Mail-Stop 4561
January 10, 2006
Via facsimile and U.S. Mail
Mr. Henry Fong
President, Treasurer
Equitex, Inc.
7315 East Peakview Avenue
Englewood, Colorado 80111
Re: Equitex, Inc.
Revised Preliminary Proxy Statement
File No. 0-12374, filed December 21, 2005
Form S-3
File No. 333-130316
Filed December 14, 2005
Dear Mr. Fong:
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. 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.
Proxy Statement
Recent Sales of Unregistered Securities, page 24
1. With regard to the individuals and entities receiving
compensation
that you identified in your previous response, supplementally
advise
us as to whether they are licensed to sell securities. If not,
advise
us as to the exemption that allowed them to sell the securities in
that offering.
2. With regard to your previous response number 3, the staff
questions whether two transaction by the Company complied with
NASD
Rules 4310 (C )(25)(H)(i) and 4460 (i)(1) which appear to require
shareholder approval prior to the initiation of the transactions.
In
this regard, supplementally provide the staff with the following
information regarding these three transactions:
* The number of common shares outstanding on the day prior to the
transaction date;
* The market price of the common stock on the date of the
transaction;
* The potential number of common shares issuable as a result of
the
transaction; and,
* Whether or not shareholder approval was sought, and, if so, on
what
date and by what means.
The two transactions are: (1) the March 2004 sale in convertible
promissory notes of $5,000,000, convertible into common at 85% of
the
market price, along with 133, 334 warrants and an additional
50,000
warrants issued to an advisory firm (See footnote 8C form the Form
10-K) and (2) the September 2005 issuance of $1,500,000
convertible
promissory note and 125,000 warrants.
3. With regards to the $5,000,000 Note and the Registration on
Form
S-3, file number 333-116294, advise us as to why the Form 10-K
indicates a conversion rate of $8.10, then $6.885 when the
Agreements
state $1.35 and the Registration Statement indicates this was
reduced
to $1.1475. In addition, provide us with a list of shares issued
under these Agreements, whether for interest on the notes,
conversion
of the note or exercise of warrants and the prices/values used for
each such issuance. Finally, advise us if the Prospectus in this
Registration Statement is still being used.
4. With regards to the September 2005 sale noted above, advise the
staff supplementally as to how many shares of common stock have
been
issued pursuant to this transaction, either through conversion of
the
note, exercise of the warrants or through payment of interest on
the
note and at what prices/values. Finally, please inform us as to
when
the agreement(s) underlying the note were filed with the
Commission,
i.e., the date filed.
5. Noting the recent development section proposed (and provided in
your previous response), revise to add additional disclosures
regarding whether the Company will have any revenue generating
operations after the sale as well as the impact on the Agreements
underlying the 2 transaction involving the convertible promissory
notes identified above as well as any other agreements that are
potentially adjustable as a result of the Chex asset sale.
6. We note that you relied upon Regulation D, Rule 506 for many,
if
not all, of the issuances that were supplementally identified,
however, we do not find any of the required Forms D to have been
filed. Please advise or file the Form D`s.
7. We note that many of the private placements were conducted
while
effective registration statements were being used. In this regard,
please advise us as to what Prospectuses the Company is still
using
(selling shareholders offerings included), how many shares that
were
sold under each active prospectus thus far and how many shares are
still being offered under active prospectuses. Finally, provide us
with authority to conduct private placements while active public
offerings are still ongoing.
8. Similarly, several of your private placements were completed at
a
time in which you were in registration for resales of your common
stock. Please provide your detailed legal analysis as to why the
private placements should not be integrated with the ongoing
registration process as the registration statements could act as
general solicitation for your common stock.
Form S-3
Selling Shareholders, page 15
9. Supplementally advise the staff as to which promissory note(s)
the
shares listed in the selling shareholder section for Pandora and
Whitebox relate, e.g., the $1,500,000 note.
10. Revise the selling shareholder section to indicate a natural
person for each entity listed. The listed person(s) should have
dispositive power for the entity`s shares.
11. Revise the selling shareholder section to include a percentage
column that identifies the percentage currently owned, which
includes
all shares that can be acquired within the next 60 days divided by
the actual Company shares currently outstanding. In this regard,
shares that can be acquired or sold pursuant to other prospectuses
should also be included as part of the numerator of the
calculation.
Closing Comments
As appropriate, please amend your filing 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 amendment to expedite our review. Please furnish a cover
letter
with your amendment 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 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
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 filing or in
response to our comments on your filing.
Any questions regarding the comments may be directed to
Michael
Clampitt at (202) 551-3434 or to me at (202) 551-3698.
Sincerely,
Christian Windsor
Special Counsel
Financial Services Group
CC: Via U.S. Mail and Fax: (612) 642-8305
Paul Chestovitch, Esq.
Maslon, Edelman, Borman & Brand, L.L.P.
3300 Wells Fargo Center
90 South 7th Street
Minneapolis, MN 55402
??
??
??
??
Mr. H. Fong
Equitex, Inc.
Page 4