Room 4561
June 10, 2005
Mr. Amrit K. Das
Chief Executive Officer
netGuru, Inc.
22700 Savi Ranch Parkway
Yorba Linda, California 92887
Re: netGuru, Inc.
Registration Statement on Form S-3 filed May 13, 2005
File No. 333-124920
Form 10-K for the year ended December 31, 2004
Form 8-K filed December 30, 2004
File No. 0-28560
Dear Mr. Das:
This is to advise you that we have limited our review of the
above registration statement and reports to the matters addressed
in
the comments below. No further review of the registration
statement
or reports has been or will be made. All persons who are by
statute
responsible for the adequacy and accuracy of the registration
statement are urged to be certain that all information required
under
the Securities Act and Exchange Act has been included.
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 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. We note that your audited balance sheet and audited statements
of
income and cash flow are as of and for the year ended March 31,
2004.
Pursuant to Item 310(g) of Regulation S-B, your registration
statement must include audited financial statements for the most
recent fiscal year. Please refile your registration statement
with
appropriate financial statements and revise your disclosure as
necessary.
2. In section 3.2 in each of the securities purchase agreements
dated
December 23, 2004 and December 4, 2003, reference is made to an
escrow agreement. Please provide us copies of the agreements and
in
your response letter explain the purpose and effect of such
agreements. Tell us why these escrow agreements were not filed as
exhibits to the Form 8-K filed December 30, 2004 or your Form S-3
filed January 26, 2004, as applicable. Provide us with a copy of
any other agreements between NetGuru, Laurus Master Fund and any
third parties concerning the notes and warrants sold on December
23,
2004 and December 4, 2003, that were not filed with the Form 8-K
or
Form S-3, respectively. Tell us the amount conveyed by Laurus
Master
Fund to NetGuru in payment for the notes and when and how those
funds
were transferred. Describe the function of the escrow agreement,
escrow agent or other parties in this process.
Selling Security Holders
Selling Security Holders Table, p. 16
3. Please disclose the natural persons who exercise the voting
and/or
dispositive powers with respect to the securities to be offered
for
resale by your selling securityholders that do not file periodic
reports under the Exchange Act. We note that certain selling
securityholders, such as GRAL, do not disclose the individuals who
exercise these powers. Please see Interpretation I.60 of our July
1997 Manual of Publicly Available Telephone Interpretations and
Interpretation 4S of the Regulation S-K portion of the March 1999
Supplement to our July 1997 Manual of Publicly Available Telephone
Interpretations.
4. Please disclose whether any selling securityholder is a
registered
broker-dealer. If a selling securityholder is a registered
broker-
dealer, please identify such registered broker-dealer as an
underwriter in your disclosure, unless the shares were acquired as
transaction-based compensation for investment-banking services.
Provide a description of the investment-banking services and the
manner in which the compensation for the services was computed, as
applicable. We note that you have identified The Seidler
Companies
and First Montauk Securities as registered broker-dealers.
5. Please disclose whether any selling securityholder is an
affiliate
of a registered broker-dealer. If a selling securityholder is an
affiliate of a registered broker-dealer, please expand the
prospectus
disclosure to indicate whether such selling securityholder
acquired
the securities to be resold in the ordinary course of business.
Also
indicate whether at the time of the acquisition such selling
securityholder had any agreements, understandings or arrangements
with any other persons, either directly or indirectly, to dispose
of
the securities.
Private Placements Through which the Selling Security Holders...
Laurus Master Fund, Ltd. Strategic Financings, p. 19
6. Please advise us of the reason for amending and restating your
December 2003 note. Tell us the nature of the changes that
affected
the economics of the creditor-debtor relationship, in addition to
the
increase in the monthly payment amounts. For example, if the
conversion rights of the noteholder were modified, please describe
the change. In your response letter, please describe all
significant
changes to the note when it was amended and restated on April 27,
2004. Please advise whether and, if so, when shares were issued
and
resold pursuant to the prior registration statement.
Other Selling Security Holders, p. 26
7. We note your disclosure regarding the issuance of warrants to
J.P.
Turner and Company, The Seidler Companies and Silverman Heller
Associates as partial consideration for strategic investor
relations`
services. Please elaborate to discuss how such warrants only
represented partial consideration for such services.
8. Please provide additional context in your disclosure for the
transactions in which your selling securityholders obtained their
securities. For example, please elaborate on the settlement
agreement with GRAL and the financing agreement with Mr. Kellogg
as
well as provide additional detail on the services Mr. Niwayama and
certain of your optionees provided to you.
Plan of Distribution
9. We note your reference to agreements by certain selling
securityholders in which they have agreed to certain restrictions
on
their resale of shares of your common stock. Please file such
agreements as exhibits to your registration statement.
Item 16. Exhibits
10. Pursuant to Item 601(b) of Regulation S-K, please ensure that
you
have filed all necessary exhibits in this registration statement
including opinions and material agreements, such as outstanding
warrants and agreements remaining to be performed at or after the
filing of your registration statement, e.g., agreements with
continuing registration rights. Please note that Rule 429(b)
under
the Securities Act states that this registration statement shall
act
as a post-effective amendment to the prior registration statements
whose prospectuses have been combined in this registration
statement.
As a result, all necessary exhibits relating to shares registered
in
prior registration statements should be referenced in the exhibit
index and incorporated by reference from the prior filing, or
should
be filed with this registration statement.
* * * *
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 related to your 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 the 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 your registration statement as a confirmation of
the fact that those requesting acceleration are aware of their
respective responsibilities under the Securities Act and the
Exchange
Act 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 Rule 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 Daniel Lee at (202) 551-3477 with any
questions. If you need further assistance, you may contact me at
(202) 551-3462 or Barbara C. Jacobs, Assistant Director, at (202)
551-3730.
Sincerely,
Mark P. Shuman
Branch Chief - Legal
cc: Via Facsimile
Nimish Patel, Esq.
Richardson & Patel LLP
10900 Wilshire Boulevard, Suite 500
Los Angeles, California 90024
Telephone: (310) 208-1182
Facsimile: (310) 208-1154
Cristy Lomenzo Parker, Esq.
Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Telephone: (714) 641-5100
Facsimile: (714) 546-9035