Mail Stop 3561
July 19, 2006
Charles Sander, President
Catcher Holdings, Inc.
39526 Charlestown Pike
Hamilton, VA 20158-3322
RE: Catcher Holdings, Inc. ("the company")
Amendment No. 1 to Registration Statement
on Form SB-2
Filed June 16, 2006
File No. 333-133579
Dear Mr. Sander:
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. 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.
Prospectus Summary, page 1
1. If true, please indicate in the "Overview" section that
commercial
sales of the CATCHER device have not commenced and additional
authorizations are needed before those sales may begin.
Risk Factors, page 9
1. We note your disclosure of issuances of securities that are in
violation of Section 5 under the Securities Act of 1933.
Accordingly, it appears that these financial instruments may be
redeemable at the option of the holder. Please tell us why these
financial instruments are not presented separately from
stockholders`
equity. Please refer to the guidance in ASR 268 and Section I.A.
of
the Division of Corporation Finance: Frequently Requested
Accounting
and Financial Reporting Interpretations and Guidance, available on
our website. Also, please make the appropriate disclosure in MD&A
and the footnotes to discuss the matter.
Management`s Discussion and Analysis . . . ., page 16
2. Please explain the basis for the statement under "Results of
Operations - Comparison of the three months ended March 31, 2006
and
2005 (unaudited)" that you "expect to begin full scale production
during the second quarter of 2006." In this regard, the business
section refers to the need for additional authorizations and
possible
delays in commercial sales if those authorizations are not
obtained.
Company Overview, page 26
3. The second paragraph indicates that additional authorizations
"may
be required" for initial and future production units and those
authorizations may be delayed, which in turn could delay sales of
units. Later in this section, please explain the additional
authorizations that may be required and the time frame and cost to
obtain them. Please revise your MD&A section to explain the
possible
ramifications to the company from delays in obtaining such
equipment
authorizations and the resulting delay in the commencement of
sales
of the units. Further, please add a risk factor on this matter or
tell us why a risk factor is not appropriate.
Intellectual Property, page 28
4. We note that the Non-Final Action had a response due date of
June
21, 2006. Since that date has passed, please update to reflect
the
status of this Action.
5. We note Mr. Tabankin`s signing over the provisional patent in
March, 2006 and that the company has 12 months to complete a full
patent filing to back up this provisional application. Please
disclose the status of the full patent filing. If the filing has
not
occurred, please disclose the plans to file such patent.
Financials Statements
Consolidated Statement of Operations, F-5
6. We have read your response to comment 26 noting the provisional
patent and trade name that were being utilized by LCM were
transferred by Ira Tabankin to Catcher, Inc. at the formation for
an
equity interest in the new entity. This intellectual property
appears to have been recorded at fair value and expensed as
"acquired
research and development". Your response indicates that Ira
Tabankin
was the sole shareholder of LCM and has obtained a 36% equity
interest in the new entity, Catcher, Inc. as well as the only
board
position and is one of two members of management. Considering the
ownership by Ira Tabankin in LCM and Catcher, Inc. and his
continued
involvement in the operations of Catcher, Inc., it appears that
the
intellectual property transferred to Catcher, Inc should be
recorded
at the predecessor value which is zero. Please revise.
Notes to Consolidated Financial Statements
Note 3 - Asset Purchase, F-14
7. We have read your response to comment 27 noting that you have
considered the transaction between LCM and Catcher, Inc. as a
business combination accounted for as a reverse acquisition under
SFAS 141. We also note you cited paragraph (17) of SFAS 141 as
guidance to support LCM as the accounting acquirer. Considering
there was no exchange of equity interests, it is not clear how you
determined paragraph (17) is applicable. Conversely, it would
appear
Catcher, Inc. is the accounting acquirer (consistent with
paragraph
(16) of SFAS 141) as they assumed the $836,000 of outstanding
liabilities. Accordingly, the historical financial statements
presented should not be that of LCM, but of Catcher, Inc. Please
revise.
8. We also noted your response to comment 27, indicating that you
believe EITF 98-3 supports your position that the LCM asset
purchase
would qualify as a business. The example you cited (specifically,
example 4 scenario 5) provides an example situation in which the
development activities have progressed into a successful beta
version
of the product, there has been the achievement of a successful
production run, and they are in the process of shipping the
product
to the customers. Your circumstances are somewhat different; in
the
second sentence under the section "Revenue" on page 18 of your
registration statement, the initial prototype of the "Catcher"
product was completed in August 2005 (four months after the LCM
transaction). Further, you only recently received orders in the
first part of 2006 and production has not begun. It is our
position
that if the assets transferred (or asset set) is in the
development
stage and has not commenced planned principal operations, the set
is
presumed not to be a business. Accordingly, the transaction
appears
to be a purchase or transfer of assets between related parties
(with
no step up in basis) and not the acquisition of a business under
the
guidance of EITF 98-3. Please revise accordingly.
Part II.
Other Exchange Act Filings
9. Please revise your Forms 10-KSB for the year ended December 31,
2005 and 10-QSB for the quarterly period ended March 31, 2006
(filed
April 26, 2006) and any other applicable filings to comply with
the
comments above.
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
provide 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.
Please contact Angela Halac at (202) 551-3398 with any accounting
related questions, and Janice McGuirk at (202) 551-3395 with any
other questions.
Sincerely,
John Reynolds
Assistant Director
cc: Jeremy D. Glaser, Esq.
via fax (858) 720-5125
Charles Sander
Catcher Holdings, Inc.
July 19, 2006
Page 1