March 24, 2006
via U.S. Mail
Mr. Norbert Sporns
President and Chief Executive Officer
511 Third Avenue Seattle
Suite 788
Seattle, WA 98101
Re: HQ Sustainable Maritime Industries, Inc.
Form SB-2
File No. 333-132031
Filed February 24, 2006
Forms 10-Q for Fiscal Quarters Ended
March 31, 2005, June 30, 2005 and September 30, 2005
File No. 0-18980
Dear Mr. Sporns:
We have limited our review of your filings to the matters
that
are the subject of 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 information so we may better understand
your disclosure. After reviewing this information, we may 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
filings.
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 SB-2
General
1. We note that Norbert Sporns, your President and CEO,
participated
in an interview that is available at www.meettheceo.com. The
interview is dated February 23, 2006, one day prior to the filing
of
your Form SB-2 registration statement. Please provide us with a
full
transcript of the interview. Also identify for us any statements
he
made that do not appear in the registration statement. We may
have
additional comments.
2. Explain to us what consideration was given beforehand to the
timing of the interview and the possible impact its content could
have on the market for and the market price of your securities,
particularly in light of the registration statement that you filed
immediately thereafter. Discuss what actions you propose to take
to
address this situation, and state if and when you intend to
include
in the prospectus any of the assertions by Mr. Sporns that do not
appear in the prospectus. Among other things, we note that Mr.
Sporns addressed the potential for record growth and increased
earnings per share. We may comment further.
3. Ensure that your financial statements are updated as
appropriate.
Refer to Item 310(g) of Regulation S-B.
Cautionary Note Regarding Forward Looking Statements, page 5
4. Given that your stock is deemed a "penny stock" as defined by
Rule
3a51-1 of the Securities Exchange Act of 1934, please remove all
references to the Private Securities Litigation Reform Act of 1995
in
your first paragraph in this section as the safe harbors contained
in
that Act are not available to you. Also, it appears inappropriate
to
suggest that "will" constitutes a forward looking statement.
Selling Stockholders, page 28
5. On page 27, you indicate that no selling stockholders are
members
of the National Association of Securities Dealers. Please confirm
that none of the selling stockholders is an affiliate of any
registered broker-dealer. If a selling stockholder is an
affiliate
of a registered broker-dealer, please disclose, if true, that such
selling stockholder acquired its shares in the ordinary course of
business and at the time of the acquisition did not have any
arrangements or understandings with any person to distribute the
securities. If not, you must indicate that such selling
stockholder
is an underwriter.
Exhibits
6. File as exhibits all material agreements, as Item 601 of
Regulation S-B requires. For example, we did not find the
subscription agreement relating to the January 25, 2006 financing,
nor did we locate the agreement with Amalgamated Resources
Holdings,
Inc.
Forms 10-Q
7. In your recent Forms 10-Q, you provide various disclosures
concerning "significant" or "material" changes in internal
controls
over financial reporting. In the 3/31/2005 Form 10-Q, you state
that
there were no significant changes that could "significantly
affect"
internal controls over financial reporting.
Item 308(c) of Regulation S-B requires you to disclose whether
there
were any changes in internal controls that materially affected, or
are reasonably likely to materially affect, internal control over
financial reporting during the period covered by the report.
Please
confirm, in accordance with the requirements of Item 308(c)
whether
there were any changes in internal controls over financial
reporting
during the periods covered by each report. Also explain to us why
you include inconsistent disclosure regarding changes in the
various
Forms 10-Q. Ensure that your future filings contain the
disclosure
required by Item 308(c) of Regulation S-B. We may have further
comments.
Closing Comments
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 information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your response 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 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.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of an 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 Mellissa Campbell Duru, at (202) 551-3757 or,
in
her absence, Timothy Levenberg, Special Counsel, at (202) 551-3707
with any other questions.
Sincerely,
H. Roger Schwall
Assistant Director
cc: via facsimile
Joseph Emas, Esq.
(305) 531-1274
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Mr. Norbert Sporns
HQ Sustainable Maritime Industries, Inc.
March 24, 2006
page 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010