SOMMER & SCHNEIDER LLP
595 STEWART AVENUE, SUITE 710
GARDEN CITY, NEW YORK 11530
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Herbert H. Sommer Telephone (516) 228-8181
Joel C. Schneider Facsimile (516) 228-8211
September 29, 2004
VIA EDGAR AND E-MAIL
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Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0303
Attn: Mr. Michael Pressman,
Office of Mergers and Acquisitions
Re: CDKnet.com, Inc. (the "Company")
Schedule 14F-1 filed September 7, 2004
File No. 5-58695
Ladies and Gentlemen:
This letter is submitted in response to the letter dated September 15, 2004
from the Staff of the division of Corporation Finance (the "Staff") of the
Securities and Exchange Commission (the "Commission"), concerning the Company's
Information Statement on Schedule 14F-1 filed with the Commission on September
7, 2004. Responses are cross-referenced to the Staff's comment letter, and when
appropriate, we have indicated the location of the requested revision in the
marked draft of Amendment No. 1 to the Company's Information Statement on
Schedule 14F-1 (the "Information Statement"), as provided to Mr. Pressman today.
Schedule 14F-1
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1. The Company has revised the section entitled "Directors and Executive
Officers" beginning on page 12 to describe the matters relating to its lack of
committees of the board of directors, including a nominating committee and its
general plans with respect to the function of such committees. In addition, the
section has been amended to indicate that there is presently no procedure in
place for handling shareholder nominations.
2. The disclosure under "The Transactions" beginning on page 2 has been
revised to explain the issuance of 16,099,577 shares, including the exemption
relied upon. In addition, the subscribers to the private placement have been
listed in a table and the notes to the table indicate the terms of any non-cash
subscriptions.
Securities and Exchange Commission
September 29, 2004
Page 2
3. The sections captioned "Executive Compensation" beginning on page 5 and
"Certain Relationships and Related Transactions" beginning on page 13 have been
revised to provide the disclosure required by Items 7 and 8 of Schedule 14A for
the most recently completed fiscal year ended May 31, 2004. In addition, a new
section entitled "Equity Compensation Plans" has been added beginning on page 6
to provide information required by Item 201(d) of Regulation S-B and information
concerning an equity plan adopted after May 31, 2004 but from which grants were
made pursuant to the Merger Agreement.
Filing and Mailing of Amended Schedule 14F-1
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The Company will file the amended Schedule 14F-1 and plans to mail it to
holders of record upon filing. Upon receipt of the Staff's September 15, 2004
comment letter, the Company suspended corporate action of new directors taking
office pending the conclusion of this review. Absent such suspension, the
appointees would have assumed their director appointments on September 18, 2004,
ten days after the initial mailing of the Schedule 14F-1 filed on September 7,
2004. Accordingly, to permit the circulation of the amended statement and
orderly corporate action by the Company, we request that the Staff exercise
discretion granted to it in Rule 14F-1 to shorten the filing and mailing period
to two days.
Form 8-K
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The Company neglected to file a Form 8-K in connection with the acquisition
because it was not satisfied that it had compiled necessary information required
to make the filing until it already filed a Form 10-KSB. The Form 10-KSB
contains all the information required to be filed with a Form 8-K and audited
financial statements of the acquired company. Nevertheless, to complete its
filing, the company will file a Form 8-K relating to the acquisition within two
days. The Form 8-K will incorporate exhibits filed with its Form 10-KSB by
reference. Note that the Company has been advised that the Form 8-K will not
require filing of either audited financial statements of the acquired company or
pro forma financial information.
Under Reg SX 210.3-.05 (b)(4)(B)(iii) "separate financial statements of the
acquired business need not be presented once the operating results of the
acquired business have been reflected in the audited consolidated financial
statements" and (iv) " a separate audited balance sheet of the acquired business
is not required when the registrant's most recent audited balance sheet required
by 210.3-01 is for a date after the date the acquisition was consummated."
Since the Form 10-KSB filed September 17, 2004 contains audited financial
statements of the Company, including the acquired company as of May 31, 2004 and
for each of the two fiscal years ended May 31, 2004, the Company does not
believe additional separate statements are required.
Securities and Exchange Commission
September 29, 2004
Page 3
Closing Information
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The Company acknowledges that the adequacy and accuracy of the disclosure
in its filings with the Commission is the responsibility of the Company. The
Company acknowledges that staff comment or changes in response to staff comment
do not foreclose the Commission from taking any action with respect to a filing.
The Company also represents that staff comment may not be asserted as a defense
in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
We would appreciate an opportunity to resolve any remaining concerns the
Staff may have in to complete this process at your earliest convenience.
This letter has been prepared at the direction of, reviewed and approved
by, the appropriate senior offices of the Company. Please direct any questions
regarding legal responses to the undersigned at (516) 228-8181.
Thank you for your assistance in this matter.
Very truly yours,
/s/ Herbert H. Sommer
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Herbert H. Sommer
HHS/md
cc: Oleg Logvinov