Andrew D. Myers
direct 617-589-3835 direct fax 617-305-3102
email amyers@davismalm.com
December 9, 2005
VIA EDGAR
Securities and Exchange Commission
Mail Stop 3561
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: John Reynolds
Assistant Director
Division of Corporation Finance
Re: Harbor Acquisition Corporation
Amendment No. 5 to Registration Statement on Form S-1
Registration Statement No. 333-126300
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Dear Mr. Reynolds:
Harbor Acquisition Corporation (the "Company") has filed with the
Commission an Amendment No. 5 to the above-referenced Registration Statement
(the "Registration Statement"). For your convenience, we are providing you with
three paper copies of Amendment No. 5 marked to show the changes made from
Amendment No. 3 to the Registration Statement, which was filed with the
Commission on November 15, 2005. Amendment No. 4 was filed on November 25, 2005
solely to file amended and additional exhibits. The changes reflected in
Amendment No. 5 are intended to respond to the comments set forth in your letter
dated December 6, 2005 (the "Comment Letter"). The changes made in response to
the Comment Letter are discussed below. The numbered paragraphs below correspond
to the numbered comments in the Comment Letter. Page references are to the pages
in the prospectus included in Amendment No. 5 to the Registration Statement
filed with the Commission on this date (the "Prospectus").
PROSPECTUS SUMMARY. PAGE 1
1. COMMENT. WE NOTE YOUR RESPONSE TO COMMENT SEVEN THAT YOU WILL "FOCUS
YOUR EFFORTS EXCLUSIVELY ON ACQUIRING" A COMPANY IN THE INDUSTRIAL OR CONSUMER
PRODUCTS SECTORS AND AS SUCH YOU HAVE REMOVED THE RISK FACTOR TITLED "OUR
OFFICERS AND DIRECTORS MAY NOT HAVE SIGNIFICANT EXPERIENCE OR KNOWLEDGE OF HE
INDUSTRY OF A TARGET BUSINESS THAT OPERATES OUTSIDE OF THE
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December 9, 2005
Page 2
INDUSTRIAL AND CONSUMER PRODUCT SECTORS." WE DO NOT UNDERSTAND HOW THAT RISK
DOES NOT EXIST IN LIGHT OF YOUR STATEMENT ON PAGE ONE THAT YOUR EFFORTS "WILL
NOT BE LIMITED TO A PARTICULAR INDUSTRY." EITHER THEY ARE OR THEY ARE NOT
LIMITED. SINCE IT APPEARS THEY ARE NOT LIMITED TO THE AREAS OF YOUR MANAGEMENT'S
EXPERIENCE, YOU SHOULD NOT STRUCTURE YOUR DISCLOSURE AS IF THERE IS ZERO
POSSIBILITY THAT YOU WILL ACQUIRE A NON INDUSTRIAL OR CONSUMER PRODUCTS COMPANY.
PLEASE REVISE YOUR DISCLOSURE ACCORDINGLY.
RESPONSE. The Company has eliminated the statement on page one that its
search will not be limited to a particular industry. The Company's search will
be limited to acquiring a middle market business operating in the industrial or
consumer products sectors. The changes made in Amendment No. 3 were meant to
reflect this modification in the Company's plan, but some inconsistencies
remained, as identified by the Staff. The revised sentence in this paragraph
clarifies this point. Similar changes have been made elsewhere in the prospectus
in response to this comment and comments 6 and 7, as described below.
2. COMMENT. THROUGHOUT THIS DOCUMENT, YOU STATE NUMEROUS BELIEFS OR PROMOTIONAL
STATEMENTS THAT ONLY APPLY IF YOU SEEK A COMPANY IN THE INDUSTRIAL OR CONSUMER
PRODUCTS SECTORS. BECAUSE YOU ARE NOT LIMITED TO THOSE ACTIVITIES, YOU SHOULD
REVISE YOUR DISCLOSURE TO CLARIFY THAT ANY PERCEIVED BENEFITS OR ADVANTAGES ARE
MOOT IF YOU ELECT TO ACQUIRE A COMPANY OUTSIDE OF THE INITIAL SECTOR FOCUS.
RESPONSE. Because the Company has clarified that it is, in fact, limited
to acquiring a company within the industrial and consumer products sectors,
it does not believe it needs to clarify that any perceived benefits of
management's experience within these sectors would be moot if a business
combination occurred outside of this sector focus.
USE OF PROCEEDS. PAGE 20
3. COMMENT. WE NOTE YOUR RESPONSE TO COMMENT 11 AND THE REVISION IN THE TABLE
AND THE ADDITIONAL FOOTNOTES. IT APPEARS THAT FOOTNOTE ONE AND TWO SHOW THAT
YOUR ALLOCATION OF EXPENSES IS OVERLAPPING. YOU RESERVED AN AMOUNT FOR DUE
DILIGENCE UNDER BOTH FOOTNOTE ONE AND TWO. YOU ALSO RESERVE PAYMENTS TO
THIRD-PARTY CONSULTANTS AND OTHER PROFESSIONALS UNDER FOOTNOTE ONE AND TWO.
PLEASE REVISE TO PRECISELY OUTLINE YOUR USE OF THE PROCEEDS NOT HELD IN TRUST.
RESPONSE. The amounts allocated in the first line item apply only to the
search process before a specific target business is identifies. The Company
removed the reference to due diligence from the first line item and clarified
that these amounts apply to costs incurred in identifying a potential target
business. Expenses for due diligence will come from amounts the Company
anticipates it will expend after it identifies a potential target company, as
clarified in the revised heading to second line item in the table. In
addition, the Company eliminated the reference to payments to "outside
professionals" from the footnote to line item two. Although the Company
cannot predict at this time more precisely how it will spend all amounts
referenced in the table at the bottom of page 20, it believes that this
modified disclosure eliminates the confusion and overlap in its prior filings
and gives additional transparency to which amount will be spent at what times
and for what purpose.
Securities and Exchange Commission
December 9, 2005
Page 3
4. COMMENT. WE NOTE THE ADDITIONAL DISCLOSURE ON PAGE 21 THAT MANAGEMENT HAS
EXPERIENCE THAT "INVOLVES RAISING POOLS OF MONEY WITH NO INVESTMENT TARGET OR
LIST OF POTENTIAL CANDIDATES, SEARCHING FOR COMPANIES TO INVEST IN OR ACQUIRE
FROM SCRATCH, CONDUCTING DUE DILIGENCE, AND STRUCTURING AND COMPLETING
TRANSACTIONS." PLEASE REVISE YOUR ITEM 401 OF REGULATION S-K DISCLOSURE TO
HIGHLIGHT THIS EXPERIENCE.
RESPONSE. The Company has expanded its disclosure on pages 38 and 39 to
highlight those directors and officers with the specific experience of raising
pools of money and identifying and acquiring operating companies. We would also
note that the descriptions for Mr. Carson and Mr. Mahoney also include
statements highlighting their experience with acquisitions.
5. COMMENT. PLEASE REVISE TO CLARIFY WHICH LINE ITEM THE PAYMENT OF $75,000 TO
YOUR CEO AND PRESIDENT WOULD BE ALLOCATED TO.
RESPONSE. The Company has revised the table on page 20 to footnote the
specific line items with respect to which amounts came from the $75,000 advance
from the Compamy's President and Chief Executive Officer.
PROPOSED BUSINESS, PAGE 27
6. COMMENT. WE NOTE YOUR RESPONSE TO COMMENT 12. IN LIGHT OF THE FACT THAT YOU
"WILL NOT BE LIMITED TO A PARTICULAR INDUSTRY," THE PRIOR COMMENT STILL APPLIES.
THE NOTED DISCLOSURE ON PAGE ONE COMBINED WITH THE FACT THAT YOU ONLY "INTEND"
TO SEARCH FOR COMPANIES WITHIN YOUR INITIAL FOCUS, LEAVES OPEN THE POSSIBILITY
FOR YOU TO ACQUIRE A COMPANY OUTSIDE SUCH FOCUS. PLEASE REVISE TO DISCUSS YOUR
INTENDED SEARCH PROCESS IN MORE DETAIL SINCE YOU ARE ABLE TO ACQUIRE COMPANIES
OUTSIDE OF MANAGEMENT'S EXPERTISE. REVISE TO CLARIFY IF THERE IS A TIME FRAME OR
MONETARY AMOUNT USED THAT WILL TRIGGER YOUR SEARCH OF COMPANIES NOT IN THE
CONSUMER OR INDUSTRIAL PRODUCTS SECTORS. REVISE TO EXPLAIN HOW YOU WILL EVALUATE
COMPANIES THAT MANAGEMENT HAS NO EXPERIENCE IN. ALSO, DISCUSS THE RISKS
ASSOCIATED WITH MANAGEMENT'S ABILITY TO LOOK OUTSIDE OF THEIR EXPERTISE.
RESPONSE. The Company has removed the statement that it "will not be
limited to a particular industry" from page one. In addition, the Company has
replaced the words "intends to" in the second sentence on page 27 with the word
"will." Because the Company has clarified that it will acquire a company within
the industrial and consumer products sectors, it does not believe it must revise
the description of its search process to describe the time frame or monetary
limitations that will trigger a search of companies outside of these sectors,
how it would evaluate companies outside of these sectors, or the risks
associated with management's ability to search outside of these sectors. The
Company believes it has now removed any inconsistencies that remained in its
prior filing of Amendment No 3.
7. COMMENT. PLEASE REVISE TO RECONCILE THE SECOND SENTENCE ON PAGE 29 THAT
BEINGS "SUBJECT TO LIMITATIONS THAT A TARGET BUSINESS MUST BE IN THE INDUSTRIAL
AND CONSUMER PRODUCTS SECTORS" WITH YOUR DISCLOSURE ON PAGE ONE THAT YOUR
EFFORTS WILL NOT BE LIMITED TO A PARTICULAR
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December 9, 2005
Page 4
INDUSTRY." WE ALSO DIRECT YOUR ATTENTION TO DISCLOSURE ON PAGE 29 THAT "ALTHOUGH
[YOU] WILL FOCUS EXCLUSIVELY ON ACQUIRING AN OPERATING BUSINESS IN THE
INDUSTRIAL OR CONSUMER PRODUCTS SECTOR, WE MAY ACQUIRE COMPANIES OPERATING IN
ANY INDUSTRY [YOU] CHOSE."
RESPONSE. The Company has removed the second sentence from the third
paragraph on page 29, which was confusing when read with the second sentence on
page 29 and other statements that correctly reflect the Company's decision limit
its search to acquire a business within the industrial or consumer products
sectors. The Company has also added language in the new second sentence of the
third paragraph on page 29 to clarify this point.
PRINCIPAL STOCKHOLDERS, PAGE [43]
8. COMMENT. WE NOTE THE ADDITIONAL DISCLOSURE IN RESPONSE TO COMMENT 17. WE NOTE
THAT MESSRS. HANKS AND DULLUM HAVE AGREED TO PURCHASE WARRANTS IN THE MARKET
AFTER "THE LATER OF THE DATE SEPARATE TRADING OF THE WARRANTS HAS COMMENCED OR
60 DAYS AFTER THE CLOSING OF THIS OFFERING." PLEASE REVISE TO RECONCILE THAT
WITH YOUR RESPONSE THAT SUCH PURCHASES OR BIDS WILL NOT "OCCUR UNTIL 60 CALENDAR
DAYS FOLLOWING THE END OF THE RESTRICTED PERIOD."
RESPONSE. The Company has clarified on page 45 that for purposes of the
commencement of the warrant purchases, the "closing of this offering" is deemed
to be the end of the restricted period under Regulation M, as is described in
fourth paragraph on page 45. A conforming change has also been made on page 54.
OTHER TERMS, PAGE 55
9. COMMENT. WE NOTE THAT FERRIS, BAKER WATTS WILL PURCHASE THE WARRANTS ON
BEHALF OF THOSE OBLIGATED BY THE WARRANT PURCHASE AGREEMENT. PLEASE ADVISE IF
FERRIS, BAKER WATTS IS ABLE TO PURCHASE YOUR SECURITIES IN THE MARKET FOR THEIR
OWN ACCOUNT. WE ALSO NOTE THAT FERRIS, BAKER WATTS WILL BE ABLE TO HAVE A
DESIGNEE (WHO NEED NOT BE THE SAME PERSON EACH TIME) PRESENT AT ALL MEETINGS OF
THE BOARD OF DIRECTORS AND THAT SUCH DESIGNEE WILL RECEIVE THE SAME NOTICES AND
COMMUNICATIONS AS YOUR DIRECTORS DO. PLEASE ADVISE IF FERRIS, BAKER WATTS WILL
POSSESS OR MAY OTHERWISE HAVE ACCESS TO NON-PUBLIC INFORMATION AS A RESULT OF
THIS ARRANGEMENT WHEN IT ENGAGES IN WARRANT PURCHASES FOR THE UNDERSIGNS OR
ITSELF, AND IF SO, CLARIFY FARRIS BAKER WATTS' ABILITY TO ACT AS THE PURCHASER
UNDER THE WARRANT REPURCHASE AGREEMENTS CONSISTENTLY WITH THE PROVISIONS OF
SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND THE RULES PROMULGATED
THEREUNDER. WE MAY HAVE FURTHER COMMENT.
RESPONSE. Ferris, Baker Watts will be able to purchase the Company's
securities in the market for its own account, subject to its compliance with
applicable laws and regulations, including, without restriction, restrictions on
trading in securities while in possession of material non-public information.
Ferris, Baker Watts has confirmed to us that it is aware of its obligations
under the securities laws and will comply with such laws, including in
connection with acting as the purchaser under the warrant purchase agreements.
In connection with these obligations, warrant purchases made pursuant to the
warrant purchase agreements will be made
Securities and Exchange Commission
December 9, 2005
Page 5
pursuant to pre-established agreements in accordance with Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended, which agreements will provide,
among other things, that employees of Ferris, Baker Watts involved in the
warrant purchases shall not possess material nonpublic information regarding the
Company or its securities. In furtherance of these obligations, Ferris, Baker
Watts has informed the Company that any persons serving as a designee at
meetings of the board of directors of the Company will be prohibited from
communicating or otherwise disclosing, directly or indirectly, information about
the Company or its securities to employees of Ferris, Baker Watts involved in
warrant purchases or any other trading activities involving the Company's
securities.
If you have any questions concerning the material provided herein, please do not
hesitate to call William F. Griffin, Jr., at this office, or the undersigned.
Very truly yours,
/s/ Andrew D. Myers
Andrew D. Myers
ADM/rld
Enclosures
cc: Mr. Robert J. Hanks
Mr. David A. Dullum
Elizabeth Hughes, Esquire
William F. Griffin, Jr., Esq.