Mail Stop 3561
July 12, 2005
Jonathan Lei
President
Roaming Messenger, Inc.
50 Castilian Drive, Suite A
Santa Barbara, CA 93117
Re: Roaming Messenger, Inc.
Amendment One to Registration Statement on Form SB-2
Filed June 23, 2005
File No. 333-124600
Form 10-KSB for Fiscal Year Ended June 30, 2004
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
Form 10-QSB/A for Fiscal Quarter Ended March 31, 2005
File No. 0-13215
Dear Mr. Lei:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents 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
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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Amendment One to Registration Statement on Form SB-2
1. Please refer to comment 4 in our letter dated June 2, 2005. We
note your revisions to your disclosure. We reissue our prior
comment
4. Please revise your Summary to briefly and clearly describe how
your product works and its advantage over other communication
systems.
2. Similarly, please refer to comments 16 and 23 in our letter
dated
June 2, 2005. We reissue our prior comments 16 and 23. Please
revise your Management Discussion and Analysis and your Business
disclosure to more clearly describe how your product works and its
advantage over other communication systems.
3. Also, we note that your Summary and Management Discussion and
Analysis disclosures are very similar. The Summary should be
brief
but informative. The Management Discussion and Analysis should
provide greater details concerning your business and the roaming
messenger system.
4. We note the changes you have made in your Management Discussion
and Analysis disclosure in response to comment 22 in our letter
dated
June 2, 2005.
Please expand your discussion to include some of the risk
associated
with the periodic equity agreement that would impact your
liquidity
and capital resources.
Directors and Executive Officers, page 18
5. Please refer to comment 26 in our letter dated June 2, 2005.
We
note the changes you have made in your disclosure in response to
our
comment. We reissue our prior comment 26. Please disclose the
background of Mr. Dhillon for the year 1999 and about Mr.
Djokovich
for the year 2003.
2. Summary of Significant Accounting Policies, page F-6
Revenue Recognition, page F-7
6. We note your response to comment 33 in our letter dated June 2,
2005. Please tell us your policy for recognizing one-time license
fees associated with customer activation. Tell us if you
recognize
the one-time fee at inception, defer recognition until the end of
the
agreement or allocate the revenue over the agreement term based on
some other systematic approach. In your response include
applicable
accounting pronouncements that support your policy and the amount
of
revenue recognized for each statement of operations and deferred
as
of each balance sheet date. Additionally, tell us why you record
revenue and cost of revenue for third party online marketing
services
on a gross basis rather than net. In your response include the
indicators of gross revenue reporting outlined in EITF No. 99-19
or
01-09, as applicable, and the amount of revenue and cost of
revenue
recognized for each statement of operations. Include these
policies
in your next amendment to Form SB-2.
8. Stock Options and Warrants, page F-13
7. We note your response to comment 34 in our letter dated June 2,
2005. We note your representation accelerating the vesting period
is
a modification of awards; however, we do not understand how you
determined the incremental compensation cost was $0 at the
modification date. Please tell us the original intrinsic value,
the
intrinsic value at the modification date, the number of
accelerated
awards and the amount of compensation expense recorded at each
measurement date. Include your basis for the current price of the
underlying stock in determining the intrinsic value of stock
option
awards.
8. We note your response to comment 35 in our letter dated June 2,
2005. We still do not understand why the number of warrants and
exercise prices do not reconcile. Please advise or revise your
disclosure on page 26 and the tabular information in footnote 8 to
reconcile and disclose the aggregate amount of outstanding
warrants.
See Rule 4-08(i) of Regulation S-X.
12. Subsequent Events, page F-17
9. We note your response to comment 37 in our letter dated June 2,
2005. Please advise or revise your disclosure to describe the
event
of default under the Registration Rights Agreement and state Wing
Fund Inc. waived the right to require you to issue an additional
200,000 common shares as a result of failing to prepare and file a
registration statement by March 28, 2005.
Form 10-QSB for Fiscal Quarter Ended March 31, 2005
Form 10-QSB/A for Fiscal Quarter Ended March 31, 2005
10. As applicable, please revise your Form 10-QSB to address the
comments above as well.
Exhibits 31.1
11. Your certifications are missing paragraph 4(d). Accordingly,
please amend your Form 10-QSB in its entirety with the
certification
in its correct form.
*****
As appropriate, please amend your registration statement and
periodic report 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 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 Brian McAllister, Staff Accountant at (202)
551-3341 or Mike Moran, Accounting Branch Chief at (202) 551-3841
if
you have questions regarding comments on the financial statements
and
related matters. Please contact Scott Anderegg, Staff Attorney at
(202) 551-3342 or David Mittelman, Legal Branch Chief at (202)
551-
3241 me at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Gregory Sichenzia, Esq.
Sichenzia Ross Friedman Ference LLP
Via Fax (212) 930-9725
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Jonathan Lei
Roaming Messenger, Inc.
July 12, 2005
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