November 15, 2005
via U.S. Mail
George J. Zilich
Chief Financial Officer and General Counsel
BPI Industries Inc.
30775 Bainbridge Road, Suite 280
Solon, Ohio
44139
Re: BPI Industries, Inc.
Amendment No. 3 to the Registration Statement on
Form S-1
Filed October 28, 2005
File No. 333-125483
Dear Mr. Zilich:
We have reviewed your amended 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 information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.
Form S-1
Change in Auditor, page 55
1. Please revise your disclosure to clarify, if true, that the
audit
report issued by DeVisser Gray, Chartered Accountants included an
explanatory paragraph regarding your uncertainty with regard to
your
ability to continue as a going concern rather than it being
qualified.
Consolidated Financial Statements, page F-1
2. Please discuss your registration rights agreements in your
footnotes and clearly outline its requirements and any related
damages or penalties that may be or have been incurred. Disclose
the
amount of damages accrued in the accompanying financial statements
and specify the line items where the damages have been reported
and
how the amount was determined. Further, disclose the potential
amount of damages possible under the agreements, the existence of
any
cap on such damages, and whether the damages will be settled in
shares or cash.
Notes to Consolidated Financial Statements, page F-8
Note 10. Technical Services Agreement, page F-22
3. We have reviewed your response to prior comment number five of
our
letter dated September 19, 2005. As previously requested, please
address each of the following:
* We note that your disclosure on page two indicates that BHP will
provide its MRD techniques and know-how, provide an assessment of
the
application of the TRD technology. Please explain in greater
detail
how you determined the fair value of the services to be provided
over
the term of the agreement. It continues to be unclear how $18,000
represents the fair value of the technical services being
provided.
Your disclosure and response to prior comment number eight
indicates
that you are receiving technical services and know-how rather than
administrative support.
* Please indicate your accounting policy and frequency of
determining
the fair value of the stock appreciation rights. Also explain why
it
is appropriate to assess whether or not the fair value of the
stock
appreciation rights is more readily determinable than the fair
value
of the services on an annual basis.
Note 17. Supplemental Oil and Gas Data, page F-23
Costs Incurred in Oil and Gas Exploration and Development
Activities,
page F-23
4. Please explain why you reported amounts for development costs
incurred during 2003. We note your disclosure that prior to 2005
all
costs were considered exploration costs.
5. Please explain why you have disclosed information regarding
your
unproved properties in an unaudited footnote. Refer to Rule 4-
10(c)(7) of Regulation S-X.
Standardized Measure of Discounted Future Net Cash Flows, page F-
25
6. Please reconcile for us the standardized measure of discounted
future net cash flows between the disclosure on page F-25 and the
second table on page 34. To the extent that any differences
between
the two presentations relate to the disclosure of a measure that
is
not calculated as defined in SFAS 69 note that this disclosure
could
be considered a non-GAAP measure. As such, you must provide all
disclosures required by Item 10(e) of Regulation S-K. The
disclosures should include a reconciliation to the most direct
comparable GAAP financial measure, which would be the standardized
measure of discounted future net cash flows relating to proved oil
and gas reserve quantities as set forth in paragraph 30 of SFAS
69.
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.
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 an 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 Ryan Milne at (202) 551-3688 or in her
absence,
Jill Davis, Accounting Branch Chief at (202) 551-3683 if you have
comments on the financial statements and related matters. Please
contact Mellissa Campbell Duru, at (202) 551-3757 or me at (202)
551-
3745 with any other questions.
Sincerely,
H. Roger Schwall
Assistant Director
cc: via facsimile
Derek Bork, Esq.
Thompson Hine LLP
(216) 566-5500 (fax)
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Mr. Zilich
BPI Industries Inc.
November 15, 2005
page 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010