Mail Stop 0305
January 14, 2005
Puneet Sharan
President and Chief Executive Officer
Boulder Creek Explorations, Inc.
1450 Sasamat Street
Vancouver, BC Canada V6R4G4
Re: Boulder Creek Explorations, Inc.
Form SB-2 filed December 17, 2004
File No. 333-121360
Dear Mr. Sharan:
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.
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 and 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. The financial statements should be updated, as necessary, to
comply with Rule 3-10 (g) of Regulation S-B at the effective date
of
the registration statement.
2. Provide a currently dated consent from the independent public
accountant in the amendment.
3. Supplementally please provide us with a detailed description of
the events leading up to the disciplinary action by the Vancouver
Stock Exchange against Mr. Sharan. Please include a detailed
discussion of the incident(s) that led to the disciplinary action
and
the terms of the resulting settlement. In this regard, please
provide us with your analysis of why Mr. Sharan would not be
subject
to a Section 3(a)(39) statutory disqualification.
4. Please also supplementally tell us whether Mr. Sharan was
involved
in the September 23, 2004 and October 15, 2004 Regulation S
offerings
and if so, provide us with your analysis of why you believe Rule
3a4-
1 is available to him since he would have participated in selling
and
offering securities more than once in a twelve months period.
Registration Statement Cover Page
5. Please revise the registration statement cover page to include
the
following statement. "If any of the securities being registered
on
this Form are to be offered on a delayed or continuous basis
pursuant
to Rule 415 under the Securities Act of 1933, other than
securities
offered only in connection with dividend or interest reinvestment
plans, check the following box [X]."
6. Please remove the reference to the risk factors from the
registration statement cover page.
Prospectus Cover Page
7. We note that you have included two separate prospectus cover
pages
for the sale of the common stock by the company and the selling
shareholders. Please consolidate the necessary information on one
page and delete the other.
8. Please make sure that the reference to the risk factor section
appears on the prospectus cover page in bold. Also, please
correct
the page reference to the risk factor section.
9. Please include the information required by Item 501(a)(10) of
Regulation S-B.
Dealer Prospectus Delivery, page 5
10. Please delete the last sentence in this paragraph.
11. Also move the prospectus delivery legend to the back cover.
Summary of Our Offering, page 6
12. Please delete the reference to information that is
incorporated
by reference.
13. Please disclose the intended use of proceeds by the company
under
"Summary Information about the Offering" on page 7.
Risk Factors, page 8
14. Please add a risk about the potential conflict of interest
with
Mr. Sharan in the event minerals are found on his property.
3. Because We Lack an Operating History, We Face , page 9
15. Within your risks disclosure, you state that your company must
pay annual license fees on claims. Please clarify whether these
payments are the obligation of the company or your president, who
legally holds the mining claims to the land. Please describe any
agreements your company has with the president to reimburse or pay
such fees on his behalf. Also, please tell us whether the annual
license fees discussed here are the same annual fees referenced in
Note 3 to your financial statements.
4. If We Do Not Conduct Mineral Exploration, page 9
16. You state that the expiration date for both of your mineral
claims is April 8, 2005, and that you hold the right to extend
each
claim for two years. We also note that you have entered into an
option to acquire the rights to these mineral claims. Upon
exercise, this option requires your company to perform a certain
level of exploration activity prior to September 2005 and
September
2006, and it requires future annual payments to the company`s
president of $25,000, which would begin on January 1, 2008.
Please
tell us and disclose whether the rights to the mineral claims have
actually been renewed beyond the date provided, or reconcile for
us,
the time lapse between expiration of your mineral claims and the
details of your option contract.
19. Because our Mining Operations are in a Foreign Country, page
13
17. Please describe the types of joint venture agreements you plan
to
undertake and reconcile the disclosure with your statement on page
23, that you have no plans to try to interest other companies in
the
property.
Use of Proceeds, page 15
18. We note that your table, which presents the intended use of
the
proceeds from the sale of securities, allocates a portion of the
proceeds to "Staking of Claims" costs under each assumption,
except
the assumed sale of 25% of the offered shares. We also note that
you
state in the background information, included in your business
section, that claims were staked prior to the purchase of the land
by
your company`s president. Please explain why you have attributed
proceeds to the "staking of claims" when assuming the sale of 50%
or
more of your offered securities; or explain why there would be no
costs associated with the staking of claims if only 25% of the
offered shares were sold. Please correct any error which may
reside
within the table.
