MAIL STOP 7010
May 24, 2006
Charles G. Masters
Chief Executive Officer
Cytation Corp.
4902 Eisenhower Blvd., Suite 185
Tampa, FL 33634
RE: Cytation Corporation
Information Statement on Schedule 14C
Filed May 9, 2006
File No. 0-05388
Dear Mr. Masters:
We have reviewed your amended filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments. 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.
Change in Control and Acquisition
Series A Preferred Stock Offering and Debt Financing
1. Your disclosure indicating that you have sold an additional
$2,253,480 (or 172,848 shares) of Series A Preferred Stock since
January 18, 2006 is not consistent with the disclosures presented
elsewhere throughout your filing. Please revise to ensure
consistency.
Capital Structure
2. We have reviewed your response to comment 8. You disclose that
"because the date that our registration statement is filed is
solely
within our control, we do not believe that we are required to book
such securities as debt under EITF 00-19..." Please remove this
disclosure from your filing, since the effectiveness and not the
filing of your registration statement is one of the conditions
that
triggers the conversion option of your preferred stock. The
effectiveness of your registration statement is not within your
control. In addition, it is unclear why you would rely on the act
of
filing the registration statement during your EITF 00-19 analysis,
given your assertion that the shares do not have to be registered.
Please confirm, if true, that the shares do not have to be
registered, and add disclosure to the terms of each warrant and
convertible preferred share issuance that you are permitted to
settle
in unregistered shares.
3. You disclose "no Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, or Series C Preferred Stock is
convertible..." We assume the second reference to Series C
Preferred
Stock should be Series D Preferred Stock. Please revise or
advise.
4. Please tell us whether your convertible preferred stock has any
nondetachable conversion features that would be deemed to be
beneficial. Provide us with detailed computations which support
your
conclusion. Paragraph 5 of EITF 98-5 states that beneficial
conversion features are calculated at the commitment date as the
difference between the conversion price and the fair value of the
common stock, multiplied by the number of shares into which the
security is convertible. Note, however, that paragraph 5 of EITF
00-
27 states that the effective conversion price, instead of the
specified conversion price, should be used to compute the
intrinsic
value of the beneficial conversion feature. See paragraphs 6-7 of
EITF 00-27 for an example on how to perform this calculation.
Options and Warrants Convertible into Common Shares
5. Regarding your table that discloses the assumptions used in
calculating the fair value of the warrants, it is unclear how the
number of warrants for Class C, D, BD-1, BD-2, and BD-3 agree to
your
disclosures. For example, the table indicates you have 4,970,824
Class B warrants, but you disclose that as of April 18, 2006 there
were 970,827 warrants outstanding. Please revise or advise.
6. You present the total fair value of all warrants as $1,025,103.
Given the values of the warrants for Class A, B and D are each
separately higher than $1,025,103, the total fair value does not
appear to be accurate. Please revise.
7. Please help us understand why you have not disclosed the
assumptions used to value your Class E, BD-4 and BD-5 warrants.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
8. We have reviewed your response to comment 11. Please revise
your
disclosure to reflect that you made distributions to shareholders
in
the amount of $1,670,540 in 2005 and $52,618 in 2004, if true.
Exhibit 99.1
Cytation Corporation Financial Statements
General
9. Please include interim financial statements for the period
ended
March 31, 2006. Please similarly update your financial
information
throughout the filing. See Rule 3-12 of Regulation S-X.
Statements of Changes in Stockholders` Deficit, page F-5
10. We have reviewed your response to comment 15. It does not
appear
that you have retroactively reflected your 2-for-1 stock dividend
declared on November 14, 2005 throughout your filing. For
instance,
except for the quarter ended on December 31, 2005, you present
pre-
stock dividend share prices for the quarters ended in 2004 and
2005
under "Market Price of and Dividends on the Registrant`s Common
Equity and Other Shareholder Matters." Also, in the subsequent
events footnote in Exhibit 99.1, you disclose that you "issued
5,000
(pre-split) restricted shares of its common stock to Foley Hoag
LLP..." Please revise these disclosures and ensure that your
disclosures throughout the filing reflect the retroactive
treatment.
Also, please tell us if your stock dividend included your
preferred
stock and how you adjusted the conversion rates accordingly.
Exhibit 99.3
Deer Valley Homebuilders Financial Statements
Note 12 - Subsequent Events, page 14
11. We have reviewed your response to comment 21. Your disclosure
in
this footnote still states that you issued 7,456,215 shares of
Series
A preferred stock, rather than 745,622 shares. Please revise.
Exhibit 99.4
Pro Forma Consolidated Statements of Operations
12. We have reviewed your response to comment 28. It does not
appear
that you have included the amortization of the discounts from the
face value of the preferred stock resulting from the allocation of
a
portion of the proceeds to the warrants and any beneficial
conversion
feature in arriving at net income applicable to common
shareholders.
Issue 6 of EITF 00-27 states that discounts should be amortized
from
the date of issuance to the earliest conversion date.
13. We have reviewed your response to comment 29. It appears that
you are still including approximately 7.6 million shares of Deer
Valley Acquisitions Corp. common stock in your diluted earnings
per
share computation presented in footnote (3). Please advise as to
why
you believe the inclusion of these shares is appropriate, or
revise.
Closing Comments
Please contact Craig Slivka, Staff Attorney, at (202) 551-
3729
or in his absence Chris Edwards, Special Counsel, at (202) 551-
3742
with any questions.
Sincerely,
Pamela A. Long
Assistant Director
cc: Brent A. Jones, Esq.
(813) 223-9620
Charles G. Masters
Cytation Corp.
Page 1 of 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE