October 14, 2005
By facsimile to (949) 625-8885 and U.S. Mail
Ms. Helen C. Cary
President and Chief Executive Officer
Midnight Candle Company
79013 Bayside Court
Indio, CA 92203
Re: Midnight Candle Company
Registration Statement on Form SB-2
Filed September 21, 2005
File No. 333-128477
Dear Ms. Cary:
We reviewed the filing and have the comments below.
Where indicated, we think that you should revise the document
in
response to the comments. If you disagree, we will consider your
explanation why a comment is inapplicable or a revision is
unnecessary. Be as detailed as necessary in your explanation. To
understand better your disclosure, we may ask you in some comments
to
provide us supplemental information. We may raise additional
comments after reviewing this information.
Our review`s purpose is to assist you in your compliance
with
applicable disclosure requirements and to enhance the overall
disclosure in your document. We look forward to working with you
to
achieve these objectives. We welcome any questions that you may
have
about comments or any other aspect of our review. You may call us
at
the telephone numbers listed at the end of this letter.
1. There appears to be a technical error in your EDGAR submission
caused by the fonts and/or text size that you used that prevents
us
from being able to print your document. Before filing the next
amendment to the registration statement, consult the EDGAR manual
on
submission procedures, including fonts/text size. If you require
additional assistance, you may call Filer Support at (202) 551-
8050.
Summary, page 4
2. Disclosure here that MCC plans to market candles "direct to
consumers and businesses" is inconsistent with disclosure in the
financial statements` note 1 that MCC will market the candles
"through charitable organizations." Please reconcile the
disclosures.
3. If MCC intends to market candles through charitable
organizations,
please elaborate on this here and in your Business section.
Explain
how the website links to charitable organizations will work. For
example, will customers have to link to the charitable sites to
purchase the candles? Will the charities receive any portion of
the
proceeds from the sale of the candles? Is it your intention to
ask
the charities to include a link to your website on their own
websites? Disclosure in note 1 to the financial statements
suggests
that this may be the case. Clarify whether MCC has any agreements
with or has contacted any charitable organizations to establish
any
relationship and identify any such organizations in the
prospectus.
4. The financial statements` note 1 states that customers who
purchase the candles "will also benefit from the tax-deductible
status of the charitable organization of their choice." Absent
additional disclosure in the prospectus, it is unclear how
customers
would receive this benefit. Please elaborate.
5. Based on disclosure on page 4, MCC expects to initiate
communications with potential suppliers in the third quarter of
2005
and plans to begin purchasing saleable inventory by the end of the
fourth quarter of 2005. However, based on disclosure on page 18,
it
appears that MCC has pushed back its expectations to the fourth
quarter of 2005 for contacting suppliers and purchasing inventory
to
the second quarter of 2006. Revise to clarify.
6. If MCC has determined the second quarter of 2006 as its
milestone
for purchasing inventory, disclose how this delay will affect
MCC`s
ability to produce the $10,000 in revenues that MCC believes that
it
will need by June 30, 2006 to support its ongoing operations.
Risk Factors, page 7
7. Since disclosures on the prospectus` outside front cover page
and
elsewhere state that the proceeds from the sale of the shares
being
offered will go directly to the selling shareholders and will be
unavailable to MCC, we assume that the statement in the fifth risk
factor that "no alternative sources of funds are available to us
in
the event MCC does not have adequate proceeds from this offering"
is
inadvertent. Please revise.
8. Disclosure on page 19 indicates that if MCC does not produce
sufficient revenues to meet its expenses over the next 12 months,
MCC
may need to raise additional capital by issuing capital stock in
exchange for cash to continue as a going concern. Address in a
discrete risk factor the consequences or effects of any equity
financing on MCC and its shareholders. Further, indicate that MCC
has no formal or informal agreements to obtain financing, if
required.
Determination of Offering Price, page 11
9. Since there is no established market for the securities being
registered, provide disclosure of the factors considered in
determining the offering price of $0.10 per share as required by
Item
505 of Regulation S-B. If you considered no factors other than
what
the selling shareholders had paid for their shares, please make
this
clear.
Plan of Distribution, page 13
10. We assume that this section`s first paragraph`s last sentence
is
inadvertent since it repeats the preceding sentence. Please
revise.
11. Revise this section`s fifth paragraph to state that MCC will
file
a prospectus supplement to name successors to any named selling
shareholders who are able to use the prospectus to resell the
securities.
12. Disclosure in this section`s last paragraph that the selling
shareholders are acting independently of MCC in making decisions
on
the price of the distribution of the shares is inconsistent with
disclosure on the prospectus` outside front cover page and
elsewhere
that MCC determined the price of $0.10 per share at which selling
shareholders using this prospectus must offer and sell the shares
until a trading market develops in MCC`s common stock. Please
revise.
Background of Directors, Executive Officers, Promoters and Control
Persons, page 15
13. Disclosure states that Ms. Helen C. Cary`s work experience
includes "employment contracts" with Armtek Defense Systems and
SpeedFam-IPEC and that she was a production supervisor for CMP
tool
manufacture at both companies. Explain the meaning of "CMP."
Management`s Discussion and Plan of Operation, page 19
14. Disclosure here and on page F-11 that MCC sold 230,000 shares
of
its common stock to 23 unrelated third parties in March and June
2005
is inconsistent with disclosure under "Recent Sales of
Unregistered
Securities" on page 40 and elsewhere that MCC issued the shares to
24
shareholders in June 2005. Please reconcile the disclosures.
15. Disclosure here and under "Number of total employees and
number
of full time employees" that MCC does not anticipate the need to
hire
additional full or part time employees over the next 12 months is
inconsistent with disclosure in the financial statements` note 4
on
page F-11 that management`s plans include "establishment of key
management personnel to support the business plan." Please
reconcile
the disclosures.
Description of Property, page 21
16. Disclosure indicates that MCC`s sole director, officer, and
employee is providing office space at no charge to MCC and that
MCC
believes that it will not need to lease additional administrative
offices for at least the next 12 months. Clarify whether you
believe
that this space is adequate to store any inventory you acquire.
Also
expand the disclosure to indicate whether Ms. Helen C. Cary
intends
to continue to provide office space at no charge to MCC for at
least
the next 12 months. If not, disclose the amount of rent you
expect
to pay to Ms. Cary for the office space.
Statement of Changes in Stockholder`s Equity, page F-4
17. Revise the statement to present the information as required by
paragraph 11(d) of SFAS 7. Specifically, include the date of each
equity issuance.
Exhibits
18. Include an exhibit index immediately before the exhibits. See
Item 601(a)(2) of Regulation S-B.
Exhibit 5
19. Revise the disclosure to indicate that the securities are to
be
sold in the registered offering by the selling shareholders and
not
MCC. Also state clearly that the shares being offered by the
selling
shareholders "are" rather than "will be" legally issued, fully
paid,
and non-assessable.
20. Counsel may not state that it is not an expert within the
meaning
of the Securities Act in its consent, although we will not object
to
a statement that counsel does not admit that it is an expert.
Please
revise the statement that counsel does not "consider" that she is
an
expert accordingly.
Exhibit 23(b)
21. The independent registered public accounting firm must consent
also to being named as an expert in the registration statement.
See
Rule 436 of Regulation C under the Securities Act, and revise.
Closing
File an amendment to the SB-2 in response to the comments.
To
expedite our review, MCC may wish to provide us three marked
courtesy
copies of the amendment. Include with the filing any supplemental
information requested and a cover letter tagged as correspondence
that keys the responses to the comments. If MCC thinks that
compliance with any of the comments is inappropriate, provide the
basis in the letter. We may have additional comments after review
of
the amendment, the responses to the comments, and any supplemental
information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision. Since MCC and its management are in possession
of
all facts relating to the disclosure in the registration
statement,
they are responsible for the adequacy and accuracy of the
disclosures
that they have made.
If MCC requests acceleration of the registration statement`s
effectiveness, MCC should furnish a letter at the time of the
request, acknowledging that:
* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.
* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve MCC from its full responsibility for the adequacy and
accuracy of the disclosure in the filing.
* MCC may not assert our comments and the declaration of the
registration statement`s effectiveness as a defense in any
proceeding
initiated by the Commission or any person under the United States`
federal securities laws.
The Commission`s Division of Enforcement has access to all
information that MCC provides us in our review of the registration
statement or in response to our comments on the registration
statement.
We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.
You may direct questions on accounting comments to Tracey L.
McKoy, Staff Accountant, at (202) 551-3772 or Nilima N. Shah,
Accounting Branch Chief A, at (202) 551-3255. You may direct
questions on other comments and disclosure issues to Edward M.
Kelly,
Senior Counsel, at (202) 551-3728 or me at (202) 551-3760.
Very truly yours,
Pamela A. Long
Assistant Director
cc: Savoy Financial Group
6767 West Tropicana Avenue, Suite 207
Las Vegas, NV 89103
Wendy E. Miller, Esq.
2549B Eastbluff Drive, #437
Newport Beach, CA 92660
Ms. Helen C. Cary
October 14, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE