April 5, 2007
Mail Stop 4561
David Gallagher
Political Calls, Inc.
1015 S. Cimarron
Las Vegas, NV 89145
Re: Political Calls, Inc.
Amendment No. 1 to Registration Statement on Form SB-2
Filed March 28, 2007
Registration No. 333-140823
Dear Mr. Gallagher:
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
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.
Cover Page
1. Please revise to limit the outside front cover page of the
prospectus to one page. In this connection, please delete
reference
to your revenues and your statement regarding your focus from the
cover page. Further, please revise to highlight in a manner other
than all capitals the cross reference to the risk factors.
The offering, page 5
2. Please revise to complete the penultimate sentence.
Revenues, page 19
3. We note your response to comment eight. Please confirm to us
that
none of these nine customers were affiliates, including Mr.
DeStefano.
Liquidity and Capital Resources, page 20
4. We note your response to comment 10. However, the revised
disclosure still does not clarify whether you will need to raise
additional capital in the next 12 months. We refer specifically
to
the phrase "with the need to raise additional capital." Please
revise to state "without the need to raise additional capital" or,
if
that was not the intended disclosure, please include more detailed
disclosure regarding your need to raise additional capital.
Selling Shareholders, page 28
5. We note your response to comment 14. However, we do not see
the
corresponding changes to the disclosure. For each of your six
preferred shareholders, the second column indicates they are
offering
all of their shares, but the third and fourth columns indicate
that
no shares will be sold in the offering.
Preferred Convertible Securities, page 35
6. We note your response to prior comment 15 and reissue our
comment.
Please help us to understand how you considered the guidance in
EITF
98-5 and 00-27 in determining the appropriate accounting for your
preferred stock issuance. Specifically, 612,000 shares of common
stock were issued during 2006 for $6,120 or one penny per share.
During April 2006, you issued 750,000 convertible preferred shares
for one penny per share but since these preferred shares can each
be
converted into 200 shares of common stock (each of which had a
value
of one-penny per share based upon the most recent offering), it
appears that there is an beneficial conversion feature of
approximately $1,492,500 (a benefit of $1.99 for each share of
convertible preferred stock when converted into common stock)
which
would require accounting treatment under the guidance referred to
above. Please advise or restate your financial statements in an
amended filing on Form SB-2.
Financial Statements
Revenue Recognition, page 9
7. We note your response to prior comment 18 and your disclosure
that
you recognize revenue on the "completed contract basis". It
appears
from your disclosure that you defer revenues and costs until such
point that you complete contracted phone campaigns. Please tell
us
your basis in GAAP for this revenue recognition policy keeping in
mind that most service contracts do not fall within the scope of
SOP
81-1. In your response, please address any consideration you have
given to adopting a proportional performance model for recognizing
revenue and for expensing costs as incurred. Reference is made to
SAB 104.
Undertakings
8. We note your response to comment 20. Rule 430A relates to the
omission of certain information from the prospectus at the time of
effectiveness. Please advise us what information you are omitting
from the prospectus in reliance on Rule 430A. If you are not
relying
on Rule 430A, please remove this undertaking.
9. We note your response to comment 21. However, the disclosure
provided is the undertaking in Item 512(g)(2) of Regulation S-K.
Please remove this undertaking and instead include the undertaking
provided in Item 512(g)(2) of Regulation S-B.
Legal Opinion
10. We note your response to comment 22. However, the second
opinion
is still drafted as if none of the shares have been issued or sold
by
the company. Please direct counsel to revise the opinion to state
that the 612,000 shares of common stock were, and the 150,000,000
shares of common stock that may be issued upon conversion of the
Series A preferred stock, once issued in accordance with the terms
of
the preferred stock will be, validly issued, fully paid and non-
assessable.
* * *
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 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 Howard Efron, Staff Accountant at 202-551-
3439
or Robert Telewicz, Senior Accountant, at 202-551-3438 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Michael McTiernan at 202-551-3852 or me
at
202-551-3495 with any other questions.
Sincerely,
Elaine Wolff
Branch Chief
cc: Thomas Cook, Esq. (via facsimile)
David Gallagher
Political Calls, Inc.
April 5, 2007
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