Mail Stop 6010
October 11, 2006
David Duquette
President
New Century Companies, Inc.
9835 Santa Fe Springs Road
Santa Fe Springs, CA 90670
Re: New Century Companies, Inc.
Registration Statement on Form SB-2
Filed September 18, 2006
File No. 333-137412
Dear Mr. Duquette:
We have limited our review of your filing to those issues we
have addressed in our 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.
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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. Given the nature and size of the transaction being registered,
advise the staff of the company`s basis for determining that the
transaction is appropriately characterized as a transaction that
is
eligible to be made on a shelf basis under Rule 415(a)(1)(i) of
the
Securities Act.
Registration Statement Fee Table
2. We note from footnote 4 to Schedule I to your response letter
dated September 18, 2006 that you calculated the 1,627,512 shares
underlying interest in the amount of $589,322 by dividing that
interest amount by the interest conversion rate of $0.3621. We
note,
however, from your disclosure at the end of the second paragraph
under "CAMOFI Private Placement" on page 3 of your registration
statement that payment of interest on the note with your shares of
common stock can only occur if, among other things, the closing
price
of your common stock is at least 115% of the conversion price of
the
CAMOFI Note, which is fixed at $0.63. As such, please tell us how
you determined an interest conversion rate of $0.3621. Also,
given
that the principal amount of the note is $3,500,000, that the note
was issued on February 28, 2006 and accrues interest at the rate
of
12%, please show us how you calculated the $589,322 in interest.
3. We also note from Schedule I to your response letter dated
September 18, 2006 that you are registering an additional 406,878
shares of common stock, in accordance with your registration
rights
agreement, representing an additional 25% of the shares that may
be
issuable upon the conversion of the principal of the note and the
payment of interest accrued thereon. It is not clear from your
response, however, why compliance with the contractual obligations
under your registration rights agreement provides a basis for a
reasonable good faith estimate of the number of shares of common
stock that will be issuable upon the conversion of the principal
of
the note and the payment of interest accrued thereon in the form
of
your common stock. Please revise your registration statement to
register an amount of shares based on such reasonable good faith
estimate. In addition, please provide support in your response
letter for such number, including the specific calculations you
performed and the justification for any assumptions you relied
upon
in making such calculations. For example, with respect to the
shares
issuable upon payment of the interest accrued on the note, please
tell us your justification, such as recent stock price history and
volatility, for the market price used in the calculation of the
number of shares that may be issued for the payment of interest.
Also, please explain why you need to register additional shares
for
the conversion of the principal amount of the note when the
conversion price appears to be fixed.
4. We note your response to prior comment 5 as well as footnote 3
to
Schedule I to your response letter dated September 18, 2006.
Please
provide the disclosure required by Item 701 of Regulation S-B with
respect to the 75,000 shares issued to Motivated Minds as
consideration for extending the due date of the note.
5. We note your response to comment 3 of our letter dated August
24,
2006. Please expand your response to that comment to include a
discussion of the effects the provisions of Section 4(d) of the
note,
filed as Exhibit 10.6 to your registration statement, have on the
investor`s discretion as to whether to receive shares as an
interest
payment. If the investor does have discretion, by refusing to
sell
shares to come under contractual ownership caps or otherwise, the
private placement of the shares related to interest is not yet
complete and it is premature to register those shares for resale.
Motivated Minds Bridge Loan, page 2
6. Please indicate the new maturity date of the note.
* * * * *
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.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment 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 staff comments and the declaration of
effectiveness as a 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 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 Tim Buchmiller at (202) 551-3635 or me at
(202)
551-3444 with any other questions.
Sincerely,
Perry Hindin
Special Counsel
cc: Marc Ross, Esq. (via fax)
Marcelle S. Balcombe, Esq. (via fax)
David Duquette
New Century Companies, Inc.
October 11, 2006
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