MAIL STOP 3720
March 3, 2006
Mr. Ivan Zweig
Chief Executive Officer
IElement Corporation
17194 Preston Road
Suite 102, PMB 341
Dallas, TX 75248
Re: IElement Corporation
Registration Statement on Form SB-2
Filed February 1, 2006
File No. 333-131451
Form 10-KSB for the year ended March 31, 2005
Forms 10-QSB for the quarters ended June 30, September
30
and December 31, 2005
File No. 0-29331
Dear Mr. Zweig:
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.
Form SB-2
1. Please provide a section entitled "Certain Relationships and
Related Transactions" that contains all of the information
required
by Item 404 of Regulation S-B.
Prospectus Cover Page
2. Please revise the introductory sentence to read as follows:
"We
are registering for resale up to...." In addition, the second
sentence in the second paragraph states the shares "may be issued"
from time to time. Since the shares have already been issued,
please
revise to state "may be sold."
3. Please limit the cover page to the disclosure requirements of
Item
501 of Regulation S-B and reduce the length to one page. In doing
so, delete the fifth paragraph discussing the registration rights
granted to the selling shareholders. The last sentence in the
second
paragraph and the entire fourth paragraph repeat information
located
in the first paragraph and should therefore be deleted.
Table of Contents
4. Please consider removing from the table the reference to
Information Not Required in Prospectus and Signatures unless you
intend to deliver Part II along with the prospectus.
Summary, page 1
5. Please revise your summary to discuss very briefly in definite
and
concrete terms the key aspects of your current business and the
services you sell. Your disclosure as currently drafted uses a
number of technical terms to describe your business and services
and
should be revised. Also very briefly state the status of
development
of the services that you intend to provide, such as VoIP services.
Also provide a balanced picture of your financial condition.
Indicate under Company Overview your history of net losses, your
quantified accumulated deficit, your negative working capital and
the
fact that you have relied to date almost entirely on external
financing to fund your operations. Also disclose the fact that
your
auditors have expressed substantial doubt as to your ability to
continue as a going concern.
6. You describe yourself as being a "facilities-based nationwide
communications service provider." Please explain "facilities-
based"
and substantiate the "nationwide" status of your business. You
also
describe yourself as providing "state-of-the-art"
telecommunication
services. Substantiate this claim as well.
7. Please include a brief discussion of the offering and its terms
and provide a summary financial table and accompanying discussion.
Risk Factors, page 2
8. Please avoid the broad conclusion you reach in the narratives
and
subheadings to many of your risk factors that the risk would have
a
"material adverse effect" or an "adverse affect" or that the risk
would "adversely affect" or "harm" your business, operating
results
and financial condition. Instead, replace this, and other such
language, with specific disclosure of how your business, operating
results and financial condition would be affected. See, for
example,
risk factors six, seven, twelve, fourteen, eighteen and thirty-
one.
9. Risk factors one, nine, eleven, thirteen, seventeen, nineteen
and
twenty are generic and apply to all companies and therefore should
be
removed. In the alternative, specify in each risk factor the
particular material risk(s) that will result to the company and
investors in this offering should the risk(s) come to fruition.
10. Reconcile the disclosure in your second and fourth risk
factors
regarding your history of net losses and your significant reliance
on
external financing to fund operations with the information
appearing
on the home page of your website that you are "self-funding" and
"profitable."
11. Identify in risk factor five the small number of key
management,
operating employees and consultants that manage your
telecommunications business.
12. Revise risk factor 10 to address any known current, probable,
or
pending litigation brought against the company or its officers and
directors. In this regard, reference is made to Legal Matters on
page 43.
13. In risk factor 11, discuss the extent to which you have had
difficulties collecting payments from your customers. In this
regard, disclose the amount of your accounts receivable as of the
most recent date practicable. You should provide a more extensive
discussion of these challenges and the likelihood of collecting
your
receivables in your MD&A section.
14. Clarify in the subheading and narrative to risk factor 23 that
investors may have difficulty selling their shares due to the lack
of
an active and liquid public market for your shares.
15. To provide readers with a better understanding of the
magnitude
of the risk discussed in risk factor 26, revise to explain that
you
are registering for resale shares that constitute more than 100%
of
your shares currently outstanding on a fully diluted basis.
16. Risk factor 29 appears redundant in light of the disclosure in
risk factor 16. Please either consolidate these risk factors or
delete one of them. In the risk factor discussion that remains,
specifically address the dilution attributable to the issuance of
shares of common stock upon exercise of the stock purchase
warrants.
17. Elaborate on the areas of your internal controls that need
improvement as noted in risk factor 31.
Forward-Looking Statements, page 15
18. We note reference to forward looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E
of the Securities Exchange Act of 1934. Be advised that Section
27A(b)(1)(C) of the Securities Act and Section 21E(b)(1)(C) of the
Securities Exchange Act expressly state that the safe harbor for
forward looking statements does not apply to statements made by
companies that issue penny stock. Please either:
* delete any references to the Private Securities Litigation
Reform
Act; or
* make clear, each time you refer to the Litigation Reform Act,
that
the safe harbor does not apply to your company.
Use of Proceeds, page 16
19. Please revise to disclose how you used the proceeds from the
initial issuance of the shares of common stock being registered
for
resale. Also revise to more specifically identify the purposes
for
which you intend to use the proceeds from the exercise of warrants
and quantify the amount intended to be allocated to each purpose.
It
is not appropriate nor helpful disclosure to investors to
aggregate
those purposes under a generic category such as "working capital
and
general corporate purposes."
Management`s Discussion and Analysis or Results of Operation, page
17
20. The staff places great emphasis on the MD&A section and
directs
your attention to the Commission`s recent interpretative release
found at http://www.sec.gov/rules/interp/33-8350.htm. This
release
provides guidance designed to improve the quality, flow and
organization of MD&A. In an effort to facilitate these
objectives,
the Commission determined that inclusion of an "Executive
Overview"
section highlighting the matters with which management is
concerned
primarily in evaluating the company`s financial condition and
operating results would greatly facilitate investor understanding
of,
and appreciation for, a company`s financial condition. As such,
please consider including an "Executive Overview" section that
discusses the industry-wide factors that management views as most
relevant to the company. Discuss how the company generates
revenues
and sales and identify the primary services and product lines
offered. Furthermore, please provide insight into challenges,
risks,
uncertainties and opportunities which management is aware of and
discuss any actions being taken to address the same. This latter
point seems especially significant given the company`s recent
change
in business plan and merger and its expanding product offerings
and
services. For example, please specifically address how you intend
to
eliminate the uncertainty of your ability to continue as a going
concern.
Our Plan of Operation, page 18
21. The disclosure in this section largely repeats disclosure
found
in the Business section. Please revise to avoid duplication. In
doing so, please refer to Item 303(b) of Regulation S-B for a
discussion of what is required in this section.
22. You refer to yourself as a "leading regional added-value
carrier." Please substantiate this claim and clarify what you
mean
by "added-value."
23. You indicate that the company recently entered the VOIP
market,
purchased equipment necessary to begin providing VOIP services and
identified a partner with VOIP expertise to assist in planning and
implementation. Please update this disclosure to address your
current capacity to provide VOIP services, disclose the cost of
the
equipment purchased, whether it was purchased from a related
party,
provide the identity of the partner, and discuss the costs
associated
with the continued development of these services until you are
ready
to offer them to potential customers.
24. You discuss various milestones that the company intends to
complete. Please disclose the costs associated with each,
including
how you intend to pay for them, and the date for beginning and
completing each. In addition, please explain "next target
markets"
in the first milestone and "the Company`s national backbone" in
the
fourth.
Results of Operations, page 20
25. This section should address your results of operations,
material
changes therein, and reasons therefore for the following
comparable
periods: your fiscal year end 3/31/05 and 3/31/04; three months
ended 12/31/05 and 12/31/04; and nine months ended 12/31/05 and
12/31/04. Provide subheadings for each comparable period
discussed.
26. Elaborate on the reason(s) why the sales force was cut back
and
discuss your efforts to redirect to another market. Identify this
market and discuss.
27. Explain the reasons you describe consulting revenue for the
three
and nine month periods ended 12/31/04 as "non-recurring."
28. Explain the reason(s) why G&A expenses for the three months
ended
12/31/05 increased. You indicate that "most expenses have
decreased"
although it appears total expenses have increased. Clarify and
quantify this fact.
29. We note that cost of sales went up for the three months ended
12/31/05. Give the reduction in sales force and overall reduction
in
revenue during this period, please explain.
30. Provide a discussion of your net loss for the appropriate
periods
and the reasons therefore.
Liquidity and Capital Resources, page 20
31. Provide a discussion of all material notes payable, loans and
debts, including terms to maturity, principal amounts owed, any
amounts in arrears, interest rates and any other material terms.
By
way of illustration only, we note the disclosure in Notes 4 and 5
of
the financial statements. Quantify the total amount of your
indebtedness, highlighting the total amount overdue, and disclose
your debt service requirements for the next 12 months. Discuss
your
ability to satisfy your debt repayment obligations. Also file all
material obligations as exhibits to the registration statement.
32. All material contingent liabilities should be addressed. In
this
regard, we note the Liability for Stock to be Issued in Note 4 on
page 14 to the financial statements. We also note the legal
contingencies discussed in Note 10 to the financial statements on
page 19.
33. Please include a discussion of your critical accounting
estimates
(e.g. revenue recognition, stock compensation to employees and
non-
employees, etc.). Disclosures included in the Critical Accounting
Estimates section of the MD&A should provide greater insight into
the
quality and variability of information regarding financial
condition
and operating performance. Your revised disclosure should
supplement, not duplicate, the description of accounting policies
that are already disclosed in the notes to the financial
statements.
Your disclosure should discuss the judgments and uncertainties
that
affect the application of your critical accounting policies and
the
likelihood that materially different amounts could be reported
under
different conditions or using different assumptions. Please
revise.
34. Clarify what you mean by "factoring" customer receivables.
35. Your assertion that your "current cash resources will be
sufficient to sustain our current operations..." appears to
contradict the disclosure contained in your fourth risk factor
that
"you will need to raise additional capital to fund our anticipated
operating expenses and future expansion." Please revise to
clarify
your ability to satisfy your cash needs.
Business, page 21
36. Please provide the full business development of the company
and
its predecessors, Global Diversified Acquisition Corp., MailKey
Corporation and MK Secure Solutions Limited as required by Item
101(a) of Regulation S-B. Clarify who the control persons and
promoters for these entities are/were and disclose any material
relationships between these persons, the company, its
predecessors,
and affiliates thereof. This disclosure should also include a
discussion of the material terms of the March 25, 2004 and
November
9, 2004 merger agreements, including the form and amount of
consideration paid. File the merger agreements as exhibits.
37. Please explain what is a "messaging security and management
company."
38. Explain the business purpose for selling MK Secure Solutions
for
$1 to SS Khehar & Company.
39. Elaborate on the services that Kramerica will provide to the
company. Explain what a "personnel services corporation" does.
40. We note that ICCC provides the company with resold telecom
services in exchange for $100,000 per month. Explain "resold
telecom
services" and whether $100,000 per month is fair to you given the
non-arm`s length aspect of this relationship. Indicate how long
ICCC
has been providing these services generally and to the company
specifically. We note that ICCC filed for bankruptcy protection.
Update to discuss whether ICCC has emerged from bankruptcy.
Provide
Item 101(b)(5) disclosure and indicate the level of reliance the
company has on ICCC for resold telecom services. To the extent
such
reliance creates a material risk, provide appropriate risk factor
disclosure. File the services agreement(s) as an exhibit and
describe its material terms.
41. As required by Item 101(b) of Regulation S-B, please provide
disclosure on the following, to the extent applicable: principal
products, services and markets served (101(b)(1)); distribution
methods (101(b)(2)); competition (101(b)(4)); dependence on
customers
(101(b)(6)); patents, trademarks, etc. (101(b)(7)); need for
governmental approval (101(b)(8)); effect of existing or probable
governmental regulations (101)(b)(9)); and number of hours spent
on
R&D (101(b)(10)).
