Mail Stop 0408
February 10, 2006
Mr. Li Fu
Chairman and President
Parallel Technologies, Inc.
558 Lime Rock Road
Lakeville, Connecticut 06039
Re: Parallel Technologies, Inc.
Form SB-2
File No. 333-131052
Filed January 13, 2006
Dear Mr. Fu:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your documents 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.
Form 8-K Filed December 14, 2005
1. Please amend your Form 8-K to include pro-forma financial
statements to reflect your business combination required by
Article
11(a) (2) or please tell us why pro-forma financial statements are
not
required.
Form SB-2 Filed January 13, 2006
General
2. Please update your disclosure to account for the reverse stock
split, automatic conversion, any exercise of warrants and change
of
name that you represented would occur before the end of January.
Front Cover Page of Prospectus
3. Please comply with Item 501(a) (5) by highlighting the cross-
reference to the risk factors section.
Cautionary Note regarding Forward-Looking Statements, page 2
4. As a penny stock issuer, you do not qualify for the safe
harbor.
Please revise.
Recent Developments, page 3
5. Please revise this section as follows:
* revise your discussion, on page 4, of your purchase of
substantially all the assets of Dalian Fushi to disclose the
consideration that you paid (in U.S. dollars); and
* provide more detail, on page 5, regarding the sale of stock
warrants
and rights to purchase additional common stock including the price
per
unit, the exercise price of the warrant and the nature of the
"rights
to additional issuances of common stock.
Acquisition of Business of Dalian Fushi, page 12
6. Please clarify the extent to which you have acquired the assets
and
business of Dalian Fushi and the extent to which Dalian Fushi is
still
operating. For example, please revise the following:
* explain, on page 13, how you have "the ability to control Dalian
Fushi and any of its remaining assets and operations" given the
fact
that Dalian Fushi owns a majority of your stock; and
* reconcile your statements on pages 13 and 15 that you "commenced
operation of the business conducted previously by Dalian Fushi"
with
your statement on page 15 that "Dalian Fushi will continue to be
the
contracting party under its customer contracts, bank loans and
certain
other assets."
Restructuring Agreements, page 15
7. Please revise this section as follows:
* disclose, on page 16 and elsewhere in the document, any amounts
in
U.S. dollars instead of in the Chinese Yuan; and
* disclose, on page 17, the amount of cash required to exercise
the
option.
Risk Factors, page 21
8. Some of your risk factors state that you can give no assurance
of a
given outcome when the risk is not your inability to give
assurance,
but the underlying situation. Please revise to eliminate this and
similar language.
Security Ownership, page 82
9. For each entity that is not a public company or a registered
investment advisor, please indicate the natural person who is the
control person.
Executive Compensation, page 89
10. Please disclose the warrants awarded to Mr. Little under the
consulting agreement, pursuant to Item 402(b) (2) (v) (A) (1).
Certain Relationships and Related Transactions, page 91
11. Please revise this section to comply with Item 404(a) as
follows:
* disclose the relationship of Kuhn Brothers Inc to you;
* disclose the nature of the persons interest in the transaction;
and
* disclose the aggregate amount paid to Kuhn Brothers in the
transaction.
12. Please briefly discuss your agreements with Chinamerica
regarding
the selection of your directors and executive officers.
Recent Sales of Unregistered Securities, page II-2
13. With respect to the issuance of the series A convertible
preferred
stock and the issuance of the Series B convertible preferred stock
and
warrants, we note that you have failed to comply with the
requirements
of Item 503 for each offering by failing to file with the
Commission
five copies of a notice on Form D no later than 15 days after the
first sale of securities in reliance upon Item 506. Please file
the
Forms immediately and explain to us the reasons for your failure
to
comply.
14. Please disclose the total amount of commissions paid to Kuhn
Brothers Securities as required by Item 701(c).
Exhibits
15. Please file the opinion regarding the legality of the common
stock
being registered.
Financial Statements
16. Please revise to include the audited financial statements of
Parallel Technologies for the years ended December 31, 2004 and
2003,
as well as the unaudited interim financial statements for the nine
months ended September 30, 2005, or tell us why these financial
statements are not included.
Dalian Fushi Bimetallic Manufacturing Company Limited - Financial
Statements
17. Please note the updating requirements of Rule 3-12 of
Regulation
S-X.
Statements of Operations for the years ended December 31, 2004,
and
2003, page F-4
18. Please describe the capital structure of Dalian Fushi by
explaining what equity units are outstanding and what the rights
are
for each equity unit.
19. Please tell us why the Statements of Operations do not include
earnings per share.
Statements of Changes in Shareholder`s Equity for the years ended
December 31, 2004, and 2003, page F-5
20. We note on page F-8, the functional currency of Dalian Fushi
is
the Chinese Renminbi and transactions denominated in currencies
other
than RMB are translated into United States Dollars with the
adjustment
recorded in the statements of operations and stockholder`s equity
as
other comprehensive income (loss). Please tell us why there was
not a
foreign currency translation adjustment recorded and presented for
the
year ended December 31, 2004.
Note 1 - Summary of Significant Accounting Policies and
Organization,
page F-7
21. We note you recognize revenue upon delivery or shipment of the
products. Please tell us who determines when to recognize the
revenue
and why there is a need to recognize revenue at these two
different
points.
Note 6 - Intangible Assets, page F-11
22. We note your intangible assets are related to two registered
patent rights acquired from third parties. Please tell us the
consideration given to acquire the two registered patents and how
you
determined the value of these patents.
* * * * * * * * * * * * *
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 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.
In connection with responding to our comments, please
provide, in
writing, a statement from the company and each filing person
acknowledging that:
* the company or filing person is responsible for the adequacy and
accuracy of the disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company or filing person may not assert staff comments 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 our review of your filing or in response
to
our comments on your filing.
You may contact Matthew F. Komar at (202) 551-3781 or Joyce
A.
Sweeney at (202) 551-3449 if you have questions regarding comments
on
the financial statements and related matters. Please contact
either
Jonathan E. Gottlieb at (202) 551-3416 or me at (202) 551-3448
with
any other questions.
Sincerely,
Mark Webb
Legal Branch Chief
cc. Darren Ofsink, Esquire
Guzov Ofsink, LLC
600 Madison Avenue
14th Floor
New York, New York 10022
Mr. Li Fu
Parallel Technologies, Inc.
February 10, 2006
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