October 21, 2005
Zip+4 Code: 20549-3561
Via Fax & U.S. Mail
Mr. Benedict Van
Chief Executive Officer
PeopleNet International Corporation
5201 Great America Parkway, Suite 239
Santa Clara, California 95054
RE: PeopleNet International Corporation (the "Company")
Form 10-KSB for the Fiscal Year Ended December 31, 2004
Form 10-QSB for the Quarter Ended March 31, 2005
Form 10-QSB for the Quarter Ended June 30, 2005
File No. 000-33033
Dear Mr. Van:
We have reviewed your response letter dated September 30,
2005
and have the following comments. 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 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
filings.
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.
Form 10-KSB for the Fiscal Year Ended December 31, 2004
Financial Statements
Notes to Financial Statements
Note 10 - Commitments and Contingencies
1. We have reviewed your response to our prior comment number 1
but
are unclear as to why the Company did not believe it was necessary
to
recognize an accrual for the settlement arrangement with a former
employee of PSCT prior to the third quarter of 2005. If PSCT
became
unable to fulfill its obligations under this settlement
arrangement
prior to 2005, then the Company should have recognized an accrual
for
its obligations at that time. Please advise us of when PSCT
became
unable to satisfy its obligations under the settlement
arrangement.
If this occurred prior to the third quarter of 2005, please revise
the
Company`s financial statements for the period in which this
occurred
to recognize an accrual for this obligation. If you do not
believe
this is required, please explain in detail your basis for your
conclusion.
Note 12 - Common Stock / Options
2. We have reviewed your response to our prior comment number 6,
but
we do not concur with your accounting treatment. As your company
had
received the $152,000 prior to December 31, 2004, but did not
issue
shares of the company`s common stock prior to the balance sheet
date,
we believe that the cash received for shares which had not been
issued
represents an unfulfilled obligation or liability. Please revise
your
financial statements to reflect the $152,000 of cash received as a
liability for un-issued shares at December 31, 2004.
3. In addition, we note that your company also reported un-issued
shares in the stockholder`s equity section of your balance sheet
for
the quarterly period ended June 30, 2005. Please revise the
financial
statements in your Form 10-QSB for the period ended June 30, 2005
to
reflect the amount received for the un-issued shares as a
liability in
the balance sheet.
Form 10-QSB for the Quarterly Period Ended March 31, 2005
General
4. In addition, we note per your response to our prior comment
number
5 that the 350,000 options granted to Mr. James Cargo, which were
previously included in your 2004 compensation table, were actually
granted in February 2005. Please ensure that the notes to your
financial statements in your Form 10-QSB for the period ended
September 30, 2005 include the disclosures required by SFAS No.
123
and SFAS No. 148, with respect to the options granted to Mr.
Cargo.
Form 10-QSB for the Quarterly Period Ended June 30, 2005
Item 1. Financial Information - (unaudited)
Notes to Unaudited Financial Statements
Note 8 - Advances to (from) Related Parties
5. We note that during the three month period ended June 30, 2005,
your company advanced $148,000 to HereUAre for a future
acquisition.
Please tell us and expand your disclosures in the MD&A section of
your
document to discuss the details of this acquisition. In your
response
please provide information including, but not limited to:
* The expected timing for the completion of your company`s
acquisition.
* The amounts of any further commitments of capital (cash or
stock)
for the acquisition.
* The primary reasons for the acquisition, including a description
of
any factors that contributed to a purchase price which will result
in
recognition of goodwill, if any is expected to be recognized.
* To the extent known, the total cost of the acquired entity,
including: (1) cash to be provided in conjunction with the
acquisition, (2) the number of common shares to be issued in
conjunction with the acquisition, if any (3) the value assigned to
the
common shares, if any are to be issued as a part of the
acquisition
(4) your basis for determining the value assigned to the common
shares
to be issued, if any are to be issued.
6. In addition, to the extent that you have entered into a formal
agreement for an acquisition, please file a Form 8-K under the
requirements of Item 1.01 of the Form 8-K.
Item 2. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations
Results of Operation
7. We note that you have only provided a discussion of your
results of
operations for the three-month period ended June 30, 2005.
Paragraph
(b)(2) of Rule 303 of Regulation S-B requires a small business
issuer
to provide a discussion that will enable a reader to assess
material
changes in financial condition and results of operations since the
end
of the last fiscal year and for the comparable interim period in
the
preceding year. As such, please expand your disclosures in the
"Results of Operations" section of your MD&A in your upcoming
quarterly report on Form 10-Q to discuss both the quarterly and
the
year-to-date periods ended September 30, 2004 and September 30,
2005.
As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the
amendments to expedite our review. Please furnish a cover letter
with
your amendments that keys your responses to our comments and
provides
any requested information. Detailed cover letters greatly
facilitate
our review. Please understand that we may have additional
comments
after reviewing your amendments and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filings include all information required under the Securities
Exchange
Act of 1934 and that they have provided all information investors
require for an informed investment 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 connection with responding to our comments, please
provide, in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments 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 our review of your filings or in
response to
our comments on your filings.
You may contact Jeffrey Sears at (202) 551-3302 or the
undersigned at (202) 551-3813 if you have questions regarding our
comments on the financial statements and related matters.
Sincerely,
Linda Cvrkel
Branch Chief
Via facsimile: Benedict Van
(408) 988-1788
Mr. Benedict Van
PeopleNet International Corporation
October 20, 2005
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