If material, disclose the dollar amount you have expended in
connection with the legal disputes you reference.
"The occurrence of a significant adverse...", page 8
19. Eliminate language that tends to mitigate the risk being
disclosed. In this regard, please remove the suggestion that your
insurance levels are adequate. Further, inform us of the dollar
amount spent on insurance and the basis for your belief that such
amount is "adequate" as compared to others in your industry. We
may
have further comment.
"We will incur increased costs as a result of registering in the
United States," page 8
20. We note that you will incur increased compliance costs
associated
with complying with the rules and regulations of the Securities
and
Exchange Commission and the Toronto Stock Exchange. Please
quantify
the amount of your increased compliance costs.
Cautionary Note Regarding Forward-Looking Statements, page 9
21. It is inappropriate to suggest that "will" identifies forward-
looking statements. Please revise the disclosure at page 9
accordingly.
22. Inform us of the basis for your suggestion that United States
securities holders would have equivalent legal recourse against
the
company, despite the fact that the company is not a domestic US
corporation. We may have further comment.
Market for Our Common Stock, page 10
23. Inform us of the basis for your suggestion that United States
securities holders would have equivalent legal recourse against
the
company, despite the fact that the company is not a domestic US
corporation. We may have further comment.
Capitalization, page 11
24. Please include a statement indicating the table presented sets
forth your cash and cash equivalents and capitalization as of
January
31, 2004. As cash and cash equivalents do not represent
capitalization of a company, please revise the summation of your
capitalization within your table to exclude the amount of cash and
cash equivalents as of January 31, 2004.
25. As to your indebtedness, please distinguish between guaranteed
and unguaranteed, and secured and unsecured, indebtedness.
26. Please use the caption, "Common stock issuable," instead of
"Liability to issue shares" to make the caption consistent with
what
you present on the Balance Sheets.
Dividend Policy, page 11
27. Revise to specify the "other factors" that your board of
directors will deem relevant in determining whether or not
dividends
will be paid.
Selected Historical Financial Data, page 12
28. Please revise your disclosure to explain your statement that
"the
financial data for the years ended July 31, 2001 and 2000 were not
audited in accordance with U.S. generally accepted accounting
principles." If these unaudited financial data are prepared
consistent with U.S. GAAP, then please do not qualify their
presentation. If they are not prepared consistent with U.S. GAAP,
then please make the requisite adjustments to them to ensure that
US
GAAP was consistently applied for all periods reported.
29. We note your disclosure that you translated Canadian dollar
amounts into U.S. dollars for the years ended July 31, 2001 and
2000.
Please expand your disclosure to explain why this does not apply
to
the other periods reported. If you had a change in functional
currency, please expand your disclosure to explain this and to
identify the extent to which this impacts the comparability of the
amounts reported for these periods to the subsequent periods
reported.
Management`s Discussion and Analysis of Financial Condition and
Results of Operation, page 13
Overview, page 13
30. Throughout the MD&A you refer to the 12-month period ending
April
30, 2006. Please explain why you have used this 12-month period
rather than one that conforms to your fiscal year end. It appears
that the use of this period results in a gap in periods covered in
your discussion and analysis of your results of operations and
discussion of liquidity.
31. We note the disclosure here and in the risk factor discussion
regarding the shortfall in your ability to finance the estimated
$20
million expenditure planned for the 12-month period ended April
30,
2006. As done on page 19, please also disclose in this section,
the
plans you have to fund your operations. Disclose any specific
financing arrangement you currently have or anticipate entering
with
respect to the financing of your operations for the 12-month
period
ending April 30, 2006.
Critical Accounting Policies, page 13
32. Please revise your disclosures to address the material
implications of the uncertainties that are associated with the
methods, assumptions and estimates underlying your critical
accounting measurements. Specifically, you should provide the
following:
(a) An analysis of the uncertainties involved in applying the
principle and the variability that is reasonably likely to result
from its application.
(b) An analysis of how you arrived at the measure and how
accurate
the estimate or underlying assumptions have been in the past.
(c) An analysis of your specific sensitivity to change based on
outcomes that are reasonably likely to occur and have a material
effect.
Please refer to FRC Section 501.14 for further guidance.
