Mail Stop 0511
May
3, 2005
Buddy Young, President
Futura Pictures, Inc.
17337 Ventura Boulevard, Suite 208
Encino, California 91316
RE: Futura Pictures, Inc. ("the company")
File No. 333-123611
Registration Statement on Form SB-2
Filed March 28, 2005 and amended March 30, 2005
Dear Mr. Young:
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.
Registration Statement Cover Page
1. The amount of the SEC filing fee stated in the table on the
cover
page of the registration statement and that shown in the Item 25,
"Other Expenses of Issuance..." should reconcile. Please revise
as
appropriate.
Prospectus Summary
Use of Proceeds
2. The second sentence, "[W]e anticipate selling all of the
3,000,000
shares and having $540,000 in net proceeds..." is noted. Please
state the basis for this representation or delete it.
3. With respect to the second paragraph of this section, please
indicate here or in another appropriate section of the prospectus
how
many employees will need to be hired to commence operations and
how
many can be hired assuming various levels of shares are sold and
if
minimal or no shares are sold.
Summary Financial Information
4. Please provide in tabular form summary financial information in
this section.
Risk Factors
5. The second sentence should make clear that all of the material
risk factors have been addressed in this section.
6. It is suggested that all capital letters be eliminated from the
risk factor headings; rather, please use bold-face letters for
emphasis.
7. Please add a risk factor addressing the adverse effects if only
a
nominal amount of securities is sold in the offering.
"Our Operations Will Require Outside Financing..."
8. It appears that you are combining two (2) risk factors here;
one
addressing financing and the other, dilution. Please separate
these
and present as two separate risk factors.
"As a Result of Our Limited Capital Resources..."
9. The reference here to "various outside business interests..."
is
noted. If these other activities present a potential conflict of
interest, another risk factor should be provided to address this
concern.
10. If management has had no prior business experience in this
specific line of work, please consider another risk factor
accordingly.
Disclosure Regarding Forward-Looking Statements
11. Please delete the word "will" from the list of terms.
Use of Proceeds
12. Under this section, you show a "50% of the offering" and "100%
of
the offering" scenario, while under "Dilution" you provide a table
with scenarios of 33%, 67%, and 100%. For sake of clarity and
consistency, please revise as appropriate to make the disclosure
consistent and comparable.
13. Please disclose whether any proceeds will or may be used to
repay
loans from Mr. Young.
Market for Common Equity...
No Public Market
14. It is noted, "[I]f and when Futura Pictures is successful in
having its shares listed and publicly traded, this offering will
automatically terminate." Please fully explain the reason for
this
provision. In this regard, we note disclosure that you will seek
quotation or listing on a securities market following
effectiveness
of the registration statement. The termination of the offering
shortly after effectiveness may prevent Futura from raising
capital
adequate to execute its business plan and thus the early
termination
is confusing. Please explain as appropriate.
Management`s Discussion and Analysis
15. Please explain the issuance of securities for services to date
and any anticipated services. Please describe the services
rendered
and/or to be rendered, disclose the principal terms of consulting
service agreements, name the parties rendering the services and
describe their qualifications and experience in providing these
services. Please file any consulting agreements as exhibits to
the
registration statement.
Plan of Operation
16. Please significantly expand the disclosure in this section to
detail the specific activities to be taken in the 12 month period,
explain how the activities will be performed, quantify the
expected
cost and disclose the time for completion. If the nature and
extent
of your operations will depend on the amount of proceeds received
in
your offering, please explain.
17. To the extent not disclosed in response to the preceding
comment,
disclose the milestones which need to be achieved before Futura
will
commence earning revenues from its proposed business activities,
quantify the cost of each milestone and disclose the timeframe for
achievement.
18. Please state the amount of the promissory note and its
material
terms. Please also file the note as an exhibit to the
registration
statement as required by Item 601(b) of Regulation S-B.
19. Please disclose whether or not the company can go forward with
its operational plans without the proceeds from this offering or
whether there is some minimum amount it must receive in order to
commence operations.
Liquidity and Capital Resources
20. State the company`s cash balance as of a recent date.
21. Please file as exhibits the option agreements on the two
screenplays, as required by Item 601(b) of Regulation S-B. Also,
please disclose all of the material provisions of the option
agreements.
Description of Business
Overview of the Motion Picture Industry
22. In light of the fact that the description of the motion
picture
industry is outside of what the company will do, please clarify
the
company`s role in relation to the industry
Competition
23. Revise to expand the last paragraph of this section to clarify
"...sustain ongoing relationships with writers, directors, actors,
...." Please state whether or not the company presently has any
relationships, affiliations, or understandings with any such
writers,
directors, or actors.
Description of Property
24. We note the company presently utilizes office space at no
cost,
from the company`s attorney. Please disclose whether or not there
is
any understanding or agreement regarding future compensation or
work.
