Mail Stop 3561
August 4, 2005
Adam Gatto
President
Barossa Coffee Company, Inc.
311 S. State, Suite 460
Salt Lake City, Utah 84111
Re: Barossa Coffee Company, Inc.
Registration Statement on Form SB-2
Filed July 11, 2005
Amendment No. 1 to Registration Statement on Form SB-2
Filed July 27, 2005
File No. 333-126514
Dear Mr. Gatto:
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 or may not 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.
Prospectus Cover Page
1. If your prospectus is to be used before the effective date of
the
registration statement, please disclose prominently that the
information in the prospectus will be amended or completed, a
registration statement relating to these securities has been filed
with the Securities and Exchange Commission, the securities may
not
be sold until the registration statement becomes effective, the
prospectus is not an offer to sell the securities, and you are not
soliciting an offer to buy in any state where offers or sales are
not
permitted. See Item 501(a)(10) of Regulation S-B.
2. Please disclose that you do intend to apply for listing of your
shares in the OTC Bulletin Board as you disclose in the Risk
Factors
section.
Prospectus Summary
3. Please clarify that you have no product and you have not
commenced
any operations yet. Also, alert investors that you cannot assure
that you will have any operations in the future, and even if you
do,
you may never become profitable.
4. Please disclose in the summary that you have received a going
concern opinion from your auditors and disclose the dollar amount
of
losses you have incurred, so that readers are immediately aware of
the substantial doubt about your ability to continue as a viable
business entity.
The Offering
5. We note that the clearance of subscription payment in the
escrow
account may take as much as "10 business days." It appears that
this
period of time is so lengthy as to contradict the principle of a
"prompt" refund of the subscription amount and is, therefore,
unacceptable. You may indicate that persons subscribing on the
last
two or three days may take an extra day or two beyond the
termination
date to clear. In this connection, we generally expect funds to
clear an account in a very short period of time. Please make the
necessary changes throughout the prospectus as applicable.
Risk Factors
6. Several of your risk factor headings, as illustrated below in
the
partial list taken from the first page alone, do not identify the
precise nature of harm that may result to your company. Please
revise these risk factor headings so that each of them describes
adequately the material adverse effect of that particular risk
discussed.
* "As a start-up company or development stage entity, we do not
know
when, if ever, our proposed business may become profitable."
* "The amount of capital currently available to us is very limited
and may not enable us to develop or expand our business and
generate
a profit."
* "We would not be able to continue our proposed business without
the
services of the individuals who comprise current management."
"You risk the loss of your entire investment if we are not able to
continue as a going concern."
7. If you succeed in raising the minimum offering in this
offering,
please disclose the dollar amount you will require one year after
the
closing of the offering for you to sustain your operations.
"Our supply costs may be higher than we expect because of
fluctuations in availability and cost of roasted coffee."
8. Please disclose the expected costs involved in acquiring and
operating a coffee-roasting machine, and state, if appropriate,
that
you may not be able to purchase or lease one at all. In this
connection, it appears from the Use of Proceeds section that you
have
reserved $36,000 for this purpose in the case you receive $100,000
in
gross proceeds from this offering. Therefore, please add, if
accurate, that you will not acquire a roasting machine if you fail
to
sell all of the 400,000 shares of common stock you are offering.
"Our common stock is considered a low priced security under rules
promulgated by the Securities and Exchange Commission..."
9. Your shares of common stock will be treated as "penny stock" as
defined by Rule 3a51-1 under the Exchange Act, and thus the shares
are subject to the penny stock rules. Please expand the risk
factor
discussion to clarify that the shares are subject to the penny
stock
rules, and note the risks involved in investing in penny stock.
In
this regard, please specify to the effect that: (i) Commission
rules
impose additional sales practice requirements on broker-dealers
who
sell such securities to persons other than established customers
and
accredited investors; (ii) for transactions covered by the rule,
the
broker-dealer must make a special suitability determination for
the
purchaser and transaction prior to the sale; and (iii) the rule
may
affect the ability of broker-dealers to sell the securities and
also
may affect the ability of purchasers of the shares to sell the
shares
in the secondary market.
