Mail Stop 4561
July 13, 2005
Mr. Sundaresan Raja
Airbee Wireless, Inc.
President and Chief Executive Officer
9400 Key West Avenue
Rockville, MD 20850-3322
RE: Airbee Wireless, Inc.
Form 10-KSB/A-2 for the fiscal year ended December 31, 2005
Filed June 16, 2005
File No. 0-50918
Form 10-QSB/A for the fiscal year ended December 31, 2005
Filed June 13, 2005
File No. 0-50918
Form 8-K/A
Filed June 29, 2005
File No. 0-50918
Dear Mr. Raja:
We have reviewed your filing and have the following comments.
Feel free to call us at the telephone numbers listed at the end of
this letter.
Form 10-KSB/A
Registration Facing Page
1. Please advise why you have revised the number of shares
outstanding.
Business
Competition, page 9
2. We note your response to prior comment 10 of our letter dated
May
16, 2005. To more clearly present Airbee`s competitive position
in
its industry, please revise your disclosure to discuss at December
31, 2005 your competition with WiFi and Bluetooth products. See
Item
101(b)(4) of Regulation S-B. Although we understand that Zigbee
technology has divergent technological specifications from that of
Bluetooth and WiFi, it remains unclear why Zigbee technology will
not
compete for the same product users and applications as Bluetooth
and
WiFi. Regardless of the technology divergence of the
technological
specifications, Zigbee technology, Bluetooth and WiFi all appear
to
serve the same or similar purposes: they allow for wireless voice,
data and video communications over short distances. In light of
fact
that the technologies serve the same or similar purposes, your
disclosure should clearly explain Airbees competitive position in
the
short range communications industry with respect to Bluetooth and
WiFi. Alternatively, disclose why Airbee believes that Bluetooth
and
WiFi products are not in the same industry.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Plan of Operations, page 14
3. We note your revisions in response to comment 14 of our letter
dated May 16, 2005. Please revise your disclosure to clearly
label
the discussion of the transactions with Cornell Capital Partners
and
Montgomery Equity Partners as subsequent events, as these
agreements
were not entered into as of December 31, 2004.
Liquidity and Capital Resources, page 16
4. We note your revisions in response to comment 15 of our letter
dated May 16, 2005. We further note that your SEC reporting
obligations would be approximately $15,000 per month and that your
total non SEC expenditures would be about $115,000 per month. In
light of the disclosed costs please advise why you continue to
believe that your SEC reporting obligations are not material.
5. We reissue comment 16 of our letter dated May 16, 2005. It
still
does not appear as if you revised your plan of operation to
explain
each present and proposed activity and the precise activities to
be
engaged in, each material event or step required in the start-up
of
your operations until revenues are generated and the conditions or
contingencies to the achievement of those events. We note very
little forward-looking information on future costs for Airbee`s
development. Consider for example disaggregating the $131,000 per
month in expenditures to describe estimated costs associated with
each aspect of your business.
Financial Statements
Notes to Consolidated Financial Statements
Note 7 - Intellectual Property, page 40
6. We refer you to prior comment 22 of our letter dated May 16,
2005.
We note in your response letter dated June 15, 2004 that you
believe
amortization can not begin before the software is delivered and
revenue is recognized. Tell us how you considered the guidance
in
paragraph 43 of SFAS 86 that indicates amortization should be
based
on estimated future revenues. Furthermore, we note that the IEEE
802.15 global standard was finalized in October 2003 and the
ZigBee
global standard was finalized in December 2004. In this regard,
tell
us how you considered the guidance in paragraph 43 of SFAS 86 that
indicates amortization should begin when the product is available
for
general release to the public.
Note 11 - Stockholder`s Deficit
Stock Options and Warrants, page 43
7. We refer you to comment 24 of our letter dated May 16, 2005.
Please provide us with an analysis that shows how you calculated
the
amount of unearned compensation from stock options. Indicate the
method and the service period used to amortize the unearned
compensation. If the service period does not agree to the vesting
period, please explain why. Provide your revised schedule of
common
stock issued and stock options granted in chronological order as
follows: a) the issuance date or grant date, b) the common stock
holder or stock option holder, c) the number of shares of common
stock and/or stock options granted, d) the price per share paid or
exercise price, e) the fair value of the common stock on the
issuance
date or grant date, and f) the amount of deferred compensation
expense recognized for each share of common stock, stock options
and
warrants.
Form 10-QSB/A
Management`s Discussion and Analysis or Plan of Operations, page
23
8. As required by Regulation S-B, Item 303(b)(2), in your
Management
Discussion and Analysis section provide discussion of the results
of
operations for the entire interim three-month period from January
1,
2005 through March 31 and for the comparable period in the
preceding
year. For example, fully discuss material changes in your
consolidated statement of operations in your Results of
Operations,
notably quantify changes in your operating expenses and other
expenses.
Item 3. Controls and Procedures, page 25
9. It appears that your amended Form 10-QSB continues to assert
that
Airbee`s chief executive officer and chief financial officer
concluded that the Company`s disclosure controls and procedures
were
effective for the period ended March 31, 2005. In this regard,
please tell us what consideration was given to Airbee`s apparent
failure to file timely current reports and its recent financial
restatements in asserting and concluding that Airbee`s disclosure
controls and procedures were effective. To the extent your chief
executive officer and chief financial officer considered these
factors, please advise why they continue to believe that Airbee`s
disclosure controls and procedures were effective at March 31,
2005,
despite the existence of the above referenced factors. If your
chief
executive officer and chief financial officer did not consider the
above referenced factors in asserting their conclusion, tell us
why
they were able to determine that the disclosure controls and
procedures were effective without their consideration. See Items
307
and Item 308(c) of Regulation S-B. Please provide the same
analysis
for the fiscal year ended December 31, 2004.
Closing
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. 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.
You may contact Morgan Youngwood at (202) 551-3479, or
Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488, if you have
any questions regarding comments on the financial statements and
related matters. Please contact Adam Halper at (202) 551-3482 or
Jeffrey Werbitt at (202) 551-3456 with any other questions.
Sincerely,
Barbara C. Jacobs
Assistant Director
cc: Brian A. Pearlman
Adorno & Yoss
350 East Las Olas Boulevard
Suite 1700
Fort Lauderdale, Florida 33301
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Mr. Sundaresan Raja
Airbee Wireless, Inc.
Form 10-KSB/A-2
Page 1