Mail Stop 6010 April 14, 2006
Stephen L. Rohde,
President, Treasurer and Director
Premier Indemnity Holding Company
3001 North Rocky Point Drive, Suite 200
Tampa, Florida 33607
Re: Premier Indemnity Holding Company
Form S-1 Registration Statement filed March 16, 2006
File No. 333-132482
Dear Mr. Rohde:
We have examined 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 note that where we provide examples to illustrate what
we
mean by our comments, they are examples and not exhaustive lists.
If
our comments are applicable to portions of the filing that we have
not cited as examples, make the appropriate changes in accordance
with our comments.
2. In your response letter, please state our comment and then
explain
each change that has been made in response to a comment. In
addition, you should also reference each page number in which
disclosure has been revised in response to a comment so that we
can
easily place your revised disclosure in its proper context.
3. Please file as promptly as possible all exhibits required by
the
Exhibit Table provided in Item 601(a) of Regulation S-K. We note,
for example, that you have not filed the opinion or consent of
your
legal counsel nor your executed escrow agreement. Please note that
we
may have additional comments upon examination of any exhibits once
they are filed.
4. Please note that you should identify the escrow agent in the
prospectus pre-effectively and you should file the executed escrow
agreement in a pre-effective amendment.
5. To the extent practicable, please complete all of the blank
sections of your filing in your next amendment.
6. Please provide us proofs of any graphic, visual or photographic
information you will provide in the printed prospectus prior to
its
use in the prospectus. Please note we may have comments regarding
this material.
7. Please clearly state your fiscal year end in the filing.
Prospectus Cover Page
8. The cover page information including the footnotes is quite
extensive and includes a significant amount of repetition. For
example, most of the information in Footnotes 1 and 2 is
duplicative
of the information already provided on the cover page or elsewhere
in
the prospectus. Please eliminate these footnotes and any other
duplicative information. The information you retain should be the
information that is most material to investors. In that regard
please
refer to Item 501 of Regulation SB. To the extent you need to
relocate information that is not included elsewhere in the
prospectus
you can relocate it to "The Offering" section in the summary or
the
"Plan of Distribution" section.
9. Please revise the information about the secondary offering on
the
cover page to eliminate any suggestion that the officers who are
selling the shares offered by the company are also engaged in
sales
efforts on behalf of the selling shareholders. For example, in the
second sentence of the first paragraph you mention the sale of the
selling shareholder`s shares in close proximity to a discussion of
the sale of shares in the primary offering and in the table you
include a column entitled "Proceeds to Selling Stockholder." This
may suggest to some readers that the secondary offering is a part
of
the officers` and directors` sales effort. You should briefly
mention
the selling shareholder offering in a separate paragraph on the
cover
page but then provide more information about it in the "Plan of
Distribution" section.
10. In addition to stating that the selling shareholder has agreed
not to sell its shares until after the company sells the minimum
number of shares, you should state at what price the selling
shareholder will sell its shares once it commences doing so until
a
market for the shares develops. We note that after escrow is
broken
there is no guarantee that a market for the shares will develop.
11. As we have asked you to eliminate the column "Proceeds to
Selling
Stockholder" from the table and provide the price at which the
selling shareholder will offer the shares until a market develops,
please eliminate Footnote 4 from the table.
12. We note that you reserve the right to engage NASD member firms
to
sell the shares you are offering. You should file the form of
Sellers
Agreement you intend to use as an exhibit to the registration
statement, describe all the material terms thereof in the
prospectus
under "Plan of Distribution" and provide it to the NASD so that
they
can clear the underwriting compensation prior to effectiveness.
Otherwise, if you decide to engage NASD member firms after
effectiveness you will need to suspend your offering until you
obtain
such NASD approval.
13. We note you are relying on Rule 3a4-1 of the Securities
Exchange
Act of 1934 for the offering of the company`s shares by officers
and
directors of the company. Please advise us supplementally as to
the
actual persons who may offer these shares and identify them in the
prospectus. Please also provide your supplemental analysis
regarding
the applicability of Rule 3a4-1 to this offering. We may have
further
comments.
About Premier Indemnity Holding Company, page 4
14. The third, fourth and fifth sentences of the second paragraph
under this caption suggest that the registrant will undoubtedly
engage in additional capital raising, enhance its portfolio of
products, increase sales and spread operating costs over a larger
revenue base in away that increases its profitability. As the
registrant has not yet commenced operations, you should revise
this
disclosure to provide a more balanced view that includes
substantial
disclosure regarding the challenges you will face. Please revise
similar disclosure, if any, as requested herein throughout the
prospectus.
The Offering, page 4
15. Provide the information required by Item 505 of Regulation SB.
The staff notes that the registrant currently has no operations or
assets and there is no market for its shares. If the registrant
priced the shares considering both the amount of proceeds they
desired to raise and the amount of the company current
shareholders
desired to retain, please provide appropriate disclosure.
Use of Proceeds, page 4
16. We note that officers and directors may participate in the
offering. You should afford purchasers the opportunity to evaluate
the extent to which the offering could be consummated and their
funds
used to purchase shares without a substantial amount of interest
from
the general public. In that regard, please revise this section to
identify the persons who may purchase shares, the maximum number
of
shares they may purchase in order to enable the company to break
escrow and what those persons intend to do with the shares they
purchase. Indicate whether these persons will hold or resell the
shares they purchase.
17. Please provide a separate risk factor indicating the risks to
purchasers as a result of substantial purchases by current
shareholders in order to break escrow (i.e. without a wide
distribution of shares or wide public participation).
Subscription Information, page 5
18. We note your reference to the Purchase Order Form provided in
Appendix A but have not located the appendix. Please file this
form
as an exhibit to the registration statement. We may have further
comments upon review of the exhibit.
We Amended Our Articles of Incorporation to Allow Our Board to
Issue
One or More Series of Preferred Stock, page 7
19. Please expand the risk factor heading to briefly refer to the
potential negative effects for common shareholders if the company
issued preferred stock and expand the text of the risk factor to
provide more detailed information that explains how preferred
stock
may be issued with various types of voting, dividend and
liquidation
rights and how these scenarios would negatively affect common
stockholders.
Our Success Depends Significantly Upon Our Management and an
Easily
Copied Business Model, page 7
20. The risk faced by shareholders does not appear to be clearly
disclosed either in the heading or the text. Please revise both to
identify the risk and the possible adverse consequences. If the
risk
factor relates to the registrant`s competitive position please
provide appropriate disclosure and discuss the specific
competitive
situation for homeowners insurance in the state of Florida the
company will face. Identify the major competitors and the areas in
which the registrant would have to compete. If the risk factor
relates to another risk, please rewrite the risk factor heading
and
the text to explain.
We Anticipate Relying on Others for Operations and Portfolio
Management, page 8
21. The heading of this risk factor indicates you will rely upon
WaterStreet for portfolio management services in additional to
operational services but the text indicates that WaterStreet`s
services relate to operations. Please revise the heading, if
appropriate. Furthermore, a risk factor follows which is entitled
"We
anticipate relying upon other for portfolio management expertise
in
managing our planned investments." The text of this risk factor
does
not identify a portfolio manager and therefore suggests you have
not
identified or engaged one. Please revise all disclosure to
eliminate
any inconsistencies. If you have engaged a portfolio manager
please
provide appropriate disclosure herein and in the "Business"
section
and file any material agreements as exhibits to the registration
statement.
22. Please revise the prospectus where appropriate to disclose the
history and track record of WaterStreet Company in providing the
type
of services which the registrant intends to purchase. Also
disclose
the specific resources WaterStreet will have available to enable
it
to provide the services the registrant will need. Also, indicate
herein or in the summary how the registrant was introduced to
WaterStreet, and disclose the extent of any past or present
affiliations between the registrant`s officers and directors and
WaterStreet.
We Anticipate Relying on Independent Insurance Brokers to Market
and
Sell Our Planned Insurance Products, page 8
23. Please provide specific information indicating the extent to
which the registrant either has or has not yet engaged independent
insurance agents to sell its insurance products.
We Currently Do Not Have an Underwriter for This Offering and We
Are
Relying Upon this Offering to Raise Capital, page 8
24. Aside from the risks to a company related to the ability to
sell
an offering without an underwriter, there are substantial risks to
a
purchaser who purchases shares in an offering without an
underwriter.
In this case, the purchaser doesn`t have the advantage of the
underwriter`s due diligence. Please provide a separate risk factor
following this one that outlines the underwriter`s due diligence
obligation, its role in pricing the offering and confirming the
disclosure included in the prospectus and the resulting risk to a
purchaser of purchasing shares in a self-underwritten offering.
Use of Proceeds, page 10
25. The amount of proceeds for "Working Capital" under the minimum
proceeds scenario appears to be incorrect. Please revise.
Dilution, pages 11-12
26. Please expand this section to compare the relative ownership
and
relative capital contributions of the purchasers in this offering
with the current shareholders of the company.
Plan of Operation, page 12
27. Please provide the information required by Items 303(a)(1)(i)
through (iv) of Regulation SB.
Market for Common Equity and Related Stockholder Matters, page 13
28. The first sentence of this section suggests that the
registrant`s
common stock will definitely trade on the OTCBB. However, whether
a
market will exist on the OTCBB will depend upon whether a market
maker will apply to trade the common stock. Please revise the
disclosure to eliminate the inference that the shares will
definitely
trade and disclose whether any member firm has applied to trade
the
registrant`s common stock.
Independent Auditor`s Report
29. We note that your independent accounting firm, Hamilton
Misfeldt
& Company, P.C., does not appear to be registered with the Public
Company Accounting Oversight Board (PCAOB). Section 102 of the
Sarbanes-Oxley Act of 2002 requires that an accounting firm be
registered with the PCAOB to issue an audit report with respect to
any issuer beginning after October 22, 2003. This provision
applies
to any issuer whose securities are registered under Section 12 of
the
Securities Exchange Act of 1934; that is required to file reports
under Section 15(d) of that Act; or that files or has filed a
registration statement that has not yet become effective under the
Securities Act of 1933 and has not been withdrawn. Since your
current independent accounting firm is not registered with the
PCAOB,
they will not be able to make any updates to the previously issued
report dated February 15, 2006 as a result of substantive audit or
review work that might be required in connection with this
registration statement until such time they register with the
PCAOB.
Additionally, they will not be able to issue audit reports on
subsequent annual period financial statements nor perform SAS 100
review procedures on any interim financial statements required to
be
included in Form 10-QSB. However, they may issue a consent to the
use of the originally issued audit report dated February 15, 2006
since the report was issued prior to time you met the definition
of
an issuer.
30. Please advise your independent auditors` to specify the city
and
state of issuance on their report, as required by Item 2-02(a)(3)
of
Regulation S-X, and to revise their report accordingly.
Consolidated Financial Statements - General
31. We note your disclosure on page 4 that you are a development-
stage company. In accordance with SFAS No. 7, paragraph 12, please
revise your financial statements to clearly identify that they are
those of a development-stage entity. Additionally, please ensure
that
you have provided all of the information required by paragraph 11
of
SFAS No. 7; in particular, designate that your statements of
operations, cash flows and shareholders` deficit present
cumulative
data from inception and provide a statement of shareholders`
deficit
in accordance with paragraph 11 d. In addition please revise the
independent auditors` report to identify the registrant as a
development-stage company.
Notes to Financial Statements
Note 1: Summary of Significant Accounting Policies, page F-6
32. Based on your disclosures in the section entitled "Description
of
Business," beginning on page 14, we surmise that you expect to
derive
the majority of your revenue from two principal sources: premiums
from policies written and investment income from your investment
portfolio. It appears that management should consider whether
accounting policies, such as revenue recognition on insurance
premiums; estimation of loss reserves; deferral of policy
acquisition
costs; and other-than-temporary losses on investments; should be
disclosed in notes to the financial statements.
33. Please disclose your accounting policy with respect to income
taxes, citing the applicable authoritative literature; for
example,
whether your policy complies with the provisions of SFAS No. 109.
34. Please disclose your accounting policy with respect to share-
based payments, referring to SFAS No. 123(R), EITF No. 96-18 and
other applicable authoritative literature.
Note 2: Long-term Debt, page F-6
35. Please revise your disclosure to include information regarding
the related-party nature of your material debt transactions. Refer
to
paragraph 2 of SFAS No. 57.
Note 3: Common Stock, page F-6
36. You disclose on page 30 that, on February 2, 2006, you issued
approximately 40.4 million of your common shares, valued at
$0.0024/share, in exchange for various consulting and other
services
rendered by related parties. Please provide us with additional
information and revise your disclosure as follows:
* Provide us with additional information regarding your valuation
of
the share price in the February 2, 2006 transactions. Refer to
paragraph 7 of SFAS No. 123(R) and to EITF No. 96-18 in
considering
your valuation methodology.
* For each transaction disclosed on page 30, specify the date(s)
on
which the parties rendered the services and tell us the period in
which you recorded the related expense in the financial
statements,
as well as your basis for recording each amount in the applicable
period. Refer to paragraph 5 of SFAS No. 123(R).
37. Additionally, please revise the notes to your financial
statements to disclose the February 2, 2006 transactions, as it
appears they occurred prior to the issuance of the financial
statements; that is, the material nature and timing of the
transactions appear to indicate a subsequent event. In revising
your
disclosure, please refer to paragraph 2 of SFAS No. 57.
Signatures
38. Please amend your signature page to indicate who is signing
the
registration statement in the capacity of Chief Executive Officer.
Pleas refer to the instructions for signatures in the Form SB-2.
As appropriate, please amend your filing 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 file your cover letter on
EDGAR under the form type label CORRESP. 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 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.
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 Amy Bruckner at (202) 551-3657 or Joseph
Roesler at (202) 551-3628 if you have questions regarding comments
on
the financial statements and related matters. Please contact Mary
Fraser at (202) 551-3609 or me at (202) 551-3715 with any other
questions.
Sincerely,
Jeffrey Riedler
Assistant Director
cc: William M. Aul, Esq.
Law Office of William M. Aul
7676 Hazard Center Drive, Suite 500
San Diego, California 92108
Stephen L. Rohde
Premier Indemnity Holding Company
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