[LETTERHEAD]
Law Offices
Reisman & Associates, P.A.
6975 NW 62nd Terrace
Parkland, Florida
33067
email: Jbreisman@earthlink.net
Phone:954-344-0809
Fax:928-569-8189
September 6, 2005
Mr. H. Christopher Owings, Assistant Director
Division of Corporation Finance
Securities and Exchange Commission
Washington, D.C. 20549
Re: McKenzie Bay International, Ltd. ("McKenzie Bay")
Post-Effective Amendment No. 3 to Form SB-2
File No. 333-119493
Dear Mr. Owings:
Reference is made to your letter of August 25, 2005 relating to Post-Effective
Amendment No. 2 to Form SB-2 and Form 10-KSB for the fiscal year ended September
30, 2004 filed McKenzie Bay. The following captions and paragraph numbers
correspond to those in your letter.
Post-Effective Amendment No. 2 to Form SB-2 to Registration Statement on Form
SB-2
General
1. We have been advised by McKenzie Bay that the exercise prices of the warrants
that Spencer Clarke will receive will be fixed on before the issuance of the
warrants. The only variance in the exercise prices after the warrants are
issued will be customary adjustments for any stock splits, stock dividends,
recapitalizations and similar transactions. The situation described in Part
3S the March 1999 Supplement to the Division of Corporation Finance's Manual
of Publicly Available Telephone Interpretations is quite different. The
securities described in Part 3S were convertible into common stock using a
conversion ratio based on the issuer's common stock trading price at the time
of conversion. Accordingly, the prohibition on the registration of shares
underlying warrants exercisable at a price based upon the trading value of
the underlying shares does not apply to the registration of the shares
underlying the warrants to be issued to Spencer Clarke.
2. The number of shares which have been registered by McKenzie Bay and which
underlie convertible securities is not dependant upon the price of McKenzie
Bay's shares at the time of the conversion.
Facing Page of Registration Statement
3. The requested statement relating to Rule 415 has been added and the box has
been checked.
Prospectus Cover Page
4. The cover page has been reduced to one page.
Prospectus Summary, Page 6
5. The number of shares that have been registered that have already been sold to
Cornell Capital Partners has been disclosed. In addition, the creditor has
been identified by name.
6. As I discussed with Howard Baik by telephone, the convertible notes are not
related to the Standby Equity Distribution Agreement. The only commonality is
the placement agent, which, in both cases, was Spencer Clarke.
The cover page of the prospectus states that prospectus relates to 113,534
shares underlying the convertible notes. In addition, the following has been
added to the Prospectus Summary under the sub caption "The offering by the
Selling Stockholders" and under the caption "The Selling Stockholders:"
In 2004 we borrowed an aggregate of $1,093,750 and issued our 12%
convertible promissory notes in that aggregate amount. We have issued
1,100,009 shares of our commons stock upon conversion of the promissory
notes of which 33,334 shares remain unsold by the lenders as of the date
of this prospectus and have been registered with the SEC for resale in
the registration statement of which this prospectus is a part. An
additional 80,200 shares we may issue upon conversion of the 12%
convertible promissory notes which remained outstanding as of the date of
this prospectus have been similarly registered. In connection with the
issuance of the convertible promissory notes, we issued warrants to the
lenders for the purchase of an aggregate of 1,623,300 shares of our
common stock. The warrants as to 750,000 shares are exercisable on or
before August 13, 2006 at $1.07 per share. The remaining warrants are
exercisable on or before September 7, 2006 at $1.42 per share. The
shares which may be acquired upon exercise of the warrants have also been
registered with the SEC for resale in the registration statement of which
this prospectus is a part.
Certain Terms of the Equity Distribution Agreement Explained, page 61
7. The word "certain" has been deleted in the two places to which you referred.
McKenzie Bay believes that the material conditions have been disclosed.
In addition to the revisions referred to above, Post-Effective Amendment No. 3
has been updated and further revised.
Form 10-KSB for Fiscal Year Ended September 30, 2004
Item 8A. Controls and Procedures, page 46
8. We have been advised by McKenzie Bay that it will shortly amend its report to
disclose the conclusions of its certifying officers regarding the
effectiveness of the disclosure controls and procedures. We have been
further advised by McKenzie Bay that such conclusions will included in future
reports.
9. We have been advised by McKenzie Bay that the disclosure of "any changes"
rather than just "significant changes" will be made in the amended report and
in future reports.
Report of Independent Registered Accounting Firm, page F-1
10. McKenzie Bay will respond to the comment at the time it amends its Form 10-
KSB for Fiscal Year Ended September 30, 2004.
If you any further comments or questions, please do not hesitate to contact me.
Sincerely,
/s/ Jonathan B. Reisman
- -----------------------
Jonathan B. Reisman