Translation of Foreign Currency, page 14
33. We note that your expenses are converted at the average
exchange
rate for the year. Please inform us whether you have any policies
in
place to hedge against losses due to exchange rates.
Results of Operations, page 15
34. Please expand your discussion to include disclosure of all the
key variables and other factors that you use to manage your
business.
Please ensure that your revised disclosure provides readers with a
view of your company through the eyes of management by providing
analyses of those key variables and other qualitative and
quantitative factors which are necessary for an understanding and
evaluation of your company. For example, please expand your
discussion of revenue and operating costs to explain how your
results
differed due to operational events such as the number of producing
wells in each period and the related volume of production
achieved.
Refer to FRC Section 501.12 for further guidance.
Six Months Ended January 31, 2005 Compared to Six Months Ended
January 31, 2004, page 15
35. Please expand your disclosure to explain in detail why stock-
based compensation increased as a result of additional options
becoming available for issuance under your Incentive Stock Option
Plan. It is our understanding that an increase in the number of
options available for issuance would not impact financial results,
though an increase in the number of options granted would. Please
quantify the number of options granted and the related fair value
determined in your response.
36. Please tell us the consideration you gave to SAB Topic 5:A in
your expensing of legal fees incurred in connection with the $13
million private placement closed in December 2004 and January
2005.
Additionally, please reconcile $13 million in private placement
financing with the amount of proceeds from the shares issued in
private placement as shown in your Consolidated Statements of
Shareholders` Equity and Comprehensive Loss.
37. Please explain to in detail how your deferred income tax
benefit
increased primarily from the increase in your loss before income
taxes. In your response, please address the impact the change in
the
deferred tax liability related to depreciation of property, plant
and
equipment had on your analysis. We note your related disclosure on
page F-16.
Year Ended July 31, 2003 Compared to Year Ended July 31, 2002,
page
18
38. Please expand your disclosure to explain in detail why your
deferred income tax benefit increased in 2003 over 2002 and the
extent to which management judgment was required and what
assumptions
were used to form this conclusion.
Liquidity and Capital Resources, page 19
39. Please inform us of the basis of your belief that adequate
funding can be obtained on terms at least as favorable as you have
received in the past three years. Moreover, we note the risk
factor
reference on page 6 to competition in the coalbed methane gas
industry and the risk posed by new entrants to your operations. In
addressing our comment, please inform us of the consideration you
have given to your ability to obtain funding in such a competitive
environment.
40. Please amend your discussion to identify and explain the
impact
of expected changes in production volumes and the timing of when
those volumes will be produced on the amount and timing of future
cash flows. Please disclose that no properties are in commercial
production as you noted in your consolidated financial statements
and
indicate whether or not this impacts the indicative value of the
trends reported in your historical financial statements.
41. Please expand your disclosure to discuss the 2.0 million stock
appreciation rights that are contingently issuable upon extension
of
the Technical Services Agreement with BHP Billiton and the impact
this arrangement could have on your liquidity.
42. Consistent with the requirements of Item 305 of Regulation S-
K,
provide disclosure regarding qualitative and quantitative exposure
to
market risk.
Contractual Obligations As of April 30, 2005, page 20
43. Please reconcile the statement you make on page 19 that you
had
only $47,428 in long-term debt with the total long-term debt
obligations of $198,483. Please provide the tabular disclosure of
contractual obligations as of the latest fiscal year end balance
sheet date. The tabular presentation may be accompanied by
footnotes to describe provisions that create, increase or
accelerate
obligations, or other pertinent data to the extent necessary for
an
understanding of the timing and amount of your specified
contractual
obligations. Please refer to Regulation S-K Item 303(a)(5).
44. Please tell us the consideration you have given to the
inclusion
of employment agreements and funding of your joint ventures and
equity investments in your contractual obligations table.
Business, page 21
45. Please enhance your disclosure of your business by describing
the
following:
* the length of time that it takes a well to dewater before it
produces CBM gas;
* how you dispose of the water from the wells and any
environmental
liability that it creates; and
* how you will service your wells should the Technical Services
Agreement with BHP Billiton expire without its acquisition of you.