42. Please include your website address.
Engage in Strategic Acquisitions and Joint Ventures, page 25
43. You indicate that you intend to acquire "additional
telecommunication companies." This suggests you already have
acquired telecommunication companies and should therefore be
revised.
Please also discuss how you intend to finance your acquisition
strategy and whether you have any specific potential targets or
joint
venture partners in mind.
The Offering, page 26
44. This disclosure is redundant of other disclosure contained in
the
prospectus and should be removed. Similarly delete the Use of
Proceeds section appearing on page 26 and the Directors
Compensation
section on page 33.
Management, page 27
45. Given Mr. Zweig`s other business dealings, disclose whether he
will contribute full time to IElement`s business. If not,
indicate
the number of hours per week that he will contribute and include a
risk factor addressing the fact that Mr. Zweig, the company`s sole
officer and director, will not work full time.
46. Reference is made to your website where you list your
management
team, such as your chief technology officer and controller.
Please
consider whether these persons qualify as "significant employees"
and, if so, discuss them in accordance with Item 401(b) of
Regulation
S-B.
Executive Compensation, page 31
47. Item 402(b) requires you to provide the executive compensation
disclosure for each of the last three completed fiscal years, and
not
for calendar years. Please revise accordingly.
Employment Contracts, page 32
48. Clause 10 to Mr. Zweig`s employment agreement filed as exhibit
10.1 has been "intentionally omitted." Please refile the
agreement
with the omitted information or submit a confidential treatment
request pursuant to Rule 406.
Security Ownership of Certain Beneficial Owners and Management,
page
33
49. Reference is made to footnote 2. Contrary to this statement,
a
person is deemed to beneficially own securities if that person has
the right to acquire them within 60 days. See Rule 13d-3(d)(1).
As
a result, please recalculate your security holders` ownership
positions to include the common shares underlying the options,
warrants or any other convertible or exercisable instruments.
50. Based on 96,477,065 shares outstanding (or the number of
shares
outstanding as of the most recent date practicable), please
confirm
the beneficial ownership percentages for Messrs. Zweig, Brault and
Weger. Also revise the Selling Stockholders table on page 35 so
that
the ownership totals correspond with those in the Beneficial
Ownership table. For instance, the number of shares attributable
to
Mr. Brault differs in each table.
51. Please provide the address for Messrs. Brault and Weger. See
Item
403(a) of Regulation S-B.
Description of the Private Placement, page 34
52. You indicate that you are currently working to register and
issue
all 45,125,000 shares of common stock. We are unclear as to the
shares to which you are referring and what you mean by "working to
register and issue." Please clarify. We note similar disclosure
in
Note 4 to the financial statements on page 15 which refers to
59,469,286 shares that the company is working to register and
issue.
Selling Security Holders, page 35
53. The selling shareholder table only includes the 82,212,048
shares
of common stock already outstanding. It does not include the
30,488,281 shares underlying the warrants. These shares and the
corresponding information required by Item 507 of Regulation S-B
must
be provided in the table.
54. Disclose the natural person(s) who exercise the voting and/or
dispositive powers with respect to the securities to be offered
for
resale by all selling shareholders who are not natural persons,
such
as AK Asset Management and Palladian Capital Advisors.
55. Please tell us in your response letter whether Vista Capital
is a
broker-dealers or an affiliate of broker-dealers. In this regard,
our records indicate that a Vista Capital, LLC, is a broker-
dealer.
We may have further comment.
56. It appears that Susan Walton, Tim Dean-Smith, Isaac de la Pena
and Vista Capital have all had a material relationship with the
company that should be disclosed in footnotes. See Item 507 of
Regulation S-B and revise accordingly.
57. Briefly discuss the rules and limitations imposed by
Regulation
M.
Where You Can Find More Information, page 43
58. Please revise to refer to the SEC`s new address at 100 F
Street,
NE, Washington, DC 20549.
Financial Statements
Condensed Consolidated Balance Sheet, page 1
59. We note your history of recurring losses, negative working
capital, declining revenues and margins. Please tell us how you
determined that your goodwill balance was not impaired at March 31
and December 31, 2005. In addition, disclose your accounting
policy
for goodwill impairment testing in the notes to the financial
statements.
60. We note on page 32 that you are 6 months behind on promissory
notes issued to Mr. Zweig. Please tell us whether this
constitutes a
default pursuant to the terms of the notes and also tell us how
these
notes are classified on the balance sheet, including your basis
for
the classification.
Consolidated Statements of Operations, page F-3
61. If the captions "cost of sales" and "gross profit" exclude
depreciation and amortization for property and equipment directly
attributed to the generation of revenue, we believe that this
presentation inappropriately reports a figure for income before
depreciation and amortization. As required by SAB 11:B, revise
your
presentation to either reclassify the applicable depreciation to
"cost of sales" or remove the caption "gross margin" and indicate
the
amount of applicable depreciation that is excluded from "cost of
sales."
Consolidated Statement of Changes in Stockholders` Equity
(Deficit),
page F-4
62. For periods prior to the merger, retroactively restate the
equity
section of the balance sheet, the statement of stockholders`
equity
and earnings per share of the legal target/accounting acquirer to
reflect the exchange ratio established in the merger agreement.
With
respect to the exchange ratio, the ratio of the number of shares
issued by the legal acquirer in exchange for the number of shares
of
the legal target/accounting acquirer. It is also unclear to us
how
you have determined the weighted average number of shares
outstanding
for EPS for the years presented. Please revise or advise.
Consolidated Statement of Cash Flow, page F-8
63. Please tell us why you classify the "acquisition of fixed
assets
in business combination," "debt and accrued interest assumed in
business combination," and "goodwill" in the operating section of
the
cash flow statement. Further, if these are non-cash items, they
should be presented as non-cash investing and financing
activities.
Note 1 - Organization and Basis of Presentation, page F-12
64. Please disclose the interest rate on the promissory notes
issued
to Kramerica. Disclose why the notes were issued and the related
accounting for the issuance.
Note 2 - Summary of Significant Accounting Policies
Revenue and Cost Recognition, page F-13
65. Please expand upon your revenue recognition policy by
including
references to the requirements of SAB 104. Also, discuss the
nature
of your revenues.
Loss Per Share of Common Stock, page F-16
66. We note your statement that "the Company had no options or
warrants outstanding during the period." We refer to the
issuances
of options and warrants listed in the Consolidated Statement of
Stockholder`s Equity (Deficit). Please advise or revise.
Stock-Based Compensation, page F-18
67. We note your statement that stock-based compensation for the
three-months ended March 31, 2005 was $0. However, your
consolidated
statements of cash flows on page F-8 indicates stock compensation
of
$187,189. Please advise or revise.
Note 4 - Notes Payable, page F-23
68. Please disclose how you account for the zero interest notes
payable.
69. We note the numerous conversions of notes payable to equity.
Tell us whether your notes contain embedded conversion features.
Condensed Consolidated Financial Statements for the three months
ended December 31, 2005
70. Please comply with the above comments as applicable.
Note 4. Liability for Stock To Be Issued, page 15
71. Please tell us how you accounted for the warrants issued to
Vista
Capital.
72. If registration rights agreements exist for these warrants or
any
other warrants, please file them as exhibits. Further, tell us if
your registration rights agreements require you to file a
registration statement that is declared effective by the SEC and
to
keep the registration statement continuously effective for a
preset
time period, otherwise you would be required to pay a liquidated
damages payment. Similarly, tell us if you will incur these
liquidated damages if your common stock is not listed or quoted,
or
is suspended from trading for any period. We note the EITF
recently
deliberated the impact of these liquidated damages clauses and the
effect on the accounting and classification of instruments subject
to
the scope of EITF 00-19 in EITF 05-4 The Effect of a Liquidated
Damages Clause on a Freestanding Financial Instrument Subject to
Issue No. 00-19. The EITF has not reached a consensus on this
issue
and has deferred deliberation until the FASB addresses certain
questions which could impact a conclusion on this issue. However,
in
the meantime, please tell us how you considered the guidance in
EITF
05-4 and the different views on this issue as outlined in Issue
Summary No. 1 to EITF 05-4 in analyzing whether each registration
rights agreement and the warrants to which each pertains should be
considered as a combined freestanding instrument or as separate
freestanding instruments.
73. If no registration rights agreements exist for your warrants,
please provide us with your analysis of EITF 00-19 for the
warrants.
Part II
Item 26. Recent Sales of Unregistered Securities
74. All unregistered transactions for the past three years should
be
included in this section and you should briefly discuss the facts
supporting, and the basis for, the corresponding exemption from
registration. See Item 701 of Regulation S-B. Also ensure that
you
disclose the dates of each issuance and identify the persons or
class
of persons to whom you issued the shares.
75. You have booked a liability for shares to be issued as of
December 31, 2005. Please update as to the status of these, and
all
other, privately issued shares.
Item 27. Exhibits
76. The legality opinion opines upon shares to be issued by the
company in a best efforts offering. Please provide a revised
opinion
with your next amendment that actually relates to this offering.
77. We note your reference to your operating leases in Note 5 to
the
financial statements. We remind you to file the operating leases,
if
material, and any other material contracts as exhibits to the
registration statement pursuant to Item 601(b)(10) of Regulation
S-B.
Also file the warrant agreements, your articles of incorporation,
as
amended, and bylaws as exhibits. See Item 601 of Regulation S-B.
78. Please include a list of subsidiaries as required by Item
601(b)(21) of Regulation S-B. In addition, clarify your corporate
structure in the Business section of the prospectus.
Item 28. Undertakings
79. In your amended filing, please revise to include the new
undertakings that became effective on December 1, 2005. See
Questions 3 through 6 in Securities Offering Reform Transition
Questions and Answers, which is available on our web site at
http://www.sec.gov/divisions/corpfin/transitionfaq.htm. See new
Item
512(a)(4) and 512(g) of Regulation S-B, which were adopted in
Securities Offering Reform, Release No. 33-8591 (July 19, 2005),
which is available on our web site at
http://www.sec.gov/rules/final/33-8591fr.pdf.
Signatures
80. Please have your principal accounting officer sign in that
capacity. In addition, please note that Mr. Zweig must sign the
registration twice according to Form SB-2: once on behalf of the
registrant and again in the capacity of your executive officers
and
the sole member of your board of directors.
Form 10-KSB for the year ended March 31, 2005
Forms 10-QSB for the quarters ended June 30, September 30 and
December 31, 2005
81. Please be advised that the Rule 13a-15 certifications must be
in
the exact form and include the exact disclosure as specified by
Item
601(b)(31) of Regulation S-B. We note that your certifications:
(1)
omit certain required language (e.g., in paragraph 5, the term "of
internal controls over financial reporting" is omitted, in sub-
paragraph (a) of paragraph 5, the terms "material weaknesses,"
"internal controls over financial reporting" and "reasonably
likely
to" are omitted); (2) contain mistakes (e.g., references to "the
registrant" should be made to "the small business issuer,"
paragraph
4 refers to the wrong rules for the definition of "disclosure
controls and procedures," subparagraph (b) of paragraph 4 should
be
made as of the end of the period covered by the report rather than
within 90 days prior to the filing date of the report, and
subparagraph (c) of paragraph 4 should read "as of the end of the
period covered by this report based on such evaluation" and not
"as
of the Evaluation Date"); and (3) include unnecessary language.
These are examples only. Please amend your Form 10-KSB for the
year
ended March 31, 2005 and all subsequently filed Forms 10-QSB to
include the revised certifications. Please note that when you
correct your certifications, you will have to re-file your Forms
10-
KSB and 10-QSB in their entirety.
*******
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 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 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 Michael Henderson, Staff Accountant, at
(202)
551-3364 or Kyle Moffatt, Accountant Branch Chief, at (202) 551-
3836
if you have questions regarding comments on the financial
statements
and related matters. Please contact William Bennett at (202) 551-
3389 or me at (202) 551-3810 with any other questions.
Sincerely,
Michele M. Anderson
Legal Branch Chief
cc: Laura Anthony, Esq.
Fax: (561) 514-0832
Mr. Ivan Zweig
IElement Corporation
March 3, 2006
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