MATRIX VENTURES, INC.
#5 2118 Eastern Avenue
North Vancouver, British Columbia
Canada, V7L 3G3
November 10, 2005
U.S. Securities & Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Mail Stop 0305
Attention: H. Yuna Peng
Dear Sirs:
Re: Matrix Ventures, Inc. - Registration Statement on Form SB-2
Amendment No. 4 - File No. 333-120382
Further to your letter dated September 9, 2005 concerning the deficiencies in
our registration statement on Form SB-2, we provide the following responses:
General
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1. Please note the updating requirements for the financial statements
pursuant to Item 310(g) of Regulation S-B and provide a currently dated
consent of the independent accountants in an amendment to the
registration statement.
We have included financial statements for the period ended June 30,
2005 with our amended registration statement.
Summary
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2. We direct your attention to the statement, "[t]o date, we have not
conducted any exploration on our sole mineral property interest...."
This statement does not appear to be correct. Please revise.
We have updated our disclosure to indicate that we have completed
initial exploration on our mineral property interest.
3. You state that the offering will conclude when all of the 2,309,000
shares of common stock have been sold. Please explain to the staff how
that complies with Rule 415(a) of the Securities Act.
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Rule 415(a) provides that securities may registered for an offering to
be made on a continuous or delayed basis, provided that the securities
which are to be offered or sold by or on behalf of a person or persons
other than the registrant. Because no securities are being sold in the
offering by or on behalf of the registrant, the selling security
holders' offering of shares meets the requirements of Rule 415(a).
Risk Factors, page 6
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4. Please revise the statement in risk two that to date, you have been
involved primarily in organizational activities. We note that you have
finished Part I of the exploration phase. You also state that potential
investors should be aware of the difficulties normally encountered by
new mineral exploration companies, however, you did not spell out these
risks. Please do so.
We have revised risk factor two to indicate that we have conducted
preliminary exploration work and that potential investors should be
aware that new mineral exploration companies typically incur losses
without realizing any revenue for many years.
5. Please disclose as a material risk that in order for Matrix Venture,
Inc. to hold title to the mineral claims, the company must be
registered in British Columbia and that you have not registered
in British Columbia. Please also disclose when you plan to do so.
We have added the following risk factor:
"BECAUSE WE CANNOT HOLD TITLE TO THE WANAPITEI RIVER PROPERTY UNTIL WE
ARE REGISTERED AS A CORPORATION IN ONTARIO, WE MAY INCUR SIGNIFICANT
LEGAL EXPENSES IN ENFORCING OUR INTEREST IN THE CLAIMS.
Before we can hold title to the Wanapitei River property in our name,
we must register as an extra-provincial corporation in Ontario. We
intend to complete this registration process following completion of
the third phase of recommended exploration on the property.
In the meantime, if Terry Loney, the current registered holder of the
claims, who holds them in trust for us, becomes bankrupt or transfers
the claims to a third party, we may incur significant legal expenses in
enforcing our interest in the claims in Ontario courts."
6. In risk factor 9 where you state that you directors will have
significant influence over corporate decisions that may be
disadvantageous to other