Additionally, expand your discussion of liquidity to address how
the
length of time required to dewater a well results in a delay in
your
ability to generate cash flow from a well after your initial
capital
investment.
Net Cash Used by Operations and Cash Resources, page 29
46. We note that you disclosed your cash balance as of June 1,
2005.
Please discuss cash balances as of the date the most recent
financial
statements are presented. If there are significant changes
between
the date of interim financial statements and the filing date,
please
additionally disclose the cash balance and the reasons for the
significant change.
Sales and Distribution of Our Gas, page 29
47. Please describe the significant terms of the pipeline
arrangements that you have in place, such as the length of the
term,
rates, or purchase commitments.
Availability of Drilling Equipment and Personnel, page 29
48. We note that you do not currently have any contractual
commitments that ensure you will have adequate drilling equipment
or
crews to achieve your drilling plans. Please tell us how this
reconciles with the services that BHP Billiton provides to you.
Legal Proceedings, page 31
49. Please conclude on the likelihood of the loss contingency
related
to the matter with Sahara Coal Company, Inc. using the terms as
defined in SFAS 5.
Management, page 33
50. You have provided a significant amount of disclosure with
respect
to the biographies of some of your directors yet you have still
not
provided, as required by Item 401 of Regulation S-K, complete
biographies for the past 5 years with respect to your directors.
For
example, please clarify your disclosure for Messrs. Zilich,
Vrisakis,
Centa, and Carlton so that you provide complete five year
biographical sketches without gaps or ambiguities with regard to
time
or the capacities in which the individuals served the identified
entities.
Selling Shareholders, page 40
51. Move Appendix B-"List of Selling Shareholders" to the main
body
of the prospectus.
Plan of Distribution, page 41
52. Please specifically identify any selling shareholders who are
registered broker-dealers or affiliates of registered broker-
dealers.
If you determine that any selling shareholder is a registered
broker-
dealer, please revise your disclosure to indicate that such
selling
shareholder is an underwriter, unless such selling shareholder
received its securities as compensation for investment banking
services. With respect to any affiliate of a registered broker-
dealer, please disclose, if true, that such selling shareholder
acquired its shares in the ordinary course of business and at the
time of the acquisition did not have any arrangements or
understandings with any person to distribute the securities. If
not,
you must indicate that such shareholder is an underwriter.
Description of Our Common Stock, page 42
53. Revise to disclose the warrants that are outstanding and the
amount of shares issuable upon exercise of such warrants.
Additionally, describe the terms of the lock-up agreements filed
as
exhibits to the registration statement with respect to your common
shares.
54. Expand your regarding the material features of your common
stock
and the consequences to United States holders of holding your
common
stock. Revise to include a section that summarizes the material
tax
consequences to United States holders of your common stock.
Provide
more detailed disclosure regarding the terms of the restrictions
on
ownership by non-Canadian persons of interests in the company
pursuant to the Investment Canada Act. Consistent with the
requirements of Item 202 of Regulation S-K, revise your disclosure
throughout this section to ensure you provide United States
investors
with a complete and accurate summary of your common stock and the
consequences to them of owning your common stock. We may have
further
comment.
55. Revise this section to provide a more direct and detailed
comparison of shareholders` rights and other corporate governance
matters under Canadian law and, for example, Delaware law.
Consider
providing this information in tabular form. For example but
without
limitation, explain whether Canadian law:
* allows shareholder to cumulate their votes;
* allows shareholders to approve corporate matters by written
consent; or
* allows for the issuance of preferred stock or the adoption of
other
"poison pill" measures that could prevent a takeover attempt and
thereby preclude shareholders from realizing a potential premium
over
the market value of their shares.
Where You Can Find More Information, page 43
56. Please revise the address of the SEC`s public reference room
to
Headquarters Office, 100 F Street, N.E., Room 1580, Washington DC
20549. In addition, please include your website address.
Consolidated Financial Statements, page F-1
57. Please tell us your consideration given to reporting as a
developmental stage enterprise in accordance with SFAS 7.
Independent Auditors` Report, page F-2
58. Please describe the audit report as "Report of Independent
Registered Public Accounting Firm." Please refer to AS 1.
Consolidated Balance Sheets, page F-3
59. Please state separately, in the balance sheet or in a note
thereto, any item in excess of five percent of total current
liabilities, as applicable.
60. Please reconcile the caption on the balance sheet that states
the
common stock has no par with your Articles of Incorporation that
states the common stock has a par of $0.001. If the common shares
have no par value, then please explain to us why there is an
additional paid-in capital account.
Consolidated Statements of Operations, page F-4
61. Please tell us why equity in net earnings of investee is not
presented on the face of the statement of operations. Please
refer
to Regulation S-X, Rule 5-03.
Consolidated Statements of Shareholders` Equity and Comprehensive
Loss, page F-5
62. Please reconcile for us the following differences between the
proceeds from shares issued in private placement between that
disclosed on the financial statements and what is disclosed in
your
related press releases:
Proceeds per Proceeds per
Issue Date Financial Statements Press Release
April 27, 2004 $1,972,510 $2,660,880
December 22, 2003 $928,259 $1,248,000
Consolidated Statements of Cash Flows, page F-6
63. Please eliminate the sub-total of adjustments to reconcile
income
to net cash provided by operating activities as this subtotal is
not
contemplated by SFAS 95.
Notes to Consolidated Financial Statements, page F-7
64. Please include the disclosures required by paragraphs 51 to 57
of
SFAS 141 in your footnotes related to the acquisition of Methane
Management, Inc. to the extent applicable.
65. Please disclose an accounting policy to describe how you
account
for equity and cost method investments.
66. Please disclose vulnerabilities due to concentrations in
volume
of business transacted with suppliers and contingencies for
environmental remediation. If you do not believe these
disclosures
are necessary under SOP 94-6 and SAB Topic 5:Y, then please tell
us
why.
Note 2. Summary of Significant Accounting Policies, page F-7
Basis of Presentation and Principles of Consolidation, page F-8
67. Please tell us why all inter-company transactions and balances
have not been eliminated upon consolidation and the amounts of
inter-
company transactions that have not been eliminated.
Fair Value of Financial Instruments, page F-8
68. Please tell us why you believe your capital lease obligations
are
not financial instruments.
Coal Bed Methane Projects, page F-8
69. Please tell us why you expense internal costs associated with
coal bed methane activities. Under the full cost method, internal
costs that can be directly identified with acquisition,
exploration,
and development activities should be capitalized. Please refer to
Regulation S-X, Rule 4-10(c).
70. Additionally, please change "proven" reserves to "proved"
reserves to be consistent with terminology as defined in .
Please
refer to Regulation S-X, Rule 4-10(a).
Loss per Share, page F-10
71. Please disclose the number of equity securities that could
potentially dilute basic EPS in the future that were not included
in
the computation of diluted EPS because to do so would have been
antidilutive. Please refer to paragraph 40(c) of SFAS 128.
Asset Retirement Obligations, page F-10
72. We note that you have drilled or begun drilling a total of 51
wells as of June 1, 2005, on acreage to which you obtained rights
through lease, option or farm-out agreements. Please provide us
with
your assessment under SFAS 143 to show how you arrived at your
conclusion that your asset retirement obligations are immaterial.
Note 3. Marketable Securities, page F-10
73. Please disclose the amount of unrealized holding gains and
losses
related to your Pyng Technologies marketable securities for each
period presented, if material. Please refer to paragraph 21 of
SFAS
115.
Note 5. Equity Investment in Joint Venture, page F-12
74. Please disclose summarized information as to the assets,
liabilities and results of operations of the investee, if they are
material to your financial position. Please refer to paragraph
20(d)
of APB 18.
75. Please provide us with your analysis of the significance of
your
investments for inclusion of their financial statements under
Regulation S-X Rule 3-09.
Note 6. Investment in Jericho, page F-13
76. We note that you have accounted for your investment in Hite
Coalbed Methane LLC (Hite) under the cost method. Given you own
49%
of Hite, please tell us why you have accounted for your investment
in
Hite under the cost method and not the equity method.
