Mail Stop 3561
December 13, 2005
Isaac Applbaum, Chairman
Vector Intersect Security Acquisition Corp.
One Embarcadero Center
San Francisco, California 94111
Re: Vector Intersect Security Acquisition Corp.
Registration Statement on Form S-1
Amendment No. 1 filed November 7, 2005
File No. 333-127644
Dear Mr. Applbaum:
We have reviewed your 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. Please tell us the factors you considered in determining to
value
this offering at $150,000,000. What factors did you consider when
determining that you might need $141,000,000 in the trust fund to
effect the business combination contemplated by the registration
statement? It does not appear to the staff as though the
determination to value the offering at this amount is an arbitrary
decision and we would like to know the specific factors and
motivations behind the valuation. This includes the time period
before the company`s corporate existence was established in July
of
2005 and encompasses any and all evaluations and/or discussions
that
may have taken place prior to the involvement of the principals
with
the formal entity of Vector Intersect Security Acquisition. Given
management`s extensive and high-level experience effecting
acquisitions, the precise nature of their knowledge about their
ability to effect a combination with a company whose fair market
value is equal to at least 80% of the company`s net assets may be
material information for which appropriate disclosure is required.
We may have further comment.
2. We note your response to our prior comment 2. We note that the
disclosure on page 6 indicates that "all of our existing
stockholders, including all of our officers and directors, have
agreed to vote the shares of common stock then owned by them in
accordance with the majority of the shares of common stock voted
by
the public stockholders." (emphasis added) We also note your
disclosure on page 13 that "any shares of common stock acquired by
existing stockholders in the aftermarket will be considered as
part
of the holding of the public stockholders and will have the same
rights as other public stockholders, including voting and
redemption
rights." Finally, we note your disclosure on page 49 that "any
securities acquired by existing stockholders in the aftermarket
will
be considered to be part of the holding of public stockholders and
will have the same rights as other public stockholders, including
voting and redemption rights with respect to a potential business
combination. Accordingly, they may vote on a proposed business
combination with respect to shares acquired in the aftermarket any
way they so choose." Revise to provide the disclosure in your
response that the existing stockholders waive their right to
exercise
redemption rights to any shares of common stock owned, directly or
indirectly, on the date of the prospectus or acquired in the
offering
or in the open market or otherwise.
3. We note the contingent nature of part of the underwriters`
compensation. In light of Regulation M, please include disclosure
in
the registration statement regarding when the distribution ends.
This disclosure may relate to when all of the shares have been
sold,
there are no more selling efforts, there is no more stabilization
or
the overallotment has been exercised. Note that disclosure merely
stating that the distribution ends at the closing of the IPO is
insufficient.
4. We note that the form of warrant purchase agreement among Issac
Applebaum, Marc Abramowitz and the representative which indicates
that Messrs Applebaum and Abramowitz will enter into an agreement
or
plan with Rodman or, with Rodman`s consent, an independent broker-
dealer. If the parties enter into a plan in which Rodman
administers
the plan and is also acting as finder for the company where Rodman
could receive material nonpublic information, please explain how
this
plan would comply with Rule 10b5-1.
5. We note your disclosure that the components of your units will
begin trading separately on the 20th trading day following the
earlier to occur of the expiration of the underwriters` over-
allotment or its exercise in full "unless Rodman & Renshaw, LLC
determines that an earlier date is acceptable." Please revise to
discuss the factors that the underwriter will consider in making
the
determination to allow earlier separate trading. If the
underwriter
decides to allow separate trading before the end of 20th trading
day,
discuss how investors will become aware of the acceleration.
6. We note your response to comment 13 that the company`s CEO
received unsolicited communications by a person representing a
potential business acquisition candidate wishing to discuss a
business acquisition transaction. Revise your prospectus to
address
the receipt of the unsolicited communication and the company`s
response to that solicitation. We may have further comment.
Risk Factors, page 10
Risks Related to Our Targeted Industries, page 21
7. You should present as risk factors only those factors that
represent a material risk to investors in this offering. Do not
include risk factors that could apply to any issuer or to any
other
offering. Some of your risk factors fit into this category and
you
should revise to explain how each risk factor applies to your
company
or your offering or you should delete them. For example, see risk
factors eight and nine.
Use of Proceeds, page 26
8. We note the statement on page 27 that "[t]here is no limit on
the
amount of accountable out-of-pocket expenses reimbursable by us."
Please clearly indicate whether these out-of-pocket expenses could
be
reimbursed from the proceeds held in trust upon the consummation
of a
business combination.
9. Please clarify, in footnote 1, the amount of offering expenses
already paid from the $175,000 received from your existing
shareholders.
Proposed Business, page 33
We have not identified a target business, page 34
10. We note your statement that "none of our officers, directors,
promoters or other affiliates is currently engaged in substantive
discussions on our behalf ... regarding the possibility of a
potential merger, capital stock exchange, asset acquisition or
other
similar business combination ... we note that there has been no
diligence, substantive discussions, negotiations and /or other
similar activities undertaken ... with respect to a business
combination transaction with us." (emphasis added) Address all
of
the discussions by the company with representatives of other
companies regarding a business combination transaction. We may
have
further comment.
Facilities, page 40
11. Please include the disclosure required by Item 102 of
Regulation
S-K. Please describe any leasing arrangements, including costs.
Certain Transactions, page 53
12. If applicable, please describe in more detail the
reimbursement
for the office space as required by Item 404 of Regulation S-K.
Underwriting, page 58
Financial Advisory Agreement, page 60
13. Please file the financial advisory agreement as an exhibit.
* * * * *
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 direct your attention to Rules 460 and 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 Blaise Rhodes at (202) 551-3774 or Hugh West
at
(202) 551-3872 if you have questions regarding comments on the
financial statements and related matters. Please contact Thomas
Kluck at (202) 551-3233 or David Link, who supervised the review
of
your filing, at (202) 551-3356 with any other questions.
Sincerely,
John Reynolds
Assistant Director
cc: Robert L. Grossman, Esq.
Fax: (305) 579-0717
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Isaac Applbaum
Vector Intersect Security Acquisition Corp.
December 13, 2005
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