Management
25. Please disclose the nature of the activities of Advantage
Mergers
and Acquisitions, including the nature and extent of any
activities
connected with the offering of securities or the offer and sale of
securities, either as principal or agent for others. Please
disclose
the nature of any involvement by Advantage Mergers and
Acquisitions
in transactions engaged in by the reporting companies listed in
Mr.
Young`s business experience description. Please quantify any cash
or
non-cash compensation received by Advantage Mergers in connection
with those transactions.
26. From a review of filings by reporting companies controlled by
Mr.
Young and other members of Futura`s management, we note that in at
least 2 prior instances the reporting company sold its public
status
to the control persons of a private operating company and the
assets
held by the reporting company were returned to Mr. Young and his
associates. These transactions suggest that the prior reporting
companies -Advanced Knowledge, Inc. and Becor Communications, Inc.
- -
were blank check companies. Please disclose these prior events
and
disclose whether Futura should be considered a blank check company
under Rule 419. If you do not believe Futura is a blank check
company, please explain in your disclosure.
27. Please expand the business experience descriptions to briefly
indicate the business activities of each named entity. Also,
please
indicate which entities are SEC reporting companies.
28. The business experience descriptions of several individuals
appear to omit positions with Advanced Media Inc. and Advanced
Media
Training Inc. Please revise.
Compensation of Officers and Directors
29. Please provide the compensation table as required by Item
402(a)
of Regulation S-B.
Certain Relationships and Related Transactions
30. Please name each promoter and provide the disclosure required
by
Item 404(d) of Regulation S-B. See the definition of promoter in
Rule 405 of Regulation C.
31. The initial paragraph should be expanded to include the
information contained in Note 5 to the financial statements
regarding
the 190,000 shares of company stock paid to Mr. Young for the loan
commitment.
32. The second paragraph and the disclosure under "Description of
Property" should be consistent regarding the company`s use of
office
space provided by Mr. Albright. The disclosure hereunder states
that
the approximately 600 square feet will be "adequate for our
operations through the end of our current fiscal year..." but
under
"Description..."it states that approximately 500 square feet is
currently utilized but "[W]e anticipate leasing office space from
an
unaffiliated third party...as cash resources permit." Please
revise
as appropriate.
Principal Stockholders
33. The percentage owned by all officers and directors does not
appear correct. Please revise or explain supplementally.
Plan of Distribution
34. Please update the status of applying to register or qualify
the
company`s common stock for resale pursuant to the "Blue Sky" laws
in
New Jersey and Florida.
35. Please supplementally explain the facts supporting the
availability of Rule 3a4-1 for Messrs. Young, Spiegelman, Powell
and
Albright in selling the securities in this offering.
36. The last paragraph appears to deal with blank check companies,
which you refer to as "companies whose only business is to seek to
secure business opportunities." Please explain this disclosure.
Legal matters
37. Please provide the disclosure required by Item 509 of
Regulation
S-B.
Part II.
Item 27. Exhibits
38. You have provided the staff several documents that you refer
to
as "exhibits", including the option agreement between the company
and
Frank Gillman, the option agreement between the company and Don
Tsuchiyama, 2004 Annual Report on the Home Entertainment Industry,
and U. S. Entertainment Industry: 2003 MPA Market Statistics.
Please file these documents as part of the registration statement
in
the next amendment to the extent required by Item 601 of
Regulation
S-B, and revise your exhibit index to list each such exhibit.
Financial Statement Comments
Dilution
39. Please provide us with a supplemental schedule supporting the
amounts disclosed on page 9. Also, consider revising to plainly
disclose the net tangible book value as of February 28, 2005.
Loss Per Share
40. It appears that the computation of the company`s loss per
share
should be based on the period from commencement of operation on
January 5, 2005 through year end February 28, 2005. It is not
clear
why the calculation should include periods prior to issuance. See
TPA 5500.03 and Appendix C of SFAS 128.
Development Stage
41. Please expand Note 1 to state that statements of operations
and
cash flows are not presented separately for the period from
December
10, 2003 (inception) to February 28, 2004 because the company had
no
transactions prior to January 5, 2005. Also, please disclose the
company`s fiscal year-end.
General
42. Your attention is directed to Item 310(g) of Regulation S-B
and
the possible need for updated financial statements and related
disclosures.
43. You are reminded that a currently dated consent of the
independent accountants with typed signature should be included in
any amendment to the registration statement. In this regard, the
consent in Exhibit 23.1 should not refer to incorporation by
reference because the auditors report is filed within the
registration statement. Please revise.
Closing 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 this action as 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.
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
provide 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 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 Maureen Bauer at (202) 551-3237 with any questions
regarding accounting issues and you may contact Janice McGuirk at
(202) 551-3395 with any other questions.
Sincerely,
John Reynolds, Assistant Director
Office of Emerging Growth Companies
CC: L. Stephen Albright, Esq.
Via fax (818) 784-0205
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