August 12, 2005
VIA FACSIMILE
C. Dean McLain
Chief Executive Officer
Western Power & Equipment Corp.
6407-B N.E. 117TH AVE
Vancouver, WA 98662
Re: Western Power & Equipment Corp.
Registration Statement on Form S-1
Filed July 22, 2005
File No. 333-126854
Annual Report for Fiscal Year Ended July 31, 2004 and
Filed October 29, 2004
Quarterly Report on Form 10-Q for the period ending April 30,
2005
Filed June 14, 2005
File Number 0-26230
Dear Mr. McLain:
We have limited our review of your filing to those issues we
have addressed in our 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 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.
General
1. Please include a consent from your independent registered
public
accounting firm for each of the three years of your financial
statements presented in your filing. Please also include a
consent
from your independent registered public accounting firm for each
of
the two years of financial statements for Arizona Pacific
Materials,
LLC presented in your filing.
Cover Page of Prospectus
2. Please revise the first sentence on this page to read that the
prospectus relates to the "resale" rather than "sale" of common
shares.
3. Please clarify the statement here that the shares being
registered
are, in part, for certain persons "who will become" shareholders
as
well as footnote 6 to the fee table that some shares "consist of
an
additional 30% of the maximum number of shares issuable to certain
selling shareholders." For instance, do these shares underlie
options, notes, or warrants? Please clarify under what conditions
the rights to these unissued shares were granted. Also, in the
Summary and the Selling Stockholder sections, you refer to these
shares as being registered but not offered. Please explain what
you
mean by "registered but not offered under any current
arrangement."
We may have further comment.
Risks Relating to Our Current Financing Agreement, page 7
4. Please add a risk factor that discusses risks related to short-
selling and its likely impact on the market price of your stock.
Selling Security Holders, page 37
5. Please describe here the material transactions and
relationships
between your company and each of the selling shareholders during
the
past three years. See Item 507 of Regulation S-K. Please briefly
describe the transactions in which you issued the convertible
securities or shares to be resold in materially complete terms,
including the basic terms of all the issuance transactions,
including
the dates the transactions took place, the material terms of the
transactions, the parties who participated in the transactions and
the number of convertible securities or shares received by them.
6. Please revise your disclosures to identify the natural person
or
persons who have voting or investment control over the company`s
securities that each non-reporting entity owns. See
Interpretation
4S.of Regulation S-K Item 507 in the March 1999 supplement of the
manual of publicly available CF telephone interpretations.
7. Revise the selling shareholder table to include a line that
shows
the total number of shares to be offered in this prospectus.
Plan of Distribution, page 38
8. Please tell us whether any of the selling shareholders are
broker-
dealers or affiliates of broker-dealer. If any selling
shareholder
is a registered broker-dealer, it should be named as an
underwriter.
If the selling shareholder is an affiliate of a registered broker-
dealer, expand the prospectus to indicate whether it acquired the
securities to be resold in the ordinary course of business. Also
indicate whether at the time of the acquisition it had any
agreements, understandings or arrangements with any other persons,
either directly or indirectly, to dispose of the securities.
9. We note the disclosure in the second full paragraph regarding
the
use of Rule 144 under the Securities Act. Please describe the
requirements of Rule 144 in greater detail. For example, we note
that selling security holders which acquired shares in the June 9,
2005 transaction have not held shares for more than one year.
10. Please revise this section to state that if an underwriter is
used in the resale of the shares, you will file a post-effective
amendment to disclose the name of the underwriter and discuss the
material terms of any agreement.
11. Tell us what steps you have implemented to ensure that each of
the selling stockholders will conduct the distribution in
accordance
with Regulation M. See paragraph (b)(7) of Rule 461.
Note 13. Subsequent Events, page F-12
12. We note that of the $32 million senior credit facility raised
from the sale of debentures and a note, you have used $25.5
million
to repay a credit and forbearance agreement with GE Commercial
Distribution Finance Corporation and to pay off the purchase note
of
Arizona Pacific Materials. Supplementally, please clarify whether
you have received the remainder of the proceeds of the senior
credit
facility and/or whether the funds are in an escrow or other
similar
account controlled by you. Please file any escrow agreements or
side
letters as exhibits.
Recent Sales of Unregistered Securities, page II-1
13. We note that as part of the June 9, 2005 financing, you
provided
the purchasers of the debentures the right, through exercise of
Series C Warrants, to purchase additional Series A Debentures and
Warrants. Please disclose whether or not these additional Series
A
Debentures and Warrants were ever issued. Given this right, it
appears that the offering was a continuous private offering.
Therefore, by registering the resale of some of the securities
issued
in the private placement to the debenture investors, you may have
violated Section 5 of the Securities Act. A private offering must
be
completed before the resale of any of the securities offered and
sold
privately may be registered for resale. Supplementally, please
provide us with an analysis which supports your apparent
conclusion
that the private placement was completed before you filed the
registration statement and that you have complied with Section 5
of
the Securities Act in connection with the offer of the additional
Series A Debentures and Warrants.
Signatures
14. Please identify your principal accounting officer or
controller.
Exhibits
15. Please file your legality opinion with your next amendment as
we
need time to review and possibly comment upon it.
Annual Report for Fiscal Year Ended July 31, 2004
Quarterly Reports on Form 10-Q for the periods ending April 30,
2005,
January 31, 2005, and October 31, 2004
Controls and Procedures
16. We note your citation to Exchange Act Rule 13a-15. However,
disclosure controls and procedures are now defined in Exchange Act
Rules 13a-15(e) and 15d-15(e). See SEC Release 33-8238, which
became
effective August 14, 2003. Please refer to the appropriate
citations
for the definitions in future filings.
17. We also note your statement in your quarterly reports that "no
evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company
have
been detected." Please confirm to us supplementally, if true,
that
your disclosure controls and procedures are designed to provide
reasonable assurance of achieving their objectives and that your
principal executive officer and principal financial officer
concluded
that your disclosure controls and procedures are effective at that
reasonable assurance level. In the alternative, remove the
reference
to the level of assurance of your disclosure controls and
procedures.
Please refer to Section II.F.4 of Management`s Reports on Internal
Control Over Financial Reporting and Certification of Disclosure
in
Exchange Act Periodic Reports, SEC Release No. 33-8238, available
on
our website at <http://www.sec.gov/rules/final/33-8238.htm>.
Please
note this guidance and make appropriate disclosures in your
subsequent quarterly reports.
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 amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that 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 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.
Please contact Craig Slivka, Staff Attorney at (202) 551-
3729,
or in his absence Lesli Sheppard, Senior Staff Attorney, at (202)
551-3708 with any other questions.
Sincerely,
Pamela A. Long
Assistant Director
CC: Jay M. Kaplowitz
(212) 980-5192
??
??
??
??
C. Dean McLain
Western Power & Equipment Corp.
Page 1 of 5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404
DIVISION OF
CORPORATION FINANCE