July 14, 2005
By facsimile to (212) 480-0717 and U.S. Mail
Mr. Colin Hendrick
President and Chief Executive Officer
SmartMetric, Inc.
67 Wall Street, 22nd Floor
New York, NY 10005
Re: SmartMetric, Inc.
Pre-effective Amendment 5 to Registration Statement on Form
SB-2
Quarterly Report on Form 10-QSB for the quarter ending March
31,
2005
Filed June 27, 2005
File No. 333-118801
Dear Mr. Hendrick:
We reviewed the filings and have the comments below.
SB-2
Prospectus` Outside Front Cover Page
1. Include a cross reference to the risk factors section,
including
the page number where it appears in the prospectus. Highlight
this
cross reference by prominent type or in another manner. See Item
501(a)(5) of Regulation S-B.
Risk Factors, page 7
2. Refer to prior comment 3. As requested previously, remove the
statement that "these shares may have to be integrated our
registered
public offering so that the number of shares we may sell to the
public will be reduced by the shares sold without registration."
Since SmartMetric sold the shares without registration,
SmartMetric
may not replace them with registered shares.
3. Expand the disclosure in the seventeenth risk factor to
indicate
that SmartMetric would be liable in an amount up to $241,256 for
the
160,836 shares of common stock sold if the investors exercise
their
rescission rights and are successful. We note the disclosure
under
"Rescission rights" in note 10 to the financial statements.
4. We note that the revised independent auditor`s report states
that
SmartMetric`s financial statements have been prepared assuming
that
SmartMetric will continue as a going concern. Include as a
discrete
risk factor the risks in using SmartMetric`s financial statements
because they do not include any adjustments to asset carrying
value
or the classification of liabilities that might result should
SmartMetric be unable to continue as a going concern.
Selling Shareholders, page 28
5. It is unclear why the line entry "Colleen R. King Pty Ltd."
omits
share data information. Please revise.
Recent Sales of Unregistered Securities, page 36
6. Refer to prior comment 22. Disclosure here that you sold
92,630
shares of common stock to 11 people, including Leslie Vago, in
December 2004 through January 2005 is inconsistent with the
supplemental information in which you state that October 27, 2004
is
the subscription date for Leslie Vago. Please revise here and
elsewhere in the registration statement, including the seventeenth
risk factor.
Consolidated Balance Sheet at March 31, 2005
7. We understand from note 10 to the consolidated financial
statements that the investors who purchased your shares that were
sold in the private placements in November 2004 and January 2005
"may
have rescission rights under federal securities laws." Since
stock
subject to rescission rights are considered to be redeemable
equity
securities whose redemption is outside of your control, these
shares
should be classified outside of permanent equity. Revise your
consolidated balance sheet at March 31, 2005 to reclassify the
applicable shares as required by SFAS 150 and Rule 5.02.28 of
Regulation S-X. Also revise your consolidated statements of
changes
in stockholders` equity and your Form 10-QSB for the fiscal
quarter
ended March 31, 2005 to reflect this reclassification.
Exhibit 5.1
8. In the second paragraph, counsel`s opinion covers only
8,628,484
of the shares of common stock to be sold by the selling
shareholders.
Revise to cover all 8,721,094 shares of common stock being offered
by
the selling shareholders.
9. In the fifth paragraph, counsel`s opinion covers only
11,628,464
shares to be sold by the selling shareholders. Revise to cover
all
11,721,094 shares being offered by the selling shareholders.
Signatures
10. Refer to prior comment 25. As noted previously, SmartMetric`s
controller or principal accounting officer also must sign the
registration statement. Any person who occupies more than one of
the
specified positions, for example, principal financial officer and
controller or principal accounting officer, must indicate each
capacity in which he signs the registration statement. If Mr.
Hendrick is signing the registration statement as principal
financial
officer and as controller or principal accounting officer, he must
indicate each capacity in which he is signing the registration
statement. See instructions 1 and 2 for signatures on Form SB-2,
and
revise.
March 31, 2005 10-QSB
Exhibits 31.1, Section 302 Certificates
11. Refer to prior comment 26. As requested previously, revise by
amendment to the 10-QSB the section 302 certifications to provide
the
exact wording as specified by Item 601(b)(31) of Regulation S-B.
Specifically,
* In paragraph 4, the Exchange Act rules that you should cite are
"Rules 13a-15(e) and 15d-15(e)."
* In paragraph 5, after the words "recent evaluation," add the
words
"of internal control over financial reporting."
* In paragraph 5(a) after the words "significant deficiencies,"
add
the words "and material weaknesses."
* In paragraph 5(a) after the words "design or operation of
internal
controls," add the words "over financial reporting."
Closing
File amendments to the SB-2 and the 10-QSB in response to the
comments. To expedite our review, you may wish to provide us
three
marked courtesy copies of the amendments. Include with the filing
any supplemental information requested and a cover letter tagged
as
correspondence that keys the responses to the comments. If you
think
that compliance with any of the comments is inappropriate, provide
the basis in the letter. We may have additional comments after
review of the amendments, the responses to the comments, and any
supplemental information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision. Since SmartMetric and its management are in
possession of all facts relating to the disclosure in the
registration statement, they are responsible for the adequacy and
accuracy of the disclosures that they have made.
If SmartMetric requests acceleration of the registration
statement`s effectiveness, SmartMetric should furnish a letter at
the
time of the request, acknowledging that:
* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.
* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve SmartMetric from its full responsibility for the adequacy
and
accuracy of the registration statement`s disclosures.
* SmartMetric may not assert our comments and the declaration of
the
registration statement`s effectiveness as a defense in any
proceeding
initiated by the Commission or any person under the United States`
federal securities laws.
The Commission`s Division of Enforcement has access to all
information that you provide us in our review of the registration
statement or in response to our comments on the registration
statement.
We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.
You may direct questions on accounting comments to Dale
Welcome,
Staff Accountant, at (202) 551-3865 or Jeanne K. Baker, Assistant
Chief Accountant, at (202) 551-3691. You may direct questions on
other comments and disclosure issues to Edward M. Kelly, Senior
Counsel, at (202) 551-3728 or me at (202) 551-3760.
Very truly yours,
Pamela A. Long
Assistant Director
cc: Andrea I. Weinstein, Esq.
Schonfeld & Weinstein, L.L.P.
80 Wall Street, Suite 815
New York, NY 10005
Mr. Colin Hendrick
July 14, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE