Memorandum of Compliance
Outlining Certain Changes Reflected in
Amendment No. 3 to Registration Statement on Form SB-2
Deep Field Technologies, Inc.
Set forth below are the responses of Deep Field Technologies, Inc. to the
comments from the staff of the Division of Corporation Finance (the "Staff")
of the Securities and Exchange Commission (the "SEC") with respect to
Amendment No.2 to the Registration Statement on Form SB-2 of the Company,
which was filed with the SEC on April 14, 2005. For the Staff's convenience,
the Staff's comments have been stated below in their entirety, with the
responses to a particular comment set out immediately under the comment or
comments. The responses described below are contained in Amendment No. 3 to
the Registration Statement on Form SB-2 ("Amendment No. 3" or the
"registration statement"), which is being filed simultaneously herewith.
Capitalized terms used herein are intended to have the meanings ascribed to
such terms in the Amendment No. 3.
General
1. We note your response to our prior comment no. 20. Please file an
amended facing page to your registration statement to register your
additional shares. In addition, we note that the first paragraph of
the front cover and disclosure elsewhere in your prospectus states that
up to 10,000,000 shares will be distributed. Please reconcile or
otherwise explain why your disclosure is sufficient. We further note
your 100,000-for-one stock split as discussed on page 4. Please
explain how your stock split is related to the additional shares
registered. Please also advise whether you plan to provide the
distribution ratio prior to effectiveness as well as why more specific
numbers cannot be obtained once you have obtained the holders' list.
An amended facing page has been filed with Amendment No.3. In addition,
disclosure has been modified on the cover page and pages 4, 5, 25, 50, 53, 55
and 56 of the registration statement to clarify that up to 10,050,000 shares
will be distributed. We do not believe our stock split is related to the
additional shares registered. We plan to provide the distribution ratio
(which we believe will be 1 share of the Company's Class A Common Stock for
each 984 shares of iVoice Class A Common Stock held by an iVoice stockholder,
rounded as described in the prospectus) when we obtain a holder's list closer
to the effective date of the registration statement. The final distribution
ratio will be included in the registration statement prior to effectiveness.
2. In light of the termination of your equity line of credit and your
convertible debentures, please advise us of your intent with respect to
your registration statement on Form SB-2, File No. 333-120609.
It is the Company's intention to enter into a new equity line of credit
arrangement pursuant to its existing commitment after the Distribution
occurs. If the Company enters into such arrangement it intends to amend and
update the referenced registration statement to provide for the resale of the
shares as it anticipates it will be required by final documentation to do.
If the Company does not obtain an equity line of credit after the
Distribution, it will withdraw the referenced registration statement.
Risk Factors
Deep Field has in the past and may in the future sell ... pp. 14-15
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3. We note your revised risk factor and your statement that as of the date
of your registration statement, you have no outstanding convertible
debentures. Immediately following your statement, you disclose your
$190,000 promissory note which is convertible to Class A common stock.
You further discuss your existing convertible obligations. Please
clarify your disclosure.
Disclosure has been modified on page 14 of the registration statement.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations for the Year Ended December 31, 2004 as Compared with
the Year Ended December 31, 2003, pp.31-32
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4. Please elaborate on your disclosure regarding the $77,953 of interest
and financing costs. You state that such amount resulted primarily
from debt conversion discounts on the issuance of the $400,000 in
secured convertible debentures. However, as disclosed elsewhere in
your prospectus, fees with respect to the debentures were 10% of the
principal amount or $40,000. Please quantity and elaborate on the debt
conversion discounts.
Disclosure has been modified on page 31 of the registration statement. In
addition, the Statements of Operations for December 31, 2004 and 2003 have
been expanded to detail the amounts of interest and financing costs.
Disclosure relating to debt conversion discounts has been deleted.
Liquidity and Capital Resources, pp.31-35
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5. We note that Messrs. Mahoney and Meller may be paid in shares of Class
B common stock on a $1 per share basis. Please advise us on the basis
for and enforceability of this arrangement particularly in light of its
absence from the amendment to Mr. Mahoney's employment agreement. In
addition, please provide us with the agreement whereby Mr. Meller has
agreed to the arrangement.
Mr. Meller has agreed to this arrangement in the Amendment to Employment
Agreement dated January 11, 2005 which has been filed previously as Exhibit
10.17 to the registration statement. Mr. Mahoney has agreed to this
arrangement in Amendment No.1 dated April 1, 2004 to his Employment Agreement
which has been filed previously as Exhibit No. 10.24 to the registration
statement.
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Deep Field's Management
Employment Agreements, pp.44-46
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6. You state that either Messrs. Mahoney or Meller "would be required to
recuse himself" from any discussions or vote regarding any potential
termination of him. If Messrs. Mahoney or Meller exercise the
discretion over their respective recusals, please disclose this and
state the effect of any such failure to recuse himself.
Disclosure has been modified on pages 45 and 46 of the registration statement.
Federal Income Tax Consequences of the Distribution
7. Please consider including an example of the possible tax consequences
to assist in your disclosure.
We have reconsidered including an example of possible tax consequences and
continue to maintain that such an example would not be helpful and could
possibly be misleading and confusing to shareholders whose tax situations
differ from that presented in the example.
Changes in Accountants
8. Item 304(a)(1)(iv)(A) of Regulation S-B requires you to disclose
whether during your two most recent fiscal years and any subsequent
interim period through the date of dismissal whether there were any
disagreements, resolved or not, with the former accountant on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement(s), if
not resolved to the satisfaction of the former accountant, would have
caused it to make reference to the subject matter of the
disagreement(s) in connection with its reports. Please revise in this
section on pages 59-60 of the text.
Disclosure has been modified, as requested, on page 59 of the registration
statement.
9. Please file a currently dated letter from your former accountants
stating that they agree with your Item 304 disclosures, or the extent
to which they do not agree. Refer to Item 304(a)(3) of Regulation
S-B. The letter should be filed as Exhibit 16 in the amended
registration statement. Please revise.
The letter has been filed as Exhibit 16 to the registration statement.
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