Use of Proceeds
10. Please include in the table of receipts and expenditures a
third
column to show how you intend to use the proceeds if you receive
gross proceeds of $75,000, which is the mid-point between the
minimum
offering and the maximum offering. Similarly, include another
column
in the Dilution table to show the dilutive effects if 300,000
shares
are sold.
Management`s Discussion and Analysis
11. Please discuss known material trends and uncertainties that
will
have or are reasonably likely to have a material impact on your
revenues or income or result in your liquidity decreasing or
increasing in any material way. In addition, discuss in
reasonable
detail economic or industry-wide factors relevant to your company,
and material opportunities, challenges and risks in short and long
term and the actions you are taking to address them. See SEC
Release
No. 33-8350.
Business
12. Please disclose the minimum dollar amount required by you to
commence and continue operations for one year in accordance with
your
existing business plan.
Available Information
13. Please remove references to the Commission`s New York and
Chicago
regional offices. See 101(c)(3) of Regulation S-B.
Management
14. Please provide specific dates to account for the business
experience for the past five years of Messrs. Gatto and Briggs.
See
Item 401(a)(4) of Regulation S-B.
Principal Shareholders
15. We note that your counsel beneficially owns 500,000 of your
outstanding shares. Please indicate in the footnote that Mr.
Kimble
is your counsel for this offering. See Instruction 1 to Item 509
of
Regulation S-B.
Plan of Distribution
16. Since this is a self-underwritten offering, please provide us
your legal analysis whether the principal shareholders need to
register as broker-dealers. Refer to Rule 3a4-1 of the Securities
Exchange Act of 1934. State your conclusions in this section of
the
prospectus.
17. Given the absence of a market in your securities, please
disclose
the basis of how you determined the offering price of $0.25 per
share
of common stock you are offering. If the offering price is
arbitrarily determined by you, and bears no relationship
whatsoever
to your assets, earnings, book value, or any other objective
standards of value, include a separate risk factor warning
investors
that subscribers run the risk of paying an amount in excess of
what
they will ultimately receive.
18. We note that your affiliates may purchase securities in this
offering. Please represent, if appropriate, that you have no
understanding, commitment, or agreement, written or oral, to offer
or
sell the securities to any individual or entity. If applicable,
disclose who will purchase the securities and in what amount, and
whether they may subscribe on the same terms and conditions as
other
purchasers. Finally, disclose whether your affiliates` purchases
would count toward the minimum necessary to close the offering,
and
whether such purchases would be for investment purposes.
19. We note that you refer to certain circumstances that would
constitute material changes to the terms of this offering, which
would terminate the original offer. Please confirm your
understanding that in such an event you would need to file a new
registration statement to recommence the offer.
20. Please provide a list of events or contingencies that would
have
to occur as conditions precedent for you to extend the termination
period of this offering. In this connection, include a firm
statement indicating the final date beyond which the offering will
not be extended under any circumstances.
21. Please discuss the material terms of your escrow agreement
with
Brighton Bank, including the fact that the escrow agent will
"promptly" transmit to investors who have subscribed the funds
deposited in it after the termination of the offering.
Financial Statements
General
22. We assume your fiscal year end is June 30. Please clearly
disclose your fiscal year end in your next amendment.
Exhibits Index
23. Please renumber your articles of incorporation and consent of
counsel appropriately according to the numbers assigned to them in
Item 601 of Regulation S-B.
* * * * *
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 the filing includes all information required under
the
Securities Act of 1933 and they have provided all information
investors require for an informed investment 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 staff comments and the declaration
of
effectiveness 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.
You may contact David DiGiacomo, Staff Accountant, at (202)
551-
3319, or George Ohsiek, Accounting Branch Chief, at (202) 551-3843
if
you have questions regarding comments on the financial statements
and
related matters. Please contact Pradip Bhaumik, Attorney-Advisor,
at
(202) 551-3333, or me at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Van L. Butler, Esq.
Thomas G. Kimble & Associates
Fax: (801) 359-6603
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Adam Gatto
Barossa Coffee Company, Inc.
August 4, 2005
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