19. Revise the first table so that it does not show more "uses"
than
the amount of proceeds.
20. Since it appears that you will not have any revenues for the
next
12 months, you should include the amount you estimate you will
expend
on `34 Act reports during that time as one of the expenses to be
paid
from this offering.
21. In the next amendment please include information about the
repayment of a loan to the officer, including interest rate and
term
in the Certain Transactions section.
Dilution of the Price you Pay for your Shares, page 16
22. Please revise your dilution disclosure so that all amounts are
presented in cents. Also, it appears that various amounts
presented
in your dilution disclosure on pages 16 and 17 are incorrect due
to
computational errors. Please revise to correct these errors.
Existing Stockholder if all of the Shares are sold, page 17
23. We note that you have disclosed "Net tangible book value per
share before offering" as a negative value; although, the "net
tangible book value" is not a deficit. Please revise your table
to
eliminate the brackets around this amount.
Selling Security Holders, page 18
24. Please include a discussion of how the shares were acquired by
selling shareholders in this section.
25. The selling shareholders table should reflect the number and
percentage of shares currently owned by each selling shareholder,
the
number of shares to be offered and the number and percentage of
shares that will be owned after the offering assuming all the
shares
are sold. Your table does not seem to reflect the number and
percentage of shares that will be owned by the selling
shareholders
after the offering. Please revise.
26. Please delete the "Average Price per Share" column or tell us
why
you have included it in the table.
27. Please identify the natural person or persons that have voting
or
investment power over LeMaire Family Trust.
Business, page 21
28. We refer to your statement that the company`s claims consist
of
18 units. Please disclose the meaning or significance of "units."
29. Please revise to disclose what minerals are anticipated in the
properties, the basis for such anticipation and the amount
necessary
to start mining operations.
Background, page 21
30. Revise the carryover paragraph at the top of page 22 to
disclose
the amount of the additional fee Mr. Sharan avoided by keeping the
claims in his name rather than in the name of a subsidiary of the
registrant.
31. If you are aware of any other registration statements where
the
claims were owned by control persons and money was raised for
mineral
exploration on those claims through the sale of public securities,
please advise us supplementally.
32. We note the disclosure in the second full paragraph on page 22
that Mr. Sharan could dispose of the property to third parties and
that you would only have the ability to sue for breach of
fiduciary
duties. Please add a risk factor about this risk, which would
disclose the amount you estimate such a law suit might cost.
Proposed Exploration Program, page 24
33. State the time table for developing the different phases of
your
exploration program.
Competitive Factors, page 24
34. Please revise the last sentence in this paragraph to state
that
it is your belief.
Management`s Discussion and Analysis, page 25
35. Small business issuers that have not had revenues from
operations
in each of the last two years should comply with the MD&A
requirements of paragraphs (a) and (c) of Regulations S-B, Item
303.
Paragraph (c) of Item 303 requires that off-balance sheet
arrangements that are reasonably likely to have a future effect on
the small business issuer`s financial condition, revenues or
expenses, results of operations, etc. be disclosed in a
separately-
captioned section of MD&A. In this regard, please discuss the
terms
of your option to purchase interests in the Pun and Tim mineral
claims in MD&A.
36. Describe your plan of operation for the next twelve months.
Specifically address how long you can satisfy your cash
requirements
and indicate whether you will have to raise additional funds in
the
next twelve months.
Principal Stockholders, page 29
37. Please delete the last sentence of the first paragraph as it
is a
duplicate of the one preceding it.
Description of Securities, page 30
Non-cumulative Voting, page 31
38. The statement indicating that "after the offering is
completed,
present stockholder`s will own approximate 10% of our outstanding
shares" appears to be in error since only 2,000,000 of the
Company`s
9,040,000 currently outstanding shares are being offered by
selling
shareholders in the offering. Please revise to correct this error.
Certain Related Transactions, page 32
39. Please provide the information required by Item 404(d)(2) of
Regulation S-B.
Financial Statements
Note 2. Significant Accounting Policies, page F8
40. We note that when discussing your accounting policies relating
to
foreign currency translation, you state that other assets and
liabilities have been translated at the rates prevailing at the
date
of transaction. As paragraph 12 of SFAS 52 states that the
exchange
rate at the balance sheet date shall be used for the translation
of
assets and liabilities, please revise your disclosure. Also,
revise
your financial statements to reflect balances translated at the
appropriate exchange rate.
