Michael S. Krome, Esq.
Attorney-at-Law
8 Teak Court
Lake Grove, New York 11755
Tel.: (631) 737-8381
Fax: (631) 737-8382
email: mskrome@optonline.net
Cheryl A. Krome
Ronald Krome
Legal Assistants
August 22, 2005
John Reynolds, Assistant Director
Office of Emerging Growth Companies
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Reference: Xiom, Inc.
Registration Statement on Form SB-2
Filed: May 6, 2005
File No. 333-123176
Dear Mr. Reynolds:
Enclosed herewith for filing on behalf of Xiom, Inc. (the "Company"),
pursuant to the Securities Exchange Act of 1933, as amended, please find the
Company's Amendment No. 2 to its Registration Statement on Form SB-2 ("Amendment
No. 2"), marked to show the changes to the Company's Registration Statement on
Form SB-2, as filed with the Securities and Exchange Commission on May 6, 2005.
We received your letter of July 5, 2005, containing comments prepared by
the Staff of the Division of Corporation Finance of the Securities and Exchange
Commissions which pertain to the Registration Statement, and we hereby submit
the following responses to the numbered comments.
General
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Comment
1. Disclosure indicated that you were spun-off from Humana Trans
Services Corp. f/k/a Thermaltec International Corp in July 2001.
Please disclose the purpose of the spin-off and provide an analysis
addressing the exemption from registration that Humana Trans Service
Corp relied upon in connection with the spin-off. Please consult SEC
Staff Legal Bulletin No. 4 (CF), September 16, 1997, located at
http://sec.gov/interps/legal/slbcf4.txt for the Divisions views
regarding section 5 of the Securities Act and spin-offs.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 2 of 23
Response
The transaction with Xiom Corp. (then Panama Industries Ltd.) was intended
to be under and fulfill the requirements of SEC Staff Legal Bulletin No. 4
(CF), September 16, 1997 ("SEC Staff Legal Bulletin"). Specifically, the
SEC Staff Legal Bulletin set out five specific items which when followed
allowed a company subject to the reporting requirements of Section 13 or
15(d) of the Securities Act of 1933, as amended, to "spin-out" a
subsidiary, without filing a registration statement with the Securities
and Exchange Commission. The Staff Bulletin stated five conditions to be
met:
* the parent shareholders do not provide consideration for the
spun-off shares;
* the spin-off is pro-rata to the parent shareholders;
* the parent provides adequate information about the spin-off
and the subsidiary to its shareholders and to the trading
markets;
* the parent has a valid business purpose for the spin-off; and
* if the parent spins-off "restricted securities," it has held
those securities for at least two years.
We believe that the transaction complied with all five items, as follows:
(1) There was no consideration paid for the spun off shares by the parent
company. (2) The spin off was pro-rata to all shareholders then
shareholders of the parent company. (3) At the time of the spin off the
parent company believed that sufficient information was available to the
pubic to comply with the Staff Legal bulletin, from the reported filings
of the parent company. (4) The purpose of the spin-off was for a valid
business purpose. The business activities of Xiom Corp. were outside the
sphere of the proposed acquisition of the parent company. The combination
of the two separate businesses would have been diametrically opposed and
would have caused integration problems with the employees, management of
the subsidiaries and accounting issues. (5) Finally, the parent company
did comply with the fifth and final requirement in that all of the
securities spun off were "restricted securities" and the parent was not
required to register the spin-off as it had complied with the initial four
items.
Comment
2. Tell us about Mr. Mazzone's affiliation with Steam Cleaning USA,
Inc. and the business nature of this entity. We note that the
company is now called Humana Trans Service Corp. We may have further
comment.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 3 of 23
Response
Mr. Mazzone was the President of TTIH at the time of the spinout. He
resigned as Sole Officer and Director of TTIH on November 1, 2001.
Thereafter, when the targeting merger candidate for TTIH fell through,
TTIH located a potential new target for acquisition and changed its name
to Steam Clean USA, Inc. on or about August 15, 2002. On July 1, 2003,
Steam Clean USA, Inc., acquired Humana Trans Services Group, Ltd. At this
point Mr. Mazzone was invited to become Chairman of the Board of
Directors. He served in that position until January 2004, when he resigned
as Chairman but remained as a Director and until April 5, 2004, when he
resigned from the Board entirely.
Prospectus Cover Page
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Comment
3. For the primary offering, please provide the disclosure required by
Item 501(a)(9) of Regulation S-B.
Response
We have inserted the following paragraph on the Prospectus Cover Page:
"The shares offered by the Company are being offered without an
underwriter, on a best efforts basis, with no minimum purchase
requirement. There will be no escrow of funds from the sale of the shares
offered by the Company. The shares offered by the Company are being
offered at $3.00 per share. There are no underwriting discounts. The total
maximum amount of the offering by the Company is $1,500,000 based on
500,000 shares sold at $3.00 per share."
Comment
4. Please limit your disclosure to the information required by Item 501
of Regulation S-B. We believe you could safely eliminate disclosure
referencing use of proceeds and payment of offering expenses.
Response
We have removed all references to the use of proceeds and payment of
offering expenses from the Prospectus Cover Page.
Comment
5. You are reminded that the selling shareholders must sell at a
stated, fixed price until the securities are quoted on the OTC
Bulletin Board and thereafter, the selling security holders may sell
at prevailing market prices or privately negotiated process. This
includes the shares registered for resale in connection with the
issuance of common shares upon the exercise of outstanding common
stock purchase warrants. See Item 16 of Schedule A to the Securities
Act of 1933
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 4 of 23
Response
We are aware that the selling shareholders, and the shares
registered for resale in connection with the issuance of common
shares upon the exercise of outstanding common stock purchase
warrants, must sell at a stated, fixed price until the securities
are quoted on the OTC Bulletin Board and thereafter, the selling
security holders may sell at prevailing market prices or privately
negotiated process. That price would be $3.00 per share. It is our
belief that none of the current selling shareholders are
attempting to sell their shares at any other price at this time.
Prospectus Summary, page 3
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Comment
6. Please add disclosure addressing the company's going concern
qualification and its accumulated deficit.
Response
We have added the following disclosure to the Prospectus Cover Page:
"ABILITY OF COMPANY TO CONTINUE AS A GOING CONCERN
In the 2004 fiscal year, Xiom Corp. reported an operating loss and net
loss. The independent auditors' report with respect to Xiom Corp's 2004
financial statements stated that Xiom Corp.'s recurring losses from
operations, working capital deficit and limited sources of additional
liquidity raise substantial doubt about Xiom Corp.'s ability to continue
as a going concern. The financial statements as of and for the year ended
September 30, 2004, were prepared on a going concern basis, which assumes
continuity of operations and realization of assets and liquidation of
liabilities in the ordinary course of business. Management recognizes that
the continuation of Xiom Corp. as a going concern is dependent upon the
achievement of profitability, positive cash flow from operations and the
generation of adequate funds to meet its ongoing obligations. In the first
quarter of 2005, Xiom Corp. increased revenues through increased sales.
Xiom Corp. continues to seek additional liquidity to improve its working
capital position through the Self Offering conducted herein, and the
possible exercise of the common stock warrants also contained in this
registration statement. However, no assurance can be given that the
Offering will be successful or that Xiom Corp. will be able to generate
net income in the future. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial
statements and notes thereto presented elsewhere in this Prospectus."
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 5 of 23
Comment
7. Please disclose your internet address and disclose, if true, that he
information contained on your website does not constitute part of
your prospectus.
Response
We have included the following disclosure on page 3, under the heading
"About Our Company" "Our website is http://www.xiom-corp.com. Any
information contained on our website should not be considered as part of
this prospectus. The information contained on our website is used for
sales information to prospective customers."
Summary Financial Information, page 4
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Comment
8. Please revise your disclosure to include comparable information
through the date of the interim financial statements.
Response
We have included the requested comparable information through the date of
the interim financial statements, March 31, 2005.
Risk factors, page 5
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Comment
9. In the introductory paragraph, clarify that you disclose all
"material" risks here.
Response
We have added the phrase "we are disclosing all material risks herein" in
the introductory paragraph, second sentence, as requested.
Comment
10. Revise your risk factor subheadings to ensure that your subheadings
clearly reflect the material risk disclosed in the narrative. For
example, two subheadings on page 8 merely read "No assurances" and
"Competition." Please revise your subheadings so that they
adequately describe the specific risk that results from the stated
fact. To assist you in this regard, we refer you to "A Plain English
Handbook - How to Create Clear SEC Disclosure Documents, : issued by
the Officer of Investor Education and Assistance, which is available
on our website at www.sec.gov and the updated version of Staff Legal
Bulletin No. 7, dated June 7, 1999.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 6 of 23
Response
We have revised the subheadings of the risk factors to clearly reflect the
material risk being disclosed in the narrative.
Comment
11. Please add a risk factor addressing the company's going concern
qualification.
Response
We have added the following as the second risk factor: "Our independent
registered public accounting firm issued a report for the year ended
September 30, 2004 that contained a "going concern" explanatory paragraph.
Our independent registered public accounting firm issued a report on their
audit of our financial statements as of and for the year ended September
30, 2004. Our notes to the financial statements disclose that Xiom Corp.'s
cash flows have been absorbed in operating activities and Xiom Corp. has
incurred net losses from inception and has a working capital deficiency.
In the event that funding from internal sources or from public or private
financing is insufficient to fund the business at current levels, we will
have to substantially cut back our level of spending which could
substantially curtail our operations. The independent registered public
accounting firm's report contains an explanatory paragraph indicating that
these factors raise substantial doubt about our ability to continue as a
going concern. Our going concern uncertainty may affect our ability to
raise additional capital, and may also affect our relationships with
suppliers and customers. Investors should carefully read the independent
registered public accounting firm's report and examine our financial
statements."
Comment
12. The first risk factor on page 5 should be updated through the
current date, or alternatively you could delete the date from the
statement - e.g. - "Through December 31, 2004, we have generated
limited revenue..."
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 7 of 23
Response
We have amended the first sentence of the first risk factor on page 5 to
read as follows:
"We have, in our history, generated limited revenues from
operations, have incurred substantial expenses and have sustained
losses."
Comment
13. Add risk factor disclosure that covers the industry in which your
company operates.
Response
We have added the following risk factor with respect to the industry our
company operates:
"Operations and our Technology and Products We provide equipment and
material for the spraying of steel and other metal surfaces. Our
business is dependant upon the continued need for these types of
services. Our equipment has been specifically developed for the
application of the coatings we provide. There is no assurance that
the end users we target will continue to require and seek our
services. While we believe that our process and coating are superior
to most, if not all others available, there is no way to foresee if
another process is not developed by a competitor. In addition, we
are dependent upon the continued need for steel and other metal to
be coated to protect it from weathering, corrosion and other wear
and tear. Currently, our major customers are anticipated to be
governments and municipalities interested in treating exposed steel
and metal surfaces, such as bridges, and other support items. It is
anticipated, but we can not be certain that these needs will
continue to be required to be met. Furthermore, while we seek to
develop mew uses and applications for our technology and products,
we can not be assured of (a) finding new uses for our technology and
products, and (b) being able to introduce and interest customers and
other industries in our technology and products."
Comment
14. Please revise your risk factors to so that each discusses a material
risk to your potential shareholders. Some of your risk factors are
too broad and generic and should be revised to state the material
risk that is specific to Xiom Corp. As a general rule, a risk factor
is probably too generic if it is readily transferable to other
offering documents or describes circumstances or factual situations
that are equally applicable to other similarly situated businesses.
The following risk factors should be revised, deleted or moved to
another section of the prospectus as appropriate:
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 8 of 23
a. "We are dependent on our key personnel...."
b. "We will need additional capital to finance...."
c. "Our directors have limited liability...."
Response
We have revised the indicated risk factors to make them specific to this
offering, and have re-moved the third risk factor and inserted the text in
the section of the registration statement dealing with "Certain Provisions
of the Certificate of Incorporation and By-Laws"
Comment
15. The last sentence of the second risk factor speaks to your marketing
program yet the risk factor subheading addresses your dependence on
key personnel. Revise as appropriate.
Response
We have removed the last sentence from this risk factor. At this point in
time, the Company has no intention of conducting a marketing program.
Comment
16. In the eighth risk factor, clarify your reference to "Medivisor,
Inc."
Response
We have removed the reference to Medivisor, Inc. from this risk factor and
corrected it to read "Xiom Corp.
Comment
17. Disclosure in the tenth risk factor references "franchise
opportunities." Disclose or tell us what you mean by "franchise
opportunities" and how franchises impact your operations. We may
have further comment.
Response
We have removed the sentence with the reference to `franchise
opportunities." The Company is not in the franchise business, nor does it
intend to franchise any operations, sales or marketing.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 9 of 23
Comment
18. The disclosure in the second full paragraph on page 8 is repetitive of
disclosure contained elsewhere on page 8. Revise as appropriate.
Response
We have removed the second full paragraph on page 8.
Comment
19. In the eleventh risk factor, clarify your use of the term "network
infrastructure."
Response
We have removed the first sentence of this risk factor. It was
inapplicable to this offering.
Forward-Looking Statements, page 8
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Comment
20. Refer to your statement that you "make no commitment to update any
forward-looking statement or to disclose any facts, events or
circumstances after the date of this document that may affect the accuracy
of any forward-looking statement. Please confirm that you are aware of
your responsibility to make full and prompt disclosure of material facts,
both favorable and unfavorable, regarding your financial condition, and
that this responsibility may extend to situations where management knows
or has reason to know that previously disclosed projections no longer have
a reasonable basis. See Item 10(b)(3) of Regulation S-K.
Response
The Company, and its management, is aware of their responsibility to make
full and prompt disclosure of material facts, both favorable and
unfavorable, regarding your financial condition, and that this
responsibility may extend to situations where management knows or has
reason to know that previously disclosed projections no longer have a
reasonable basis. We have added to the sentence in the disclosure the
following: "other than as required."
Use of Proceeds, page 9
- -----------------------
Comment
21. Please provide the full disclosure required by Item 504 of
Regulation S-B. We may have further moment after reviewing your
revised disclosure.
Response
We have updated our disclosure as required by Item 504 of Regulation S-B.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 10 of 23
Management's Discussion and Analysis or Plan of Operation, page 10
- ------------------------------------------------------------------
Comment
22. We note a limited discussion of your plan of operations. Please
revise to provide a detailed plan of operations. Substantial
revision of this section is necessary in order for you to discuss,
with detailed specificity, the steps you intend to take in
furtherance of your plan of operations. Please provide a potential
investor with comprehensive disclosure of the direction in which you
plan to take your company in the next twelve months of operation.
You should focus your discussion in monthly or quarterly increments
and discuss the steps necessary for; the costs associated with, and
projected timeframes for achieving sustained first revenues.
Currently you do not identify any specific milestones nor do you
discuss the ways in which you intend to generate sustained revenue.
We may have additional comment after reviewing your revised
disclosure.
Response
We have updated the Management's Discussion and Analysis or Plan of
Operations to indicate the business plan of the Company for the next
twelve months.
Comment
23. Update the disclosure in the second paragraph since the second
quarter is coming to a close.
Response
We have updated the second paragraph and removed any reference to any
specific quarter.
Comment
24. Please revise your disclosure to include a discussion of your
critical accounting policies and estimates. This disclosure should
not merely repeat information presented in the financial statements,
but rather should provide investors with insight into matters
requiring significant estimates or judgment which may have a
material impact on your financial statements. Refer to the
Commission's guidance concerning critical accounting estimates and
revise accordingly. This guidance is available on the SEC website at
www.sec.gov/rules/interp/33-8350.htm. Please see section V.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 11 of 23
Response
We have added the last paragraph to the MD&A that discloses the
percentage-of-completion method of accounting for recording revenues and
related costs for long-term, fixed-priced, contracts, as defined.
Comment
25. Please provide a more detailed discussion of your short and
long-terms liquidity.
Response
We have updated the MD&A which more fully details the short and long-term
liquidity of the Company.
Business of the Company, page 10
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Comment
20. Please thoroughly revise your disclosure in this section and throughout
your registration statement to clarify the current status of your
operations, proposed business operations, products and services. Your
current description of your business comprises a largely technical
discussion of "coatings" and "TDPC technology" and your disclosure, as a
result, is vague, difficult to comprehend, and does little to provide a
potential investor with a clear sense of your business, the commercial
feasibility of your product, and the ability of your company to survive in
the short and long terms. Your disclosure in this section should be
substantially revised to clearly describe your company's business in the
manner required by Item 101(b) of regulation S-B. To the extent you
discuss what appears to be your sole product, the XIOM 1000 polymer
multicoat spray system, please provide specific disclosure about its
manufacturing status and the timeframes in which you anticipate bringing
the product to market. We may have further comment after reviewing your
revised disclosure.
Response
We have substantially revised the description of the Business of the
Company, and removed the discussion of the technology and related items
and placed a more appropriate section in its place.
Comment
26. Some of the disclosure here is too technical to be understood by an
ordinary investor unfamiliar with your industry. We direct your
attention, without limitation, to the following terms of phrases:
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 12 of 23
o Biocidal additives
o Nylon co-polymers (Platamid)
o Polyetheramide (Pebax)
o Polyethylene
o Process aid materials
o Surface morpology
Response
We have removed all technical discussion from the registration statement,
as we agree that it is to technical to be understood by an ordinary
investor.
Comment
27. Expand your disclosure relating to distributorships. Currently you
merely disclose that distributor are located in New York, Texas,
Massachusetts, South American and Africa
Response
We have updated the disclosure regarding distributorships as follows: "Our
active distributors are located in Massachusetts, New York, New Jersey and
Canada. Distributors who are becoming active are located in Africa,
Mexico, Colombia (SA), Minneapolis, MN, California, Rhode Island and
Texas. Our distributors work on a commission basis to sell our technology
and products."
Governmental Regulations, page 13
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Comment
28. If applicable, please provide the disclosure required by Item
101(b)(11) of Regulation S-B.
Response
We are not subject to any environmental laws of the Federal, State or
local governments. We have added the following to the section:
"We estimate that there is no material cost to comply with any
environmental laws of the Federal, State or Local governments. Any
compliance, we believe that any cost and/or compliance is the
responsibility of the end user."
Management, page 14
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Comment
29. Please disclose each person's term of office as a director and the
period during which the person has served. See Item 401(a)(3) of
Regulation S-B.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 13 of 23
Response
We have added to following to the disclosure:
"Each Director is elected to serve a one year term, until the next
annual meeting of the shareholders or until their successor is
elected (or appointed) and qualified."
Comment
30. For the last five years or for any longer period of time that you
voluntarily cove, present the following for each member of
management"
- the title of each position held;
- the duties of each position if not clear form the title;
- the beginning and ending dates by month and year of each position;
- the name of the entity with whom the position was held; and
- the activities of the entity.
Response
We have revised the information with respect to each member of management.
Comment
31. Please name all promoters of the company. Refer to the definition of
"promoter" in Rule 405 of Regulation C.
Response
Pursuant to the definition of "promoter" under Rule 405, all persons that
fit the definition are as follows:
Andrew B. Mazzone
Thomas Gardega
Certain Relationships and Related Transactions, page 15
- -------------------------------------------------------
Comment
32. On pages 15-16, there are numerous typographical errors in the
information presented. For example, may of the numbers are missing
one zero, e.g. 150,00 shares. Also in the past paragraph, the two
issuances add to 850,000 shares, not 800,000.
Response
We have corrected the numerous typographical errors on pages 15-16
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 14 of 23
Comment
33. Please provide the disclosure required by Item 404(d) of Regulation
S-B
Response
We have updated the disclosure to comply with Item 404(d) of Regulation
S-B, to include the information with respect to the issuance of shares to
DRB Consulting, Inc. and Michael Krome.
Comment
34. Expand the disclosure relating to the "certain technology rights"
referenced in the transaction with Mr. Mazzone.
Response
We have expanded the disclosure with respect to the "certain technology
rights" obtained from Mr. Mazzone, as follows:
"These certain rights included the creation of certain proprietary
technologies and applications from Mr. Mazzone's experience in the
coating industry which enhanced the patents received from Mr.
Gardega."
Comment
35. Expand the disclosure relating to the "certain Patent rights"
referenced in the transaction with Mr. Gardega.
Response
We have expanded the disclosure with respect to "certain Patent rights"
obtained from Mr. Gardega, as follows:
"These patent rights are as contained in the patent descriptions
filed as Exhibits to the Registration statement and with the United
States Patent and Trademark Office."
Principal Stockholders, page 16
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Comment
36. Please update the disclosure in this section as of the most recent
practicable date.
Response
We have updated this section to indicate the most practicable date of
August 15, 2005.
Comment
37. Tell us the business nature of Alpha Advisors.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 15 of 23
Response
Alpha Advisors, LLC is a consulting limited liability corporation formed
to provide services to companies that wished to become publicly traded,
that were already publicly traded and were in need of financial,
management or business re-organization services. The company also attempts
to locate short and long term financing and/or investors for companies
that need capital.
Dilution, page 17
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Comment
38. Please revise the disclosure to correct what appears to be a
typographical error in the first sentence. It appears that the
tangible nook value per share should be $.01 rather than $(.01) as
currently indicated.
Response
The tangible book value should in fact read $.01, and it has been
corrected.
Offering by Selling Shareholders, page 18
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Comment
39. For all entities listed that are not natural persons, please
identify the natural persons with voting or investment control.
Response
We have indicated the natural person with voting or investment control for
all entities that are not natural persons.
Comment
40. Please disclose how you propose to reflect any changes in selling
security holders.
Response
We have added the following to the disclosure: "Changes in the Selling
Shareholders will be provided by post-effective amendments filed with the
Securities and Exchange Commission."
Description of Securities, page 19
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Comment
41. Please disclose the basis for the statement that all outstanding
shares of common stock are fully paid and non-assessable, e.g. court
order, opinion of counsel, etc.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 16 of 23
Response
We have removed the phrase "fully paid and non-assessable" from the
disclosure.
Plan of Distribution, page 19
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Comment
42. How do you intend to sell the shares covering the primary offering?
If your officers and directors intend to sell the offering, please
name those officers and directors who will be offering the shares on
behalf of the company. Also, advise the staff supplementally of the
basis of each person's participation in offering the securities
without registration as broker-dealer. If Exchange Act Rule 3a4-1
will be relied upon, explain supplementally how each element of the
Rule will be satisfied as to each person.
Response
It is the intention of the Company to sell the shares being offered for
sale by the Company only by its Officers and Directors, that being only
Mr. Mazzone and Mr. Gardega. No other person or entity is expected, at
this point in time, to be permitted to offer these shares for sale to
investors. With respect to Rule 3a4-1, each element of subsection (a) is
satisfied as follows:
(1) Neither person is subject to any statutory disqualification at the
time of the participation;
(2) Neither person is being compensated in connections with his
participation by the payment of commissions or other remuneration
based either directly or indirectly on transaction in the
securities;
(3) Neither person at the time of his participation an associated person
of a broker or dealer; and
(4) Each person meets the requirements of (a)4(i), (ii) or (iii) in as
much as (ii) the associated person meets all of the following
conditions:
A. The associated person primarily performs, or is intended
primarily to perform at the end of the intended offering,
substantial duties for or on behalf of the issuer other wise
in connection with transactions in securities; and
B. The associated person was not a broker or dealer, or an
associated person of a broker or dealer, within the preceding
12 months; and
C. The associated person does not participate in selling an
offering of securities for any issuer more than once every 12
months....
Each of the persons mentioned complies with the requirements set
forth above.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 17 of 23
Experts, page 23
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Comment
43. Please revise the disclosure to correct the dates indicated to be
consistent with the dates of the audited financial statements
(September 30, 2004 and 2005).
Response
We have revised the disclosure to be consistent with the dates of the
audited financial statements (September 30, 2004 and 2003).
Financial Statements
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Comment
44. Please provide a currently dated consent in any amendment and ensure
the financial statements are updated as required by Item 310(g) of
Regulation S-B.
Response
We have obtained a currently dated consent from our auditor and will
provide same in this and any future amendment(s) and will ensure the
financial statements are update as required by Item 310(g) of Regulation
S-B.
Audit report, page F-2
- ----------------------
Comment
45. The audit report does not appear to be signed by the independent
auditor. Please revise the filing accordingly to include a signed
audit report.
Response
The audit report was, and will be signed by the independent auditor. A
manually signed copy will be kept by the issuer and the counsel for the
issuer.
Statement of Operations, page F-4
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Comment
46. Based on your disclosure on page 15, it appears that your officers
are not currently compensated. Please tell us approximately how much
time was incurred by the executive officers on company business
during the years ended September 30, 2004 and 2003, and the six
months ended March 31, 2005. Please note that all costs of doing
business should be included in the registrant's financial
statements, including expenses incurred on its behalf by its major
shareholders. Where services are preformed for the company by its
major shareholders at no charge, we believe that the substance of
such transactions is the payment of the company's expenses through a
capital contribution by the shareholder. See Staff Accounting
Bulletin Topics 1.B.1 and 5.T. Please revise the financial
statements for each period accordingly.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 18 of 23
Response
The executive officers/major shareholders devoted full time services to
the Company for the fiscal years ended September 30, 2004 and 2003 and for
the six months ended March 31, 2005. The value of such services is
estimated to be $60,000 annually for each officer/major shareholder. As a
result, the financial statements have been revised to properly reflect
this expense as "Additional Paid-In Capital" for each period presented.
Statement of Stockholders' Equity (Deficit), page F-5
- -----------------------------------------------------
Comment
47. We note the issuance of shares for services during the year ended
September 30, 2004. Please disclose the material terms of these
issuances in the footnotes to the financial statements, including
how the fair value of the issuances was determined in accordance
with FAS 123.
Response
We have disclosed the material terms of these issuances in the footnotes,
including how the fair market value was determined in accordance with FAS
123.
Note 1 - Summary of Significant Accounting Policies, page F-7
- -------------------------------------------------------------
Comment
48. We note your disclosure regarding your patented industrial based
thermal spray technology. Please clarify how revenue is currently
being generated from this technology. Also please expand your
disclosure regarding revenue recognition to include how loss
contracts are accounted for. Lastly, please tell us whether you have
experienced material contract losses to date.
Response
We have updated the footnote disclosure as requested. Additionally, we
have experienced no material contract losses to date.
Comment
49. We note your disclosure that depreciation is provided using both the
straight-line and accelerated methods over the estimated useful
lives of the assets. If the accelerated method is used only for tax
purposes, please delete the reference to the accelerated method from
your disclosure. Alternatively, if both methods are used for
external reporting purposes, please expand your disclosure to
indicate which method is used for each individual category of fixed
assets.
Response
We have deleted reference to the accelerated method from our disclosure.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 19 of 23
Comment
50. We note that your financial statements do not include any
disclosures regarding the impact of recently issued accounting
pronouncements. Please consider the potential impact of recently
issued accounting standards, including FAS 123R, and revise your
disclosure accordingly. See Staff Accounting Bulletin Topic 11.M.
Response
We have reviewed the disclosure requirements regarding the impact of
recently issued pronouncements and have updated our disclosure as
appropriate.
Note 4 - Patents Pending, page F-9
- ----------------------------------
Comment
51. We note your disclosure regarding the patents. Please tell us why
the patents are not being amortized over the estimated useful lives
in accordance with FAS 142. Please refer to paragraph 11 and
Appendix A of AS 142 and revise the financial statements
accordingly.
Response
We have updated the financial statements to include amortizing the patents
over their estimated useful lives in accordance with FAS 142.
Note 5 - Retainage receivable, page F-9
- ---------------------------------------
Comment
52. We note your disclosure regarding the retainage receivables. As of
the most recent balance sheet date, please disclose the amount of
the receivable that is expected to be collected during the each
year, if known. If not known, please state this in your disclosure.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 20 of 23
Response
We have updated the disclosure as requested.
Note 7 - Sales to Major Customers, page F-9
- -------------------------------------------
Comment
53. We note your disclosure that one major customer accounted from
substantially all of your revenue. Accordingly, your agreements with
this customer appear to be material contracts as outlined in Item
601 of Regulation S-B. Please file the related agreements, including
the contract extension described in Note 11, as exhibits to your
amended filing.
Response
We have included the contract renewal as an exhibit in this amendment.
Note 12 - Going Concern, page F-10
- ----------------------------------
Comment
54. Please expand Note 12 to discuss the anticipated source of funds to
meet your cash requirements for at least twelve months following the
date of the financial statements being reported on. Also revise the
MD&A to discuss your short-term and long-terms liquidity
requirements and how you anticipate meeting those needs. Refer to
Financial Reporting Codification 607.02 and AICPA Codification of
paragraphs 10 and 11 of Auditing Standard Section 341.
Response
We have expanded Note 12 and updated the MD&A as requested.
Related party Transactions
- --------------------------
Comment
55. We note the line titled shareholder loans on the balance sheet.
However, there does not appear to be any footnote disclosure
regarding these loans. Please revise the financial statements to
disclose all material terms of the shareholder loans, including the
interest rate and whether the obligations are secured. Also, please
disclose the conversion of a portion of the shareholder loans to
common stock during the year.
Response
We have added the footnote disclosure as outlined, including material
terms and conversion to common stock during the year.
Comment
56. We note your disclosures on pages 15-16 regarding the issuance of
shares to various affiliates. Please revise the financial statement
to disclose any related party transactions which are not already
disclosed. Also, please ensure that your disclosure describes the
nature of the related party relationships with DRB Consulting and
James W. Zimbler. For the purpose of the financial statement
disclosures, you may elect to omit the names of the related parties,
as long as the nature of the relationships and transactions is
clearly disclosed.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 21 of 23
Response
We have updated the disclosures as appropriate. Although DRB Consulting
and James W. Zimbler are not related parties to the Company as defined, we
have included references to the transactions as appropriate.
Unaudited Financial Statements for the Six Months ended march 31, 2005,
- -----------------------------------------------------------------------
page F-11
- ---------
Comment
57. Please revise the financial statements to be complaint with all the
requirements of Item 310(b) of Regulation S-B. Specifically, we note
the following:
o The statement of operations and statement of cash flow should
be revised to include the comparable period in the prior year.
o The heading for the statement of cash flows references the
incorrect periods.
o The financial statements must include all adjustments which in
the opinion of management are necessary in order to make the
financial statements not misleading. Note that an affirmative
statement to this effect must be included in the interim
financial statements.
o Typically, interim financial statements include disclosures
regarding their basis of presentation. We believe these
disclosures are advisable because interim financial statements
do not include all of the disclosures required to complete
financial statements prepared in accordance with generally
accepted accounting principles.
Response
We have revised the interim financial statements to be compliant with the
requirements of Item 310(b) of Regulation S-B.
Note 3 - Stock Option Grants, page F-15
- ---------------------------------------
Comment
58. We note your disclosure regarding the option grants. Please confirm
whether the exercise price of the options were equal to the market
value of the company's common stock on the date of the grant. Also,
in regards to the options granted to the consultant, please tell us
whether there are any vesting restrictions or future performance
requirements and explain to us how you have accounted for them.
Revise the financial statements to disclose the compensation expense
relating to the issuance and the major assumptions used to value the
award.
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 22 of 23
Response
We have updated the financial statement disclosure as requested
Part II - Information Note Required in Prospectus
Recent Sales of Unregistered Securities
- ---------------------------------------
Comment
59. On Page 27, reference is made to "Medivisor, Inc." Please clarify.
Response
The reference to "Medivisor, Inc.," was a mistake. It has been replaced
with "Xiom, Inc."
Comment
60. Please provide Item 26 disclosure for the past three years, Refer to
Item 701 of Regulation S-B
Response
We have updated Item 26 to include all sales of unregistered securities
for the past three years.
Signatures
- ----------
Comment
61. The date on the signature block on page 29 is incorrect - April 18,
2005. Please ensure that the dates for all signatures are correct
Response
We have corrected the date of April 18, 2005, and ensured all dates for
signatures are correct.
Comment
62. Please have the principal accounting officer and principal financial
officer sign in these capacities. Refer to Instruction 1 for
signatures, Form SB-2/
Michael S. Krome, Esq.
Response Letter to Securities and Exchange Commission Comment letter of July 5,
2005 for Registration Statement on Form SB-2, filed May 6, 2005 for Xiom, Inc.
August 23, 2005
Page 23 of 23
Response
We have indicated that the principal accounting/financial officer has
signed the registration statement.
This letter responds to all comments contained in your letter of July 5,
2005. In order to assist in your review of the latest filing, I have enclosed
herewith, courtesy copies of the Amendment No. 2, marked to show the changes
from the initial filing, for your convenience. We are requesting that your
office expedite the review of this amendment as much as possible.
If you have any questions, please do not hesitate to call me at
631-737-8381.
Very truly yours,
Michael S. Krome
cc: Mr. Andrew Mazzone, President
Xiom, Inc.