Mail Stop 3561
November 21, 2005
Audrey Reich, President
Dynamic Alert Limited
45563 RPO Sunnyside
Surrey, B.C. Canada
V4A 9N3
Re: Dynamic Alert Limited
Registration Statement on Form SB-2
Amendment No. 4 filed October 7, 2005
File No. 333-119566
Dear Ms. Reich:
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 supplemental 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 on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. In the next amendment, please correct to avoid the printing of
excessive blank pages in the filing transmitted via EDGAR.
2. Please insure that your pages are correctly numbered in order.
Outside Front Cover of Prospectus
3. Please identify the persons that will be selling the securities
for the company. For example, please describe whether the
securities
will be offered by officers or directors of the company. See Item
501(a)(9)(ii) of Regulation S-B.
Prospectus Summary and Risk Factors
The Company, page 4
4. With respect to the staff`s previous comment four in our letter
dated August 11, 2005, please revise your disclosure to provide
more
specificity with regards to the company`s business plan and its
day-
to-day operations. We further note under "Website Development" on
page 8 that "[W]e will require minimum funds of $19,000 in order
to
allocate no less than $2,000 for the development of our website."
However, we also note the table at the top of page 9 which shows
$2,500 being allocated to website development under the 10%
scenario,
(receiving $9,000 from the offering). Please reconcile.
5. We not your response to our previous comment five in our letter
of
August 11, 2005 and we reissue the comment. We did not find the
additional disclosure related to the comment. Further discuss the
concern if the company fails to raise an additional $20,000 to
remain
operational for the next twelve months. Clearly discuss your
business and your day-to-day operations if you do not raise the
$39,000.
Risk Factors, page 5
6. Please avoid the generic conclusion you reach in some of your
risk
factor subheadings and narratives such as "May Limit Dynamic`s
Success." Instead, replace this language with specific disclosure
of
how your business and operations would be affected.
7. Please include a risk factor regarding the auditor`s opinion
that
there are substantial doubts about the company`s ability to
continue
as going concern.
8. Please include a risk factor regarding your poor financial
position. See Item 503(c) of Regulation S-B.
9. Please revise risk factor two to discuss whether Audrey Reich,
the
President of the company, has any professional experience
involving
personal security services or selling and marketing security
products. Also, please revise the risk factor narrative to focus
on
the risk.
10. In the last risk factor, please reconcile the risk factor
subheading with the risk factor narrative. Please explain whether
the plan of operations will commence if none or some of the
proceeds
are raised. You may want to include a separate risk factor in
regards to the company not being able to implement its entire
business plan if the maximum is not raised and the company does
not
generate revenues.
Use of Proceeds, page 7
11. With respect to our prior comment nine in our letter dated
August
11, 2005, we note the new disclosure on page 15 under the heading
"Principal Products and Services." Please expand the disclosure
to
clarify in more detail the reference to "in-home devices to keep
the
child safe."
12. Regarding the staff`s previous comment ten in the letter dated
August 11, 2005, please expand the disclosure to provide more
specific information as to how you plan to allocate the funds in
the
event you raise less than 10% of the total offering. You state
that
you will pay legal costs to comply with all filing requirements
and
that at the 10% level, you would "concentrate on internet sales of
our products," please state whether or not management plans to
contribute funds in the event you do not have sufficient funds to
pay
for the legal and website development costs under the "less than
10%"
scenario. If so, please state whether or not management has a
definitive plan for funding in this regard.
Dilution, page 10
13. Please compare the offering price per share to the price paid
by
officers, directors, promoters and affiliated persons. See Item
506(a) of Regulation S-B.
Item 8. Plan of Distribution, page 9
14. Please disclose when this offering will commence.
15. Please disclose more detail regarding the manner in which
these
securities will be offered. For instance, will the responsible
individuals solicit investors through direct mailings and/or
through
personal contact. Will you utilize sales material in promoting
the
sale of the shares pursuant to this prospectus? If so, we remind
you
of the Section 5 prohibition against utilizing a prospectus that
does
not meet the requirements of Section 10 of the Securities Act.
Supplementally, please confirm your understanding of this
requirement
and send us a copy of these materials for our review.
16. Please disclose whether you will register as broker-dealer or
issuer-dealer under the state laws of all states where you are
offering these units and such registration is required.
17. Please clarify what you will do with the offering proceeds
during
the offering period. We note that you will have immediate use of
the
funds; however, please disclose what you will do with portions of
the
proceeds not immediately used for corporate purposes. While we
note
that there will be no trust or escrow established, please disclose
whether funds will be placed in an interest bearing account? If
so,
disclose whether if you terminate the offering prior to its
closing,
funds will be returned to investors with interest. Please clarify
that interest will be retained by you as proceeds of the offering
if
the offering does proceed.
18. We reiterate our previous comment eleven in our letter dated
August 11, 2005. Please make the disclosure on the prospectus
cover
page consistent with that in this section. Paragraph two (2) of
this
section states "[w]e will keep the offering open until we sell all
of
the shares registered, or January 31, 2006, which ever occurs
first."
Please revise your cover page accordingly.
Item 15. Organization Within Last Five Years
19. Please describe in this section the development of the company
during the last three years. See Item 101(a) of Regulation S-B.
You
may want to combine this section with the "Business Development"
subsection.
Item 16. Description of Business, page 14
20. Please significantly revise the business section to include
the
company`s intended business in offering security products. For
example, please describe under the appropriate subheadings the
principal products and their markets, distribution methods of the
products, competitive business conditions and names of principal
suppliers. See Item 101(b) of Regulation S-B. It may be helpful
to
move similar disclosure in the narrative of the Plan of Operation
section to the appropriate subsections in the business section.
The Market, page 15
21. We note your disclosure that "[a]n example would be a person
training for a marathon, spending large blocks of time running."
Please explain if Mr. Hawking would be able to perform these
services
or include examples in which he and the company could provide such
services. Please describe the market in greater detail.
Competition and Competitive Strategy, page 15
22. Please describe the company`s competitive position in the
industry and methods of competition. See Item 101(b)(4) of
Regulation S-B.
23. We note the statement that "[i]t would appear that the niche
market targeted by Dynamic is presently under-serviced." Please
provide a reasonable basis for the statement or remove.
Distribution, page 15
24. We note the reference to placing advertisements in the local
yellow pages and listing with local businesses and travel
associations. Please include these expenses in the plan of
operation
section.
25. We note that among other things, the company plans to market
its
services by "affiliating with the music and entertainment
industry"
and "conducting security seminars." Please expand the disclosure
to
provide specifics as to how the company plans to do each.
Government Controls and Approvals, page 16
26. We do not understand the meaning of your third paragraph that
states "[d]uring the first year of operations, the officers and
directors are responsible for all company operations without
compensation. As a result Labor Standards and Occupational Health
and Safety will not affect the operations of Dynamic. After the
first year, we will reassess our requirements." Please disclose
the
basis for your belief that the company is not affected by these
government agencies. Please disclose whether the company would
need
any governmental approval for its security services or be affected
by
any governmental regulation.
Reports to Security Holders, page 16
27. Please update to provide the current address of the SEC which
is
: 100 F Street, N.E. Room 1580 Washington, DC 20549.
Employees, page 17
28. We note the statement, "[i]f the security for a special event
requires more personnel, we will subcontract the work to a
security
guard provider and Mr. Hawkings will act as the coordinator."
Please
discuss any entities or persons in which the company plans to
subcontract. Also, if applicable, please discuss these costs in
the
plan of operation section.
Item 17. Plan of Operations, page 18
29. We note the statement on page 18 that "Dynamic will help the
consumer develop a personal security plan." Please describe this
statement in more detail in the business section.
30. We note the table listing the company`s anticipated
milestones.
Please explain when the activities will occur. We note the
reference
to "Time frame after closing of offering." Please describe
whether
the company will begin some of the steps immediately upon
effectiveness of the registration and/or after some funds have
been
raised. We note that some of the milestones could be implemented
before any funds from the offering have been received. Please
revise
accordingly.
31. Please include in the table the implementation of the
company`s
plan to provide security services.
32. In the fifth-to-the-last paragraph of this section, you refer
to
"Dynamic Security Inc." Please identify this entity and its
relationship to Dynamic Alert Limited, or correct as appropriate.
33. We note the statement in the third-to-the-last paragraph that
"[w]e are confident we can meet our financial obligations and
pursue
our plan of operations if we can either raise additional funding
through this offering, or begin collecting sales revenues within
the
next six months of this prospectus becoming effective." Please
either substantiate the basis for this statement or delete it.
34. We note the statement "[d]uring the first year of operations,
we
will concentrate our efforts exclusively to the development of our
seminar..." Please revise this section to discuss whether the
company will concentrate on developing its business of providing
security services.
Expenditures, page 21
35. It appears that most of the information presented under this
subsection is duplicative to disclosure previously provided.
Please
omit such information and revise accordingly.
36. The information in the third table does not reconcile with
that
information provided on pages 10 and 13 under the "100% scenario."
37. We note that the ranking of categories in this table do not
agree
with those provided in the Use of Proceeds table. For example,
the
category "Training and Consulting" was given a higher priority in
the
Use of Proceeds table, but this table shows it to be fourth.
Please
revise as appropriate.
Item 19. Certain Relationships and Related Transactions, page 24
38. Please name the promoters. See Item 404(d) of Regulation S-B
and
Rule 405 of Regulation C of the Securities Act.
Financial Statements
General
39. The format presentation is difficult to read as line item
amounts
are not properly aligned. As a result, portions of certain (and
entire) amounts are not reflected on the statements of operations,
cash flows and stockholders` equity. Please revise.
Report of Independent Registered Public Accounting Firm
40. Since you are a development stage company under the guidance
of
SFAS 7, the periods covered by this report should include the
cumulative period from June 17, 2004 (date of incorporation) to
June
30, 2005 for the statements of operations, cash flows and
stockholders` deficiency. Please advise your auditor to revise
the
first and third paragraphs of their report accordingly.
Notes to Financial Statements
Note 3. Basis of Presentation - Going Concern
41. Prior to the last sentence of this note, the following
statement
that was previously disclosed should be reinstated: "These facts
raise substantial doubt about the Company`s ability to continue as
a
going concern."
* * * * *
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 provide 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 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.
You may contact David Burton at (202) 551-3626 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Janice McGuirk at (202) 551-3395 or
Thomas
Kluck, who supervised the review of your filing, at (202) 551-3233
with any other questions.
Sincerely,
John Reynolds
Assistant Director
cc: W. Scott Lawler, Esq.
Fax: (403) 272-3620
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Audrey Reich
Dynamic Alert Limited
November 21, 2005
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