41. You also state that "gains and losses from currency
translation
are included in the statement of operations." Please clarify
whether
you are referring to actual transaction gains and losses, which
result from a change in the expected functional currency cash
flow,
due to the settlement of a transaction for a fixed foreign
currency
amount; or whether you are referring to translation adjustments.
Per
the guidelines of paragraph 13 of SFAS 52, translation adjustments
are reported in the equity section of the balance sheet, within
other
comprehensive income. We may have further comments, depending
upon
your response.
42. As your company is incorporated in the United States of
America,
but operations are primarily conducted in Canada, please consider
disclosing your functional currency.
Note 3. Natural Resource Properties and Related Exploration and
Development Expenses, page F10
43. Please tell us and clarify in Note 3 whether the amounts
payable
under the "claim agreement" described in Note 3 are payable to the
Company`s president or to some other party.
Note 5. Related Party Transactions, page F-10
44. Since it appears that the Company`s president will own a
majority
of the Company`s outstanding common shares both before and after
the
planned offering, please disclose the existence of this control
relationship in the notes to the Company`s financial statements.
Refer to the requirements of paragraph 2 of SFAS No.57.
Updated Financial Statements
45. The financial statements should be updated, as necessary, to
comply with Rule 3-10 (g) of Regulation S-B at the effective date
of
the registration statement.
46. Provide a currently dated consent from the independent public
accountant in the amendment.
Signatures
47. The registration statement must be signed by the controller or
principal accounting officer as well as the principal executive
officer, the principal financial officer, and by at least a
majority
of the board of directors of the registrant. If Mr. Sharan, who
has
already signed the registration statement acts in that capacity,
please indicate each capacity in which he signs the registration
statement.
Exhibits
Exhibit 5.1
48. Please revise the opinion to state that the shares are duly
authorized.
Exhibit 23.1 Consent of Independent Auditor
49. Please obtain a consent for the inclusion of the independent
auditors report in your registration statement on Form SB-2. The
reference to "the incorporation by reference" should be eliminated
from the consent since the report has been included in your
registration statement not incorporated by reference.
50. Please obtain a consent of the independent auditor which
indicates the city and state where issued.
ENGINERING COMMENTS
Risk Factors, page 8
51. Add a risk factor that addresses the fact that your property
has
not be examined in the field by a professional geologist or mining
engineer, and no geologic report has been written on your
property.
Detail the risks to investors.
11. Because the Sole Executive Officer Does Not Have Technical,
page
11
52. You disclose that you will be required to hire qualified
personnel. Please remove this statement and any other statements
in
your risk factor section that attempt to mitigate the risk.
Business, page 21
53. We note that Mr. Sharan acquired the two mineral claims in
British Columbia for one Canadian dollar. Supplementally discuss
why
the price was so low and what factors contributed to the price
paid.
54. For your mineral properties, provide the disclosures required
by
Industry Guide 7 (b). In particular, provide:
* Any conditions that you must meet in order to retain title to
the
property.
* A brief description of the rock formation and mineralization of
existing or potential economic significance on the property.
* A description of the present condition of the property.
* A description of any work completed on the property.
* A description of equipment and other infrastructure facilities.
* The current state of exploration of the property.
* The total cost of your property incurred to date and planned
future
costs.
* The source of power that can be utilized at the property.
* If applicable, provide a clear statement that the property is
without known reserves and the proposed program is exploratory in
nature.
Refer to Industry Guide 7 (b)(1)-(5) for specific guidance.
Industry
Guide 7 can be reviewed on the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7.
Other
55. 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.
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 this action 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 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.
*****
Closing
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 Rule 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 Jeffrey Sears at (202) 824-5646 or Linda
Cvrkel, Branch Chief, at (202) 942-1936, if you have questions
regarding comments on the financial statements and related
matters.
If you have questions regarding the engineering comments, please
contact R. L. Baer, Mining Engineer at (202) 942-2965. Please
contact Messeret Nega at (202) 942-1891 or me at (202) 942-1850
with
any other questions.
Sincerely,
Max A. Webb
Assistant Director
cc: Via Facsimile (801)364-6500
James N. Barber, Esq.
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Boulder Creek Explorations, Inc.
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