Mail Stop 7010
August 19, 2005
via U.S. mail and Facsimile
Stephen R. Light
President and Chief Executive Officer
Flow International Corporation
23500 64th Avenue South
Kent, WA 98032
Re: Flow International Corporation
Form S-1/A filed August 8, 2005
File No. 333-125113
Dear Mr. Light:
We have limited our review of your filing to those issues we
have addressed in our comments. Feel free to call us at the
telephone numbers listed at the end of this letter.
Form S-1/A filed August 8, 2005
Prospectus Cover Page
1. It appears that Rule 2520 relates to margin requirements.
Please
tell us the basis for the increase and if it is because of Rule
2520,
how this relates to your increase.
Risk Factors, page 5
2. We note your response to prior comment five. We also note the
selling shareholder section in which you discuss the limitations
upon
the selling shareholders` ability to enter into short sales.
Please
provide a cross-reference to that discussion.
3. We note your response to prior comment six. It appears that we
mistakenly referred to underwriters instead of lenders. We note
that
you issued a number of anti-dilution warrants to your lenders
because
the common shares issued in the PIPE transaction were issued at
less
than market price. Please tell us whether under your credit
agreements, you are required to issue additional anti-dilution
warrants to your lenders in the future. To the extent that you
would
be required to issue additional anti-dilution warrants to your
lenders in the future, you should provide the information
requested
in prior comment six.
Selling Stockholders, page 64
4. We note your response to prior comment seven; however, we
believe
that you should include a separate section titled "Certain
Relationships and Related Transactions" for information about
material relationships and related transactions, in addition to
the
information about material relationships required in the selling
shareholder section. See Item 404 and Item 507 of Regulation S-K.
In addition, you should state, if true, that you entered into a
Securities Purchase Agreement with accredited investors and the
units
were issued to these investors in a private placement. You should
also state the exemption relied upon to offer and sell the
securities
in the private placement and discuss the facts that support the
exemption. In addition, you should disclose the name of any
placement agent used in the transaction.
5. We note your response to prior comment four. Rather than
merely
juxtaposing the purchase price of the common shares with the
closing
price of the stock the day the PIPE agreement was entered into,
please specifically disclose the percentage of the discount
received
by the selling shareholders. With regard to the common shares
underlying the warrants, please provide the percent discount
received
if the warrants had been exercised on the day the PIPE agreement
was
entered into.
Plan of Distribution, page 69
6. We note your response to prior comment 11. As previously
requested, please tell us whether any of the selling shareholders
are
an affiliate of a broker-dealer. In this regard, we note the last
sentence in the seventh paragraph.
7. We note your revised disclosure that Bank of America Securities
is
a registered broker-dealer; however, it does not appear that you
have
named Bank of America Securities as an underwriter. Please
revise.
8. We note your response to prior comment 13. Please tell us the
significance of the 500 share threshold for filing a prospectus
supplement. For example, state whether this threshold is pursuant
to
a contractual obligation you have with the selling shareholders.
In
addition, please clarify that the 500 share threshold does not
limit
your obligation to file a prospectus supplement or post-effective
amendment to disclose a fundamental change in the information set
forth in the registration statement or to include material
information with respect to the plan of distribution or any other
material change to such information. See Item 512(a) of
Regulation
S-K.
9. Please tell us what you mean when stating that a prospectus
supplement or post-effective amendment will disclose "where
applicable, that such broker-dealers did not conduct any
investigation to verify the information set out or incorporated by
reference in this prospectus and other facts material to the
transaction." It appears that what you are saying is that future
broker-dealers may not perform due diligence with regard to the
use
of the prospectus and are disclaiming responsibility. Please
advise.
10. Please delete the statement "The SEC staff is of the
view...underwriters under the Securities Act." Our prior comment
11
stated that any registered broker-dealers should be named as
underwriters and requested additional information be included in
the
prospectus if any selling shareholder is an affiliate of a broker-
dealer.
Exhibit 5.1
11. Please confirm in writing that you concur with our
understanding
that the reference and limitation to "Washington Business
Corporation
Act" includes the statutory provisions of the Washington
Constitution
and reported judicial decisions interpreting these laws.
12. We note the statement in the penultimate paragraph that you
"undertake no obligation and hereby disclaim any obligation to
advise
upon any change in law, facts or circumstances, occurring after
the
date hereof...". Given that you do not intend to update the
opinion,
we believe your opinion should be revised to state that your
opinion
is provided as of the date the registration statement becomes
effective or you should provide an updated opinion immediately
preceding the time the registration statement becomes effective.
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 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 they have provided all information investors require
for
an informed 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 this action 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.
Please direct questions on disclosure issues to Tamara
Brightwell, Staff Attorney, at (202) 551-3751 or, in her absence,
to
me at (202) 551-3767.
Sincerely,
Jennifer Hardy
Branch Chief
cc: Robert S. Jaffee
William Gleeson
Preston Gates & Ellis LLP
925 Fourth Avenue, Suite 2900
Seattle, WA 98104
??
??
??
??
Stephen R. Light
Flow International Corporation
August 19, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE