Mail Stop 3720
February 8, 2006
Mr. Richard Izumi
Chief Financial Officer
PPOL Inc.
1 City Boulevard West, Suite 820
Orange, CA 92868
Re: PPOL Inc.
Form 10-K for Fiscal Year Ended March 31, 2005
Filed September 1, 2005
Form 10-Q for Quarter Ended September 30, 2005
Filed November 14, 2005
File No. 0-50065
Dear Mr. Izumi:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents. Please address the following comments
in
future filings. If you disagree, we will consider your
explanation
as to why our comment is inapplicable or a future 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 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.
Form 10-K for the Fiscal Year ended March 31, 2005
Business
I. Research and Development Activities, page 17
1. You had a significant decrease in your 2005 research and
development expenses as compared to 2004. We are unable to locate
a
detailed discussion of these expenses in your MD&A. It is unclear
why these expenses increased significantly in 2004 and decreased
in
2005 to the level lower than 2003. We also note on page 31 that
research and development of your products and services is a
"critical
component" of your business. Please revise your discussion
accordingly.
Management`s Discussion and Analysis of Financial Condition
and
Results of Operations
Year Ended March 31, 2005 Compared to Year Ended March 31,
2004
Cost of Sales, page 24
2. We understand that you have a promotional program for new
members
who join a mutual health insurance plan administered by AJOL.
This
program provides refunds of their insurance premiums if they do
not
make claims in their first year. Please confirm to us that the
"appreciation gifts" refer to the refund. If not, tell us the
nature
of the appreciation gifts. Also, tell us the amount of the
accrual
and how the accrual was determined.
Consolidated Statement of Operations and Comprehensive (Loss)
Income
3. Please separately present the product and network services
sales
and the related cost of sales under Rule 5-03(b)(1) and (2) of
Regulation S-X. Also, separately present the cost of sales for
other
on-line services.
Note 1. Organization and Summary of Significant Accounting
Policies
Restricted Cash and Advances Received - Cube, page F-8
4. Please provide us with more details regarding your agreement
with
Kamome Benefit Club, including how advance payments and orders
from
distributors are maintained through the Cube system. Also, tell
us
how these transactions are processed and accounted for under this
agreement.
Form 10-Q for the period ended September 30, 2005
Note 1. Organization and Summary Of Significant Accounting
Policies
Stock-based Compensation, page 8
5. Please tell us why there is no stock-based compensation
reflected
for 2004 in your pro forma tabular presentation. We note you
granted
1.3 millions options in 2004.
Note 2. Related Party Transactions, page 10
6. You disclose that USC is in the development stage with no
revenues. Please expand your MD&A to discuss in more detail the
following:
* How a development stage company will enhance your future growth
opportunities and provide your present operation with synergies;
* Why the establishment of a comparable company was considered in
determining the purchase price;
* The contacts USC had with prospective vendors; and
* Why a development stage company was considered to be a
"potential
competitor" in determining the purchase price.
7. If the premium you paid to acquire USC was related to USC`s
"contacts with prospective vendors," please tell us why no value
can
be ascribed to these vendors.
8. Please tell us the nature of the intangible assets of $290,227
($2,051,438-$1,761,211). Also, we note that USC`s software asset
of
approximately $700,000 was written-off during the current fiscal
year. Tell us where this asset is presented in the table of
assets
acquired and liabilities assumed.
* * * * *
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please furnish
a
letter that keys your responses to our comments and provides any
requested information. Detail letters greatly facilitate our
review.
Please file your response letter via EDGAR. Please understand
that
we may have additional comments after reviewing your responses to
our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings 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 filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; 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 filings or
in
response to our comments on your filings.
You may contact Bob Carroll, Staff Accountant, at (202) 551-
3362 or Dean Suehiro, Senior Staff Accountant, at (202) 551-3384
if
you have questions regarding comments on the financial statements
and
related matters. Please contact me at (202) 551-3810 with any
other
questions.
Sincerely,
/s/ Kyle Moffatt for
Larry Spirgel
Assistant Director
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Mr. Richard Izumi, Chief Financial Officer
PPOL, Inc.
February 8, 2006
Page 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE