MAIL STOP 3561
January 13, 2006
J. Patrick Michaels, Jr., Chairman
CEA Acquisition Corporation
101 East Kennedy Boulevard, Ste. 3300
Tampa, Florida 33602
Re: CEA Acquisition Corporation
Amendment No. 2 to Registration Statement on
Form S-4
Filed January 9, 2006
File No. 333-129314
Dear Mr. Michaels,
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.
Questions and Answers about the Proposal, page 8
1. We note your response to prior comment two of our letter dated
December 28, 2005 and the additional disclosure that either
etrials
or CEA has the "option" to terminate the merger. The additional
disclosure does not appear consistent with the terms of the merger
agreement. The terms on pages A-48 and A-49 discuss the five
percent
appraisal limit as a condition upon which the merger is subject
to.
Please revise your disclosure accordingly or advise.
Merger Consideration, page 70
2. We note your response to prior comment eight. It is not clear
how
the exercise of existing warrants and options would benefit all
current etrials` shareholders to the extent that an inducement
would
be necessary to affect such exercises. Please revise to discuss
the
purpose for providing an inducement to the current warrant and
option
holders at the expense of etrials` shareholders who do not own any
similar securities.
Also, please revise to disclose the ratio on which etrials` shares
would be exchanged for CEA`s shares assuming no exercise of any
warrants or options so that the minority shareholders of etrials
can
better understand the merger consideration they will receive.
Expected Effects of Merger on Business of etrials, page 105
3. We note your response to prior comment 11. We also note that
before etrials was introduced to EarlyBird Capital, it was already
contemplating a merger with a special purpose acquisition company
in
order to obtain additional funds. It would appear that etrials
was
aware of its plan to acquire additional capital. Also,
considering
the investors of CEA will be making an investment decision in
deciding whether or not to vote for the transaction, the
disclosure
of etrials intended use of the trust proceeds should be discussed
in
detail. If possible, please revise to provide similar detail to
that
which would be required by Item 504 of Regulation S-K.
The etrials Business, page 106
4. We note your response to prior comment 14. We also note the
additional disclosure that as part of the license agreement with
MiniDoc you agreed to assume the liability related to "past
infringement of a later technology." The response letter
indicates
that property rights you acquired "do not directly relate" to the
patent infringement suit. As such, please revise to clarify which
technology is used to base the royalty payments to PHT.
5. The disclosure on page 151 states that prior to executing the
license agreement that etrials used the MiniDoc Diary Software
pursuant to oral agreements. We note that you have not received
any
revenue from sales of the diaries in 2005. Please revise to
clarify
if the agreement entered into in August 2005 relates to the same
software as those which were subject to the oral agreements. If
so,
please revise to explain the purpose of entering into the
agreement
and assuming the liability relating to the PHT technology if you
no
longer sell the technology related to the diaries. If any current
officers, directors, or signing shareholders have an interest in
MiniDoc, please revise to highlight such interest. Also, disclose
any other material terms of the license agreement. For instance,
the
duration of the agreement and the royalty structure would appear
to
be material terms that are not disclosed.
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 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.
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 Angela Halac (202) 551-3398 if you have
questions regarding comments on the financial statements and
related
matters. Questions on other disclosure issues may be directed to
Duc
Dang at (202) 551-3386.
Sincerely,
John Reynolds
Assistant Director
Cc: David Miller
Fax # 212-818-8881
J. Patrick Michaels, Jr., Chairman
CEA Acquisition Corporation
January 13, 2006
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