Mail Stop 3561
April 14, 2006
Hugo M. Cancio, Chief Executive Officer
Fuego Entertainment, Inc.
19250 NW 89th Court
Miami, Florida 33018
Re: Fuego Entertainment, Inc.
Amendment No. 8 to Registration Statement on Form SB-2
Filed March 30, 2005
File Nos. 333-127612
Dear Mr. Cancio:
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
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments. The
page numbers referred to in this letter correspond to the page
numbers in the marked copy of Amendment No. 8 to the Form SB-2
registration statement you filed on EDGAR on March 30, 2006.
General
1. We note that on the web site www.cablecastermagazine.com, there
is
an article dated March 30, 2006 stating that CHUM International
will
launch a Citytv format station in Puerto Rico that would replace
the
existing local station based on the signing of a licensing
agreement
with you. Please tell us why you have not included this
information
in your registration statement.
2. We note that the article states that you are owned by Hugo
Cancio
and Juan Pablos Santos. However, there is no mention of Juan
Pablos
Santos in your registration statement. Please discuss your
relationship with Juan Pablos Santos, if any.
Management`s Discussion and Analysis, page 12
Plan of Operation, page 12
3. We note your response to comment 5 in our letter dated March
17,
2006. Please consider including the response from your letter
dated
March 30, 2006 as the second sentence in the last paragraph on
page
16.
4. We note your response to comment 6 in our letter dated March
17,
2006. In the last paragraph on page 15, you state that you are
planning to help produce the Havana Night Club show in Puerto
Rico,
which is not part of the original agreement you signed with
Viashow
regarding the Celebrate Freedom Tour 2005. Please discuss the
limitations, if any, that your original Royalty Agreement dated
March
3, 2005 and amended on September 18, 2005 will have on your
participation in the new production. Also, please disclose the
producer of the new Puerto Rico show. Further, since "there are
no
agreements as of yet for this particular show," please describe
your
basis for stating that you will receive 20% of the production`s
revenue.
5. We note that in your response to comment 3 in our prior letter
dated January 12, 2006, you stated: "there are no affiliations
between Mr. Casavant and the projects being undertaken by the
company, though Mr. Casavant was involved in one of the projects
wherein he hired the company solely as an independent contractor
to
produce a corporate video." Based on the Royalty Agreement you
filed
as Exhibit 10.1 to this registration statement, it appears that
Mr.
Casavant was a co-investor in the Havana Night Club Show-Five City
Tour. Please disclose your relationship with Mr. Casavant
relating
to the Five City Tour.
6. We note that the first paragraph of the Royalty Agreement
states
that you, Hugo Cancio, the UAJC 2005 Irrevocable Trust, and the
MDW
and GRW 2000 Irrevocable Trust are individually and collectively
referred to as the "Investor." Also, Section 1.1 of the Royalty
Agreement states that the Investor shall pay the Promoter the sum
of
$1.5 million and Sections 1.3(a) and (b) state that you will
receive
20% of the tour`s revenues, but in the first paragraph of your
Plan
of Operation section on page 12, you state that you invested only
$57,400 in the tour. Please tell us why you will receive 20% of
the
tour`s revenue when you have invested only $57,400. We may have
further comments based upon your response.
7. In this regard, it appears that you may be jointly and severely
liable with Hugo Cancio, the UAJC 2005 Irrevocable Trust, and the
MDW
and GRW 2000 Irrevocable Trust for the $1.5 million investment.
Please disclose if the investment price has been paid in full. If
not, please disclose whether you may be liable for more than the
$57,400 already paid by you should any or all of the other
investors
fail to pay their fair share, any unpaid investment amount accrued
by
you, or your basis for not accruing any amount. In your
disclosure,
please include your consideration of SFAS No. 5 in your
determination.
8. Section 1.1 of the Royalty Agreement refers to a spread sheet
prepared by Prager and Fenton that is attached as Exhibit A.
Please
re-file the Royalty Agreement with Exhibit A.
Description of Business, page 20
Projects, page 22
9. We note your response to comment 12 in our letter dated March
17,
2006. In the first paragraph on page 23, you state that Anthony
Pulluccino is no longer part of the Trader Show and that you ended
your working relationship with Mr. Pulluccino in June 2005.
Therefore, it appears that much of your description of the Trader
Show in the last paragraph on page 22 is no longer applicable.
Please revise or advise us. In addition, we note that the website
for The Trader Show at www.thetradershow.com says "the show
focuses
on the real life activities of Anthony Pullicino (AKA, The
Trader)."
Again, this website appears to be inconsistent with your response
to
comment 12 in our letter dated March 17, 2006. Please reconcile
the
inconsistency and revise your disclosure or the web site as
appropriate.
Financial Statements, page 36
10. Please update your registration statement and include the next
interim set of financial statements as of February 28, 2006. See
Item 310 (g) of Regulation S-B. Also, please revise your
disclosures
to provide a comparable discussion of the additional period in
your
Management`s Discussion and Analysis section and throughout the
registration statement, as applicable.
Notes to Financial Statements, page 42
4. Capitalized Production Costs, page 45
11. We note your response to comment 15 in our letter dated March
17,
2006. Your response and revised disclosure suggests the episodes
of
the Trader Show featuring Mr. Pulliccino will not be used in the
production of the final version of the project. As a result, the
capitalized costs for these episodes are required to be charged to
income. See paragraph 32 of SOP 00-2. Please revise your
unaudited
interim financial statements to record a loss for the amount of
capitalized costs that exceeds the estimated fair value. Further,
please provide the disclosures set forth in APB 20, paragraph 36
and
37. In your response, please justify your estimate of fair value,
if
any. We look to objective evidence as the best support for the
determination of fair value. Also, please revise your disclosures
for film projects on pages 22 and 47 of your registration
statement.
Part II - Information Not Required In Prospectus, page 49
Undertakings, page 54
12. We note your response to comment 16 in our letter dated March
17,
2006; however, we reissue our previous comment asking you to
include
the undertakings required by Item 512(a)(4), (e), and (g)(2) of
Regulation S-B.
Exhibit 23.1
13. Please revise the independent auditor`s consent to include a
reference to the term experts. We refer you to exhibit 23.1 in
your
registration statement filed on October 5, 2005. Also, please
revise
the date to coincide with the updated financial statements, as
applicable.
* * * * * *
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 amendment and
responses
to our comments.
You may contact Brian McAllister, Staff Accountant, at (202) 551-
3341, or Donna DiSilvio, Senior Accountant, at (202) 551-3202, if
you
have questions regarding comments on the financial statements and
related matters. Please contact John Fieldsend, Staff Attorney,
at
(202) 551-3343, Peggy Kim, Senior Attorney, at (202) 551-3411, or
me
at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: William D. O`Neal, Esq.
The O`Neal Law Firm, P.C.
Via Fax: (480) 816-9241
Hugo M. Cancio, Chief Executive Officer
Fuego Entertainment, Inc.
April 14, 2006
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