Mail Stop 3561
January 27, 2006
Mr. Joseph A. Merkel, President
American Antiquities, Inc.
2531 Jackson Road, Suite 177
Ann Arbor, MI 48103
Re: American Antiquities, Inc.
Registration Statement on Form SB-2
Filed December 19, 2005
File No. 333-130446
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 provide the Securities and Exchange Commission`s new
address as appropriate throughout the document: 100 F Street, NE,
Washington, DC 20549.
2. On the prospectus cover page, you state "[t]here is no minimum
amount of common shares we must sell so no money raised from the
sale
of such common shares will go into escrow, trust or another
similar
arrangement." However, earlier on the cover page and elsewhere in
the document, you state that there is a minimum of 200,000 shares.
Please clarify. If there is a minimum, please clarify whether
funds
will be refunded to investors if the minimum is not attained and
describe the escrow arrangement or similar arrangement. See also
page 26, where a minimum is indicated.
Front of Registration Statement
3. Please provide the exact name of the registrant that appears to
be
American Antiquities, Inc.
Table of Contents and Outside Back Cover Pages of Prospectus
4. In light of the Rule 415 undertakings in Part II of the
registration statement, please revise or remove the statement on
the
outside back cover page of the prospectus that "[t]he information
contained in this prospectus is accurate only as of the date of
this
prospectus, regardless of the time of delivery of this prospectus
or
of any sale of common stock."
Prospectus Cover Page
5. Please identify the persons selling the securities, such as
officers or directors, and describe the underwriting arrangements
as
required by Item 501(a)(9)(i)-(iv) of Regulation S-B.
Prospectus Summary, page 5
6. We note that the company refers to the risk factors beginning
on
page 7. However, the risk factors do not appear to begin on page
7.
Please revise the page numbers throughout the prospectus.
7. Under "Operations," please describe whether American
Antiquities
is a development stage company and whether it has any current
operations. Also indicate that the company has no revenues to
date
as reflected in the company`s financial statements.
8. Please clarify whether the company will be selling its items
through the company`s website or other companies` websites.
9. Please provide a summary financial information table.
Risk Factors, page 6
10. In the first paragraph, please revise your disclosure to
clarify
that you discuss all material risks in this section.
11. Please reconcile the risks described in the subheadings of
risk
factors 4, 5, 11 and 13 with the risks discussed in the
narratives.
12. 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. Several of your risk factors seem to fit into this
category and you should revise to cite a particular risk, or
remove
them. For example, see risk factors six and nine. Also each
factor
must also explain how it applies to your company or your offering.
13. Please add a risk factor that discusses the risk to the
company`s
plan of operation if the company fails to raise the minimum or
maximum amount of proceeds.
14. If there is no minimum for the offering, please add a risk
factor
that describes the risk of the funds not being held in escrow or
other similar arrangement.
15. In risk factors 5 and 13, it appears that several risk factors
are discussed under one subheading. For example, the risk that
the
company may not develop relationships with key antiques and
collectibles vendors is different than the risk that vendors will
continue to manufacture desirable or popular collectibles
merchandise
or product lines. Also the risk that management is involved in
other
matters and will only devote a portion of their time to the
company
is different than the risk of management having limited
experience.
Please separate each risk factor and revise accordingly.
Risk Factors Relating to this Offering, page 10
16. In the narrative of risk factor seven, please correct the
reference to the Securities and Exchange Commission.
Business, page 12
General, page 12
17. Please discuss the company`s operations to date. See Item
101(a)
of Regulation S-B.
18. Please discuss the company`s use of two offices. Also
disclose
the principal terms of the lease agreements and file any
agreements
as an exhibit.
Operations, page 12
19. On page 13, you state "[w]e do not plan to have any physical
retail stores but may use them for placement of various purchases
and
consignments." Please clarify whether you are referring to stores
owned or operated by you or others.
20. Please explain the statement "[a]lthough our management team
has
extensive experience in holding estate sales and auctions, we will
not begin operating until this offering is cleared and effective."
21. Please discuss whether the company will purchase items from,
or
sell items to, officers or companies in which the officers are
affiliated.
22. We note the reference to your customer mailing list. Please
clarify whether this is an existing mailing list or one that you
intend to produce after the business is operational.
23. Please define the terms TIAS and NAA Live that appear on page
13.
24. Please describe whether the company will have its own website
to
conducts auctions.
Revenues, page 13
25. Please describe how the company will determine the percentage
it
receives from any consignment sales. If determinable, please
include
the range of the percentage that the company could receive.
Marketing Strategy, page 13
Sales Strategy, page 13
26. Please further explain what "customary auction consignment
fees"
are. Clarify that the 8% to 25% fees are what you plan to charge.
Please also describe what "all other normal marketing charges"
are.
Internet, page 14
27. Please describe the costs if the company only resells items.
28. Please clarify and explain the statement "[b]ased on current
technological trends, we may seek to try additional internet based
marketing, not currently known to the market."
Competition, page 15
29. In the second paragraph, there appear to be some statements
missing. For example, see the first sentence. Please revise.
Employees, page 15
30. We note that there are "oral employment agreements with [your]
officers [that will] commence after successful completion of this
offering." Please clarify what is meant by "successful."
Other
31. Please describe the distribution of the products. See Item
101(b)(2) of Regulation S-B.
32. Please describe how the company will compete. See Item
101(b)(4)
of Regulation S-B.
33. Please disclose the names of current or expected principal
suppliers. See Item 101(b)(5) of Regulation S-B.
34. Please disclose whether the company is or will be dependent on
a
few major customers. See Item 101(b)(6) of Regulation S-B.
35. Please disclose any patents, trademarks or licenses. See Item
101(b)(7) of Regulation S-B.
36. Please discuss the need for any governmental approval of
principal products or services and the effect of governmental
regulation. Please include a discussion of whether the company
needs
a license to conduct auctions. See Item 101(b)(8) and (9) of
Regulation S-B.
Use of Proceeds, page 16
37. We note the statement that "[a]ny proceeds received from the
sale
of our common shares will be deposited directly into the operating
account ... to fund our operations." Please reconcile this
statement
with the disclosure that the company will have a minimum.
38. We note that the company has allocated a substantial amount of
the proceeds towards "Working Capital." Please describe the
specific
use of the proceeds. See Item 504 of Regulation S-B.
39. Please include a footnote that describes the offering
expenses.
In addition, please reconcile the amount of the offering expenses
in
this section with the amount described in Part II, Item 25.
Dilution, pages 16
40. 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.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 18
Trends and Uncertainties, page 18
41. You state that you "are pursuing financing for [your]
operations
and seeking additional investments and [you] will need a minimum
of
$50,000 over the next twelve months to commence and continue
operations." Please further describe the type of financing you
are
pursuing.
42. Please describe what will happen to you if you fail to raise
at
least $50,000. Will the company be able to continue with its
business plan? Please explain.
Results of Operations, page 19
43. We note the statement "[i]n addition, American Antiquities has
no
significant assets or revenue generating operations." It appears
that the company has generated no revenues. Please revise.
44. We note that the company states that "[i]f the offering is not
successful, we will have to seek alternative funding through
additional advances ..." Please disclose the persons from whom
the
company would seek advances. Please describe any agreements.
45. You state that "[n]o specific terms of possible equity or debt
financing have been determined or pursued." As noted above,
however,
you state on page 19 that you are pursuing financing and seeking
additional investments. Please clarify.
46. Please revise the first sentence on page 20 to disclose
whether
management will pursue the following milestones.
47. Please reconcile the milestones with the use of proceeds. For
example, the $10,000 for the marketing costs of the database does
not
appear in the use of proceeds. Also note the statement that
"[a]dditional funds raised beyond the minimum proceeds will be for
the acquisition of selected inventory."
48. Please explain whether the company will be able to proceed
with
its plan of operation if it does not have funding to create the
database.
49. Please describe the company`s plan of operations for the next
twelve months as required by Item 303(a) of Regulation S-B.
Provide
details of your specific plan of operations, including detailed
milestones, the anticipated time frame for beginning and
completing
each milestone, the estimated expenses associated with each
milestone
and the expected sources of such funding. Please explain how the
company intends to meet each of the milestones if it cannot
receive
funding. See Item 303(a)(1) of Regulation S-B.
50. Please clarify whether the database of collectors, dealers and
museums is the same as the mailing list identified on page 12.
The
company may need to revise the related parts of the business
section
accordingly.
Business Experience of Officers and Directors, page 22
51. Please clearly state whether each officer is currently
employed
with other companies and, if yes, please state whether the person
is
full-time or part-time with such company. If an officer is not
working full-time for you, please provide the amount of time that
officer will spend per week working for you.
52. Please disclose whether any of the officers or directors have
involvement or duties with other companies which will present any
conflicts of interest with his position or duties with you. The
company should also add a risk factor to the risk factors section
addressing the conflicts of interest.
53. Under the description of the business experience for Joseph
Merkel, please define the term "head grader."
Security Ownership of Certain Beneficial Owners and Management,
page
23
54. We note the entry on page 24 that Joseph Merkel owns 2.5
million
shares and the reference on page 25 that you sold Merkel`s Auction
Specialists, Inc. 2.5 million shares. Please clarify whether
Merkel`s shares are owned individually or through the corporation.
Please clarify the relationship between Merkel`s Auction
Specialists,
Inc. and Merkel`s Auctioneers and Appraisers. See also Item 26-
Recent Sales of Unregistered Securities.
55. Please describe whether Messrs. Merkel and Quinlan are
promoters
as required by Item 404(d) of Regulation S-B.
Certain Relationships and Related Transaction, page 24
56. Please describe in the use of proceeds section whether the
company will use any of the proceeds to pay officers for the
amounts
owed to them as described in this section.
Shares Eligible for Future Sale, page 25
57. Please indicate the amount of common stock that could be sold
pursuant to Rule 144 under the Securities Act as required by Item
201(a)(2)(ii) of Regulation S-B.
Plan of Distribution, page 26
58. Please outline briefly the plan of distribution by including
how
the company will solicit the securities. Also include the names
of
the states in which the securities will be offered and whether the
securities will be registered in such states. See Item 508(c) of
Regulation S-B.
59. We note the statement that "[s]elected broker-dealers may sell
our common A shares and will receive standard industry
commissions."
If broker-dealers assist the company in selling the company`s
securities, the company should disclose that the company must file
an
amendment to the registration statement which provides the name(s)
of
the broker-dealer(s), describes the relationship between the
company
and such broker-dealer and identifies the broker-dealer(s) as
underwriter(s). See Item 508 of Regulation S-B.
60. Please identify any finders. See Item 508(g) of Regulation S-
B.
61. These securities appear to be penny stocks. Please provide
the
disclosure obligations required by Rules 15g-2 through 15g-6 of
the
Exchange Act.
Market for Common Equity and Related Stockholder Matters, page 27
62. Please clearly disclose that there is no public trading market
for the common stock. See Item 201(a)(1) of Regulation S-B.
Financial Statements
Other
63. Please provide a currently dated consent with any amendment
to
the registration statement.
Part II
Item 26. Recent Sales of Unregistered Securities
64. For each transaction, please include the total offering price.
See Item 701(c) of Regulation S-B.
Item 28. Undertakings
65. Please include the disclosure required by Item 512 of
Regulation
S-B. For example, see Item 512(a)(4).
Exhibits - Legality Opinion
66. Revise your legality opinion to indicate that opinion opines
upon
Illinois law including the Illinois Constitution, all applicable
provisions of the statutory provisions, and reported judicial
decisions interpreting those laws.
* * * * *
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 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 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 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.
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) 551-3374 or Hugh West
at
(202) 551-3872 if you have questions regarding the financial
statements and related matters. Questions on other disclosure
issues
may be directed to Ronald E. Alper at (202) 551-3329 or Thomas
Kluck,
who supervised the review of your filing, at (202) 551-3233.
Sincerely,
John Reynolds
Assistant Director
cc: Jody Walker, Esq.
Fax: (303) 220-9902
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Mr. Joseph A. Merkel
American Antiquities, Inc.
January 27, 2006
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