LOEB & LOEB LLP
TELEPHONE: 212.407.4000
A LIMITED LIABILITY PARTNERSHIP 345 PARK AVENUE FACSIMILE: 212.407.4990
INCLUDING PROFESSIONAL CORPORATIONS NEW YORK, NY 10154-0037 www.loeb.com
L&L
Direct Dial: 212-407-4827
Direct Fax: 212-214-0686
e-mail: dfischer@loeb.com
June 8, 2005
Jennifer G. Williams
Special Counsel
Securities and Exchange Commission
Washington DC 20549-0402
Re: AVP, Inc.
Registration Statement on Form SB-2
File No. 333-124084
Dear Ms. Williams:
Our responses to your May 13, 2005 letter regarding the
captioned matter are numbered to correspond to the paragraph numbers of your
letter, of which a copy is enclosed.
1. Corporate action to increase the authorized Common Stock
will be taken before we request acceleration of effectiveness of the
registration statement. We are preparing proxy material, which we hope to file
shortly, in preparation for the meeting.
2. Per our telephone discussion, this confirms that the
private placement closed February 28, 2005.
3. It is more accurate to say that shares reserved for player
options had been allocated--they have not yet been granted. The stock options
will be distributed among the players pursuant to an effective registration
statement under the Securities Act, unless an exemption is determined to be
available.
4. Management did not hold any media interviews that discussed
the Company's strategies and growing scope of business opportunities. Management
has indicated in meetings with several analysts that at some point in the future
the Company would consider expanding into indoor volleyball and would also
explore commerce opportunities in the volleyball industry (e.g., instructional
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June 8, 2005
Page 2
camps, equipment catalogues) as well as expanding its sales force to take
advantage of other underdeveloped sports properties. However, no specific
targets were identified and no specific timetable was set for commencing such
initiatives.
5. Please see response 4.
6. We have added a cross reference in compliance with the
comment.
7. This information is disclosed at the end of the third
paragraph.
8. We have deleted this material, in compliance with the
comment.
9. We have added the requested information to the Summary,
under the sub-caption, Summary Financial Information.
10. We have added the requested information to the Summary,
under the sub-caption, Summary Financial Information.
11. We have revised the material for clarity, under the
sub-heading, Shares Being Offered for Resale.
12. We have revised the risk factors, in compliance with the
comment.
13. We have highlighted the sub-headings in compliance with
the comment.
14. We have added the suggested risk factor, captioned, "We
compete with other sports leagues for corporate advertising budgets."
15. We have added the suggested risk factor, captioned, "We
may require additional financing."
16. We have modified the risk factor previously captioned
"Shares eligible for future sale," to reflect this comment.
17. We have added a risk factor captioned "Potential Control
by Management."
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June 8, 2005
Page 3
18. We have added a risk factor captioned "Potential Control
by Holders of Series B Convertible Preferred Stock."
Since we intend to authorize the required additional Common
Stock before the registration statement becomes effective, this risk factor, as
well as the first two risk factors under "Risks Relating to Our Securities" will
be deleted, and the third risk factor will be deleted, but any material penalty
required by AVP to have paid will be described elsewhere in the prospectus, as
appropriate.
19. The basis for each of the statements is as follows:
o "We own and operate every significant professional beach volleyball
event in the United States": AVP is the only organization that puts on beach
volleyball tournaments that offer any significant prize money. The minimum prize
money this year is $175,000. To AVP's knowledge, no other tournament in this
country offers as much as $10,000. Moreover, no player under contract with AVP
is permitted to play in these tournaments. AVP's beach volleyball tournaments
are the only ones in the United States that are televised nationally on
broadcast or cable television. AVP athletes are the only beach volleyball
players to represent the United States at the Olympic Games. AVP athletes have
won gold medals at all 3 Olympic Games where beach volleyball was a medal sports
(Atlanta in 1996, Sydney in 2000, and Athens in 2004). Only AVP athletes have
represented the United States in major international professional beach
volleyball competitions.
o "The AVP Tour is the sole nationally and internationally recognized U.S.
professional beach volleyball tour": The AVP Tour is the recognized national
tour by both the United States national governing body for volleyball (United
States Volleyball Association) and the international governing body (FIVB).
o "...of its popularity with a demographic group considered highly
desirable by advertisers--educated, affluent, 18 to 34 year-old, consumers":
This is based on independent research conducted by Sports Management Research
Institute (SMRI), a leading sports research firm.
o "[B]each volleyball enjoys significant popularity in the United States
and worldwide": Over 20 million people participate in volleyball annually (as
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June 8, 2005
Page 4
reported by Sporting Goods Manufacturer's Association 2001 survey). Outside the
United States, more than 750,000 fans attended professional beach volleyball
events in 2004 (as reported by FIVB).
o "...is one of the most popular sports at the Summer Olympics": Beach
volleyball received substantial prime-time coverage and high ratings during the
2004 Summer Olympic Games. For example, beach volleyball's primetime Nielsen
rating average was 16.7 compared to an overall Olympic primetime rating average
of 15.8. Also, the average primetime rating at the start of each beach
volleyball broadcast was 15.3 which increased to an average finishing rating of
18.1. Attendance at the beach volleyball competition totaled 170,000 during the
Games; the beach volleyball competition was one of the few competitions in
Athens to have capacity crowds.
20. We believe that Item 601(b)(10) does not require filing of material
agreements made in the ordinary course of business, except for agreements upon
which the issuer's business is substantially dependent. AVP had 11 sponsorships
in 2003; 14, in 2004; and 15 to date in 2005, notwithstanding that three
sponsors from 2004 did not return in 2005. Of AVP's current sponsors, only four
have agreements that extend to 2006; three that extend to 2007; and one through
2008. AVP does not have a contract beyond 2005 with the sponsor that contributed
the greatest amount of revenue for 2004. From this, we believe it is clear that
AVP's continued operations depend far more on successful negotiation of
sponsorships, annually, than agreements with any single or small group of
sponsors. On reflection, we have added a risk factor to this effect. Because
most contracts are re-negotiated each year, however, we consider them made in
the ordinary course of business.
A single sponsor accounted for more than 10% of AVP's 2004 revenue,
pursuant to an agreement that expires this year, as noted. Although Regulation
S-K, Item 101(c)(vii) requires identification of a single customer accounting
for more than 10% of an issuer's sales (if loss of the customer would materially
and adversely affect the issuer), the parallel provision of Regulation S-B, Item
101(b)(6), omits such a requirement, reflecting, we believe, the SEC's
recognition of the harm that such disclosure might cause a small business
issuer.
If we identify this sponsor, third parties, such as competitors, using
other information available in the financial statements and notes, could
accurately assess not only the dollar amount of revenue contributed by that
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June 8, 2005
Page 5
sponsor, but the identity and amounts of contributions by other of our
larger-volume sponsors. Based on those amounts and the amounts of commercial
time broadcast, the rates paid by AVP's sponsors also could be determined.
Competitors' (or sponsors') knowledge of AVP's rates would impair its ability to
negotiate with sponsors for their best prices. Additionally, sponsors might be
wary of doing business with AVP, if it appeared that information the sponsors
wished to keep confidential, contained in what to them are agreements of minor
importance, would have to be disclosed because of the contract's relative
significance to the small business counterparty.
AVP would request confidentiality regarding any sponsor agreement it files
as an exhibit, regarding not only the financial information, but the party's
identity, as well. Other than the information that AVP would seek to redact, the
terms of these agreements are not material to investors.
21. The financial statement disclosures have been revised and are now
consistent with the forepart of the prospectus.
22. The NBC and Fox contracts are not in writing. The disclosure regarding
the NBC and Fox agreements, as well with OLN, sets forth all material terms,
other than confidential terms, such as pricing.
23. We have added material to the fourth paragraph under the caption
"Business--Operations" in compliance with this comment and have filed a form of
player contract. AVP does not consider its business substantially dependent on
any particular player or small group of players.
24. We have added material as the first bullet in the fourth paragraph
under the caption "Business--Operations" in compliance with this comment.
25. We have revised to clarify that AVP received gross merchandising
revenue in 2003 when AVP outsourced its merchandising to a third party, but that
AVP sold merchandising in-house in 2004 and therefore incurred cost of
merchandising sales which greatly reduced the net merchandising revenue realized
by AVP.
26. We have added the requested disclosure, in compliance with the
comment.
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June 8, 2005
Page 6
27. We have revised this section in accordance with the comment.
28. Mr. Painter did not in any circumstance solicit investors. He
gave Association officers advice regarding valuation of the Association,
financial modeling, and structure of financings. He also consulted with the
officers regarding proposed transactions and participated in merger negotiations
between the Association and AVP, as well as terms of financings with the broker
dealer for the Series B Convertible Preferred Stock and Common Stock Purchase
Warrant Units offering.
29. We have revised this paragraph to clarify that the Association,
rather than AVP, was the party to the transactions referred to.
30. The amendment increasing the authorized Common Stock to
40,000,000 shares is included in Exhibit 3 to Form 8-K filed March 2, 2005,
which we incorporated by reference as Exhibit 3.1.
31. The Series A Convertible Preferred Stock has no dividend
preference over the Common Stock.
32. We have modified the risk factor previously captioned "Shares
eligible for future sale," to reflect this comment.
33. We have included rows totaling the columns, as suggested in the
comment.
34. The total of the percentages exceeds 100%, because of the means
of calculating the percentages required by the last sentence of Rule
13d-3(d)(i). Under this rule, each stockholder's shares of Common Stock
underlying the Series A Preferred Stock, the Series B Preferred Stock, or Common
Stock purchase warrants is considered outstanding solely for the purpose of
calculating that stockholder's percentage ownership.
For example, Fox's percentage is calculated by dividing the amount
of Common Stock underlying Fox's Series A Preferred Stock by the sum of such
amount of Common Stock plus only the number of shares of Common Stock actually
outstanding: 16,785,929/(16,785,929 + 30,035,615) = 35.85%.
AEG's percentage ownership is similarly calculated as
11,292,614/(11,292,614 + 30,035,615) = 27.32%, and the percentage for each of
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June 8, 2005
Page 7
Crestview and Highbridge is calculated as 8,952,120/(8,952,120 + 30,035,615) =
22.96%.
The total of the percentages for these four holders exceeds 100%, because
none of the underlying shares held by any of them (or any other selling
stockholder) is included in the calculation of beneficial ownership of any other
of them.
The percentages would be significantly smaller and would total 100%, if it
were assumed, for purposes of the calculations, that all convertible preferred
stock and warrants held by all selling stockholders had been converted or
exercised. In that case, for example, Fox's percentage would be calculated as
16,785,929/(114,248,948 + 30,035,615) = 11.63%. However this calculation would
not conform to Rule 13d-3.
35. Maxim has not had any formal or informal discussions with the selling
stockholders with respect to the resale of their shares of common stock. If a
selling stockholder requests that Maxim sell their shares on their behalf, Maxim
intends to sell such shares on an agency and unsolicited basis.
Per our telephone conversation, we have filed the lock-up agreements.
36. We have included a statement to such effect in the second paragraph
under the caption Selling Stockholders--Selling Stockholder Table.
37. We have revised this paragraph in accordance with the comment.
38. We have been advised as follows:
o SF Capital Partners is affiliated with two NASD broker-dealers,
Reliant Trading and Shepherd Trading.
o Daniel D. Hickey is a partner at Thomas Group Capital, an NASD
member; he is the General Partner of Stepping Stone Partners.
o Kellogg Capital Group LLC is an NASD member. o Highbridge
International LLC is an affiliate of a broker dealer.
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June 8, 2005
Page 8
o James Sullivan is a registered representative with Maxim Group, LLC,
which acted as placement agent for the Series B Preferred Stock and
Common Stock Purchase Warrants private offering.
o Crestview Capital Markets LLC is affiliated with an NASD member.
39. We have included this information in the appropriate notes to the
Selling Stockholders table, insofar as we have the information and will provide
the remaining information by amendment.
40. We have deleted this.
41. The quoted language has been deleted.
42. Capital stock ownership was reflected as Series A-1 preferred stock
as number of common shares authorized is insufficient to permit conversion. It
would be inappropriate to reflect the ownership in terms of common shares until
the shares are authorized. The authorization of sufficient common shares is not
readily assured until such time as they are duly authorized and the proper
documents filed in the state of incorporation. This same presentation was made
in the March 31, 2005 financial statements, again because the underlying common
shares had not been authorized.
43. We have revised the financial statement disclosures in accordance with
SFAS No. 128.
44. We have revised the section in accordance with the comment.
45. We have provided the disclosure requested.
46. The erroneous reference has been corrected.
47. We have filed the supplement, in compliance with the comment.
48, 49, 50. We have complied with each comment.
Cordially,
/s/ David C. Fischer
David C. Fischer
- ------------------- ----------------------------------------------------------
Division of UNITED STATES
Corporation Finance SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-0402
- ------------------- ----------------------------------------------------------
May 13, 2005
Leonard Armato
Chief Executive Officer
AVP, Inc.
6100 Center Drive, Suite 900
Los Angeles, CA 90045
Re: AVP, Inc.
Registration Statement on Form SB-2
File No. 333-124084
Dear Mr. Armato:
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 supplemental 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.
General
1. We note that you currently do not have enough shares authorized to
consummate this resale registration statement and thus your legal counsel cannot
provide an opinion regarding the legality of the securities being registered.
Supplementally advise us when the corporate actions necessary to authorize the
issuance of the shares will take place.
2. We note that you consummated a private placement on February 28, 2005.
Supplementally provide us with a copy of the private placement memo for our
review. In addition, please confirm whether this private placement has been
completed.
3. We noticed that Mr. Amato, your CEO, indicated in an article published
on March 28, 2005 in Brandweek.com that he gave a million dollars in stock
options to players. However, we do not see the issuances of stock options to
players discussed in this prospectus. Please discuss this practice in an
appropriate place in the prospectus. In addition, disclose all issuances of
options to players that have occurred within the past three years and include
the disclosure required for these transactions under Item 701 of Regulation S-B.
4. We note an article in the PR Newswire published on March 7, 2005 that
management may have hosted a series of media interviews to discuss the Company's
strategies and growing scope of business opportunities. However, we do not see a
discussion of the company's strategies and business opportunities discussed in
this registration statement. To the extent practicable, disclose both the past
and future financial condition and results of operations, with particular
emphasis on the prospects for the future. This includes any known trends, events
or uncertainties that are reasonably expected to have a material impact on
revenues or income from continuing operations. Please disclose this information
in an appropriate place in the prospectus.
5. In this regard, supplementally advise whether management also discussed
the Company's strategies and business opportunities to individuals other than
the media.
Prospectus Cover Page
6. Please cross-reference to the page that identifies the selling
stockholders.
7. Please disclose the price for the shares of common stock offered by the
selling stockholders.
Notice About Forward Looking Statements, page 1
8. The Private Securities Litigation Reform Act of 1995 does not apply to
registrants that issue penny stock. Please revise to delete references to the
Act, or revise to clarify that it does not apply to you.
Prospectus Summary, page 2
9. Please quantify the percentage of revenue contributed by each of the
business activities you list to the extent practicable.
10. Disclose in this section your net losses for the most recent fiscal
year and interim period.
11. It is unclear what you are trying to summarize in the last two
paragraphs on page 3. Please revise the disclosure to clarify to a potential
investor how your prior transactions relate to the purpose of the current
registration statement. It would also help if you add subheadings to highlight
this purpose.
Risk Factors, page 4
12. In some of your risk factor disclosure and subheadings, you allude to
a risk but do not clearly state the risk to investors. Revise both the risk
factor subheadings and disclosure to present the risks in terms that make it
clear how your business would be affected by the risks.
13. Additionally, please revise to highlight the subheadings in this
section with prominent type.
Risks Related to our Business, page 4
14. Consider adding a risk factor describing the competition among various
sports leagues for limited corporate advertising budgets, if material to your
business.
15. As you have never operated profitably, you should add a risk factor
explaining your cash bum rate and the possibility that you may not be able to
raise additional financing in the future.
Risks Relating to our Securities, page 5
16. Please add a risk factor relating to dilution of your common stock
upon conversion of the outstanding convertible notes, preferred stock, options
and warrants, if applicable.
17. Consider adding a risk factor relating to the potential voting control
of your directors and executive officers, if applicable. We note on page 33 that
your directors and executive officers beneficially own 80.87% of your common
stock.
18. To the extent remains applicable, add a risk factor detailing the
concentration of voting power in the holders of the Series B preferred stock.
Additionally, disclose the put right held by Series B holders that you describe
in the Capitalization section on page 36.
Business, page 11
Our Business, page 13
19. The first three paragraphs of this section include several unsupported
statements regarding your competitive position, your fanbase and viewership, and
the popularity of the sport. For example, you state that you own and operate
"every significant" professional beach volleyball event in the United States.
You also state that beach volleyball is "one of the most popular sports" at the
Summer Olympics. Statements that cannot be objectively verified, should be
deleted or characterized as the company's belief. Please revise accordingly.
20. We note you expect to depend on a relatively small number of
relationships for a majority of your revenue, including one sponsor who was
responsible for 14% of revenue in 2004. Please file all material contacts as
exhibits to this registration statement in accordance with Item 601(b)(10) of
Regulation S-B. Also, identify the material sponsors by name and disclose the
material terms of your agreements.
21. You state that you had one national sponsor accounting for I4% of
revenue in 2004. However, in the notes to the financial statements, we note that
during 2004 and 2003 two sponsors accounted for 33% and 43% of sponsorship
revenues, respectively. Please revise to clarify this discrepancy or advise why
no revision is necessary.
22. We note that since so much of your business depends on the production
and broadcast of your events on television, it appears the agreements with NBC
and Fox are material contracts. Please file these distribution and production
agreements as exhibits to the registration statement or supplementally explain
why these agreements should not be considered material. To the extent material,
also file the OLN agreement as well.
Competition, page 17
23. You state that your exclusive player contracts significantly reduce
the likelihood that an attempt to establish a competing professional beach tour
in the United States during the term of the contracts would be successful.
Please disclose in an appropriate place in this prospectus the material terms of
the player contracts, including the duration, incentives provided to the player,
and any restrictions on the player. Clarify whether each contract is negotiated
individually. In addition, file a standard player contract as an exhibit to the
registration statement as well as file any of the contracts of your key players.
24. In this regard, please disclose any additional incentives that you
provide to players that participate in the AVP Tour, such as prize money.
Management's Discussion and Analysis, page 19
25. We note on page 20 that sponsorship revenue increased by 59% due to
several factors. We also note on page 21 that merchandising revenues increased
but profitability of sales decreased sharply. Please note that when a material
change is the result of several factors or is offset by another factor, you
should quantify the percentage change attributable to each cause to the extent
practicable. Revise accordingly.
Liquidity and Capital Resources, page 24
26. In addition to listing certain financial line item changes in this
section, you should disclose the causes for these changes.
Executive Comnensation, page 30
27. To make this section meaningful to investors, you should disclose the
compensation of the executive officers of AVP, Inc. Refer to Item 402(a)(2)(iii)
of Regulation S-B and Instruction 2 to this Item. Please note that you are
required to provide this disclosure in the annual report you filed for the
fiscal year ended December 31, 2004. Revise accordingly.
28. Please supplementally explain what you mean by "fund-raising efforts"
that Mr. Painter may provide to your company.
Certain Relationships and Related Transactions, page 33
29. Please revise to clarify the dates of the "private placement" and
"offering" as it relates to the agreement between MPE LLC and AVP. In addition,
please disclose this transaction in the list of recent sales of unregistered
securities and include the required information pursuant to Item 701 of
Regulation S-B.
Description of Securities, page 36,
Common Stock, page 36
30. You state that you are currently authorized to issue 40 million shares
of common stock and 2 million shares of preferred stock. However, we note in the
certificate of incorporation that is listed as an exhibit to this registration
statement that you only have 20 million shares of common stock and 1 million
shares of preferred stock authorized. If the certificate of incorporation has
been updated, please file it as an exhibit to this registration statement. If
not, please revise to clarify the discrepancy as well as discuss the legal
issues with your outstanding stock that would not have been duly authorized.
31. We note shares of Series B Preferred Stock have preference over the
common stock. Please revise to clarify here if the Series A Preferred Stock has
dividend preference over common stock.
Series A Preferred Stock, page 37
32. We note that the Series A Preferred Stock will convert automatically
into your common stock once you amend your certificate of incorporation to
increase your authorized common stock. Consider including this in your risk
factor that addresses the effect on your share price once a large number of
shares are available to the public, if material.
Selling Stockholder, page 53
33. Consider including a row following the selling stockholder table
totaling the various columns due to the large number of selling stockholders.
34. Refer to the selling stockholder table. Please advise why the
"percentage of outstanding shares beneficially owned before offering" exceed
100%.
35. We note that you discuss in the footnotes to the table the individual
lock-up arrangements with various selling stockholders and Maxim. Please advise
whether Maxim is participating in the resale of the common stock for the selling
stockholders. In addition, please file the lock-up agreements with the specific
selling shareholders as an exhibit to this registration statement.
36. Disclose that all the selling stockholders maybe deemed underwriters.
37. Please revise the first full paragraph on page 40 to clarify that any
broker-dealers who participate in the distribution of the common stock "are"
underwriters.
38. Supplementally advise us as to whether any selling stockholders are
broker-dealers or affiliates of broker-dealers.
39. Please identify the natural person or persons who have voting and/or
investment control over any selling stockholders. See Rule 13d-3 and
interpretation 4S of the Regulation S-K section of the March 1999 supplement to
the publicly available telephone interpretation manual and interpretation 1.60
of the July 1997 publicly available telephone interpretation manual.
Available Information, page 48,
40. We note that statements contained in this prospectus regarding the
contents of any contract or any other document are not necessarily complete. You
may refer readers to the related documents for a more complete reading or
understanding, but should not infer that the prospectus does not contain all
material information from those documents, even if summarized, or that the
statements made in the prospectus are in any way inaccurate. Please revise
accordingly.
41. Supplementally explain the nature of "certain portions have been
omitted in accordance with the rules and regulations of the SEC." The prospectus
should contain all material information. Please revise to clarify this point
here.
Subsequent Event, page F-7
42. You state that the Series A Convertible Preferred Stock will convert
automatically into common stock upon authorization of a sufficient amount of
common stock. It appears that the authorization of sufficient common shares is
assured based upon relative ownership and voting interests. Please revise the
filing to clarify.
Pro-forma Net Loss per Common Share, page F-14
43. We note the disclosures included on page F-I4. However, please also
revise to disclose your calculation of weighted average shares. Your calculation
should disclose the number of outstanding options, warrants and shares issuable
upon conversion of outstanding convertible debt or preferred stock, that could
potentially dilute basic earnings per share in the future, but that were not
included in the computation of diluted earnings per share for the periods
presented in your financial statements because their impact was anti-dilutive
for the periods presented in your financial statements. Refer to the
requirements of paragraph 40 of SFAS No_128.
Part II
Item 26, Recent Sales
44. Please revise this section to clearly provide the facts relied upon to
make the exemption under Section 4(2) of the Securities Act available for all of
the transactions listed in this section. For example, it is not clear how the
private investors were identified for the offerings that took place during the
months of June through August 2004 as well as in the private placement on
February 28, 2005. We also note in Othnet's annual report filed on August 13,
2004 that Othnet disclosed the private financing required as a condition to the
merger. As such, it is not clear whether this disclosure assisted in the
solicitation of investors for the private placements. Please supplementally
advise.
45. We note on page 9 that you have issued a number of options under your
stock option plans. Please disclose all issuances of options that have occurred
within the past three years and describe the transaction and the type and amount
of consideration received. In addition, indicate the exemption you relied upon
from registering the stock options.
Item 27, Exhibits
46. You incorporated by reference to the Merger Agreement dated as of June
29, 2004 filed as an exhibit to the annual report filed by Othnet for the year
ended April 30, 2004. However, it does not appear that the Merger Agreement was
filed with the Form 10-K on April 13, 2004. Please file this Merger Agreement as
an exhibit to this registration statement or supplementally advise.
47. We note that Othnet and AVP amended the merger agreement in November
10, 2004. Please file the November 10, 2004 supplement to the Merger Agreement
as an exhibit to the registration statement
Other
48. The financial statements should be updated, as necessary, to comply
with Rule 3-12 of Regulation S-X. The financials may be updated by adding an
additional column to your financial statements representing the March 31, 2005
end of quarter balances.
49. Please provide a currently dated signed consent from the independent
public accountant in the amendment.
Signatures
50. The registration statement must be signed by your principal financial
officer. See Instructions to Signatures on Form SB-2.
Closing
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 supplemental
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.
Notwithstanding our comments, in the event the company requests
acceleration of the effective date of the pending registration statement, it
should furnish a letter, at the time of such request, acknowledging that:
o should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
o the action of the Commission or the staff, acting pursuant to delegated
authority, in declaring the filing effective, does not relieve the company
from its full responsibility for the adequacy and accuracy of the
disclosure in the filing; and
o the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the Commission
or any person under the federal securities laws of the United States.
In addition, please be advised that the Division of Enforcement has access
to all information you provide to the staff of the Division of Corporation
Finance in connection with our review of your filing or in response to our
comments on your filing.
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 Juan Migone at (202) 551-3312 or Margery Reich at (202)
551-3347 if you have questions regarding comments on the financial statements
and related matters. Please contact Mathew C. Bazley at (202) 551.3382, or me,
at (202) 551-3348 with questions.
Sincerely,
Jennifer G. Williams
Special Counsel
cc: Via Facsimile: (212) 214-0686
David C. Fischer
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154