Mail Stop 3561
December 14, 2005
Donald C. Harms, Esq.
McKenzie Bay International, Ltd.
37899 Twelve Mile Road
Suite 300
Farmington Hills, MI 48331
Re: McKenzie Bay International, Ltd.
Registration Statement on Form SB-2
Filed November 14, 2005
File No. 333-129673
Post-Effective Amendment No. 4 to Form SB-2
Filed November 8, 2005
File No. 333-119493
Dear Mr. Harms:
We have limited our review of your filing to the issues
addressed in our 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.
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. We note by means of the registration statement filed November
14,
2005 that you are seeking to register for resale common shares
underlying convertible debentures that you sold to Cornell Capital
Partners in unregistered transactions in October and November
2005.
Please provide us with your analysis as to whether that offering
should be integrated with the prior private placement and public
resale offering of common shares reflected in the post-effective
amendment covering the standby equity distribution agreement with
Cornell Capital.
2. We note your response to comments 4 and 5 in our letter dated
September 22, 2005 and reissue the comments as they apply to David
Gonzalez`s role as an escrow agent in connection with the common
shares pledged to secure payment of the convertible debentures.
In
view of the apparent affiliate relationship between Cornell
Capital
as investor and Mr. Gonzalez as escrow agent, it appears that
Cornell
Capital may be exercising actual or potential discretion as to
whether it will perform its obligation under the terms of the
convertible debentures. Please provide us with your analysis as
to
whether this affiliate relationship is inconsistent with our
position
regarding privately placed convertible securities as set forth in
Interpretation No. 3S in the March 1999 Supplement to the Division
of
Corporation Finance Manual of Publicly Available Telephone
Interpretations.
3. We note that you are registering common shares underlying
securities with market-conversion features. Specifically, we note
that the number of common shares issuable upon conversion of the
convertible debentures may be determined, in part, by using 80
percent of the lowest closing bid price of your shares for the
five
trading days immediately preceding the conversion. As a result,
the
number of common shares to be issued on conversion may depend on
the
price of the common stock at the time of conversion. Accordingly,
please confirm to us as follows:
* the shares of common stock you have registered is a good faith
estimate of the maximum number of shares you may issue upon
conversion;
* you will not rely on Rule 416 if the conversion price results in
your having insufficient shares; and
* you will file a new registration statement to cover the resale
of
any additional shares in the event that the number of shares
actually
issued exceeds the number of shares that you have included in the
registration fee table.
4. We note you are registering 1,987,967 shares of common stock
underlying warrants that you have issued to various selling
stockholders. In the appropriate sections of the registration
statement, please describe the transactions in which these
warrants
were issued and specify the material terms of the warrants.
Identify
whether these warrants have fixed exercise prices. Also, describe
the material terms of the convertible promissory note that is
convertible into the 80,200 common shares. Specify whether the
promissory note has a fixed conversion price.
Use of Proceeds, page 19
5. Please specify the amount of proceeds you will receive from the
exercise of warrants.
Selling Stockholders, page 71
6. Please include column headings to your selling stockholder
table.
* * * * *
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
letter with your amendment that keys your responses to our
comments
and provides any requested information. Detailed 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 filing to be certain that the
filing includes all information required under the Securities Act
of
1933 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness 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 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 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 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.
Please contact Howard Baik, Attorney-Advisor, at (202) 551-
3317, David Mittelman, Legal Branch Chief, at (202) 551-3214, or
me
at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Jonathan B. Reisman, Esq.
Reisman & Associates, P.A.
Fax: (928) 569-8195
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Donald C. Harms, Esq.
McKenzie Bay International, Ltd.
December 14, 2005
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