Note 7. Shareholders` Equity, page F-13
77. Please disclose the weighted-average fair value at grant date
of
options granted during the year. If the exercise prices of some
options differ from the market price of the stock on the grant
date,
please disclose the weighted-average exercise prices and weighted-
average fair values of options separately for options whose
exercise
price (1) equals; (2) exceeds; or (3) is less than the market
price
of the stock on the grant date.
78. Please disclose the number of options authorized for issuance
at
July 31, 2004.
79. Please the disclose option activity for fiscal year 2002 in
your
table summarizing stock option activity.
Note 8. Special Warrant, page F-14
80. Please explain to us the terms of the Special Warrant and how
you
accounted for it. Please cite specific accounting literature in
your
response.
Note 10. Related Party Transaction, page F-14
81. Please tell us why you excluded disclosure of the issuance of
the
bonus shares to your Chief Executive Officer and the related party
transaction identified on page 38 of your Form S-1.
Note 11. Income Taxes, Page F-15
82. Please explain to us why you are able to net the deferred tax
assets of one U.S. subsidiary with the deferred tax liabilities of
another U.S. subsidiary when the subsidiaries do not file a
consolidated tax return. Please cite authoritative literature in
your response.
Consolidated Balance Sheets as of July 31, 2005 and 2004, page F-
18
83. Please remove "(Unaudited)" from the title as it is
contradictory
with the audited balance sheets as of July 31, 2004.
Notes to Interim Consolidated Financial Statements For the Six
Month
Period Ended January 31, 2005, page F-22
Note 3. Coal Bed Methane Projects, page F-22
84. Please explain how the accounting policy disclosed in this
section, complies with the full cost method of accounting. Refer
to
Rule 4-10(c) of Regulation S-X.
85. We note that you have recorded the costs of all properties at
the
lower of cost or fair market value. Under the full cost method,
unevaluated costs are periodically assessed for recoverability as
outlined in Regulation S-X Rule 4-10(c)(3)(ii). Please revise
your
policy accordingly and quantify for us the financial impact of
changing your policy, if any.
Exhibits
Exhibit 5.1
86. Please delete the last sentence of the second paragraph.
Item
601 of Regulation S-K applies to legality opinions and other
exhibits, such as a tax opinion. Since, you are opining on the
legality of these securities, it is inappropriate to state that
you
satisfy that entire item requirement.
87. We note your statement that the opinion will speak "as of the
date hereof." As the opinion must speak to the date of
effectiveness, either delete this statement in the amended version
or
file an updated opinion at effectiveness.
88. Please opine that the warrants are legally issued or duly
authorized.
89. We note your language in the opinion that you "assume no
obligation to advise" the parties, which effectively limits the
opinion to the date it was rendered. If you choose to include
this
language, you will need to provide a new opinion that speaks as of
a
date as close as practicable to the desired effective date.
Engineering Comments
Prospectus Summary, page 1
Coalbed Methane, page 1
90. Since coal beds preferentially adsorbs CO2, it is our
understanding that CBM can contain significant amounts of it.
Please support to us your statement, "CBM generally contains only
methane and is pipeline-quality gas after simple water
dehydration."
Our Business, page 2
91. Please expand your discussion of the BHP Technical Services
Agreement to describe the impact of medium radius drilling (MRD)
and
tight radius drilling (TRD) on your business.
Business, page 21
Overview, page 21
92. Please amend your document to disclose the depths of the CBM
beds
that you intend to exploit.
Glossary of Natural Gas Terms, page A-1
Proved Reserves, page 2
93. Please expand your description of proved reserves to cite Rule
4-
10(a)(2) of Regulation S-X as the definition of proved reserves.
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 information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your response 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 an 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 Ryan Milne , Staff Accountant at (202) 551-
3688
or Jill Davis, Accounting Branch Chief at (202) 551-3683 if you
have
questions regarding comments on the financials statements and
related
matters. Please contact Ronald Winfrey, Petroleum Engineer at
(202)
551-3704 if you have questions regarding the engineering comments.
Please contact Mellissa Campbell Duru, at (202) 551-3757 or me at
(202) 551-3745 with any other questions. Direct all correspondence
to
the following ZIP code: 20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
cc: James Carlson, Esq.
(216) 566-5800 (via facsimile)
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Mr. Zilich
BPI Industries, Inc.
July 1, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE