THE O'NEAL LAW FIRM, P.C.
668 North 44th Street
Suite 233
Phoenix, Arizona 85008
(602) 267-3855 (602)
267-7400 (fax)
E-mail: billo@sunncomm.com
November 4, 2004
Pamela Howell
Securities and Exchange Commission
450 Fifth Street, N.W.
Mail Stop 0511
Washington, D.C. 20549
Re: M.E.R., Inc.
Registration Statement on Form SB-2
File No. 333-119223
Filed September 23, 2004
Dear Ms. Howell:
We are writing in response to your comment letter dated October 22, 2004 in
connection with the above-referenced filing. This response is provided to
address each of your comments to further assist you in your review of this
filing. The numbered responses below correspond to the numbered comments in you
letter.
GENERAL
1. Comment noted.
PROSPECTUS COVER PAGE
2. We have revised this sentence to clearly state that no public or private
market for the company's securities exist.
3. Risk factor page number reference corrected.
4. We have added the requirement that a merger or acquisition must be
consummated before funds may be released from the escrow.
5. The second and third paragraphs have been removed.
6. Offering costs were paid out of Mr. Mercier's initial capital contribution.
We have revised the footnote accordingly.
INSIDE FRONT AND OUTSIDE BACK COVER PAGE OF PROSPECTUS
7. We have added the dealer prospectus delivery requirement.
Page 2
TABLE OF CONTENTS
8. The statement has been deleted.
PROSPECTUS SUMMARY
The Company
9. We have included the company's telephone number.
The Offering
10. We have revised this disclosure as requested.
11. We have included additional information regarding the escrow account.
12. We have clarified to indicate that the proceeds shall not remain in escrow
any longer than 18 months after the effective date of the initial
registration statement.
Use of Proceeds
13. We have deleted the Use of Proceeds language from this section.
RISK FACTORS
14. We have revised this paragraph to provide that all known material risks are
disclosed in this section.
15. We have modified the conclusions on Risk Factor 6. We have deleted Risk
Factors 1, 9, 11 and 12.
16. We have deleted this Risk Factor.
17. We have revised this Risk Factor to discuss the implications of the stated
Rule 419 requirements.
18. We have revised this Risk Factor to discuss the implications of the stated
Rule 419 requirements.
19. We have deleted this provision and have revised the document throughout to
delete this reference.
20. We do not understand this comment as there does not appear to be any
particular legal "jargon" other than the citing of several rules, which
appear to be explained in plain English. We ask that you reconsider this
comment or provide us with specific examples that are of concern to the
Commission.
21. We have revised this Risk Factor accordingly and moved the language at
issue to the prior Risk Factor.
Page 3
22. We have deleted this language.
23. This Risk Factor has been deleted.
24. This Risk Factor has been deleted.
25. We have deleted the reference to "growth" in the heading.
26. This Risk Factor has been deleted.
27. This Risk Factor has been deleted.
28. We have added language that clarifies the lack of any written policy in
place to resolve potential conflicts of interest.
29. We have added a Risk Factor addressing Mr. Mercier's lack of blank check
experience.
30. This Risk Factor has been deleted.
31. This Risk Factor has been deleted.
32. This Risk Factor has been deleted.
33. We have added a Risk Factor regarding limited state registration.
34. We have added a Risk Factor addressing the lack of a market for the
company's securities.
USE OF PROCEEDS
35. We have revised this disclosure to clarify that the offering costs were
paid out of Mr. Mercier's initial capital contribution.
36. We have provided that the company will not be requesting a release of 10%
of the escrowed funds.
37. We believe we have answered this comment in the initial filing by providing
that the proceeds will be used by the acquisition or merger candidate for
the development of its business or for working capital. We then stated that
working capital could include certain G&A expenses, benefits and office
lease expenses. The company is in no position to the specific amounts as it
does not know the nature of the acquisition or merger candidate at this
time. We have added this last statement to this paragraph.
DETERMINATION OF OFFERING PRICE
38. This statement has been revised to delete the quoted statement.
DIVIDEND
39. We have deleted this paragraph.
Page 4
DESCRIPTION OF BUSINESS
40. We have replaced the term "blind pool" with "blank check."
41. We have removed the quoted language.
42. We have clarified to provide that these expenses will need to be paid by
the target company.
43. We have included a disclosure that the company is not in any position at
this time to estimate these costs, as it has not identified any potential
acquisition or merger candidate or entered into any form of negotiations.
It does not know what form that an acquisition or merger may take, the
amount of legal, accounting and due diligence required, advisor
involvement, if any or price in terms of stock or cash that may be involved
in the sale of any shares. As many of these items will be subject to
negotiation at the time, we believe it would be misleading to attempt to
put a figure on any or all of these items.
44. We have deleted this reference as it is inapplicable to the company.
45. We have added a section on competition.
46. We have expanded the disclosure in paragraph 4 to include Mr.Mercier's
affiliates.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
47. We have clarified that the company will not require any additional funds
beyond those to be provided by Mr. Mercier. We do not understand your
comment to reconcile with risk factor eleven as the language is virtually
identical to this paragraph.
48. We have provided that the compensation of any outside advisors may be paid
in cash or stock based upon an hourly rate not to exceed $100 per hour, and
that there have been no negotiations or agreements with any such advisors.
49. We have added this disclosure.
50. We have revised the document throughout to reflect that any additional
funds required by the company shall be provided by Mr. Mercier in the form
of an additional capital contribution.
YOUR RIGHTS AND SUBSTANTIVE PROTECTIONS UNDER RULE 419
51. We have added "prompt" to the first bulleted point.
52. The 3rd full paragraph of this section states that Manufacturers and
Traders Trust Company is an FDIC insured depository institution. We have
clarified that interest and dividends, if any, will be paid to the
investors on a pro rata basis once funds are released.
53. We have deleted this reference.
54. This statement has been removed.
55. We have revised this statement to remove the reference to the use of
offering proceeds.
Page 5
DESCRIPTION OF PROPERTY
56. We have revised this section to further describe the office space, add the
address and state that there are no material limitations on the use of the
office space by the company.
MANAGEMENT
57. We have disclosed that Mr. Mercier devotes approximately 20% of his time to
the business of the company.
PLAN OF DISTRIBUTION
58. We have revised this paragraph to conform to the escrow agreement.
59. We have included the offering period.
60. We have deleted this provision.
61. We have already addressed this issue in the second paragraph of this
section.
EXEMPTION FROM STATE REGISTRATION
62. We have disclosed that the offering will be registered in Nevada. The
company will advise the Commission of the status of its state registration
once it is filed.
FINANCIAL STATEMENTS
63. This reference has been deleted.
64. The heading of the Auditor's Report has been revised.
65. The consent has been updated.
PART II
RECENT SALES OF UNREGISTERED SECURITIES
66. We have revised this section to state the specific exemptions relied upon.
67. The undertaking has been provided.
SIGNATURES
68. The requested signature has been included.
EXHIBITS
LEGALITY OPINION
69. The opinion has been revised to include our opinion on the applicable laws
and regulation, as well as court decisions and interpretations of such laws
and regulations.
Page 6
SUBSCRIPTION AGREEMENT
70. We have deleted this provision.
71. We have deleted the representations set forth in the comment.
72. We have deleted this reference.
73. We have deleted the indemnification provision.
74. We have revised the escrow agreement to cover the deposit of securities.
Please do not hesitate to contact us if you have any further questions.
Very truly yours,
/s/ William D. O'Neal
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William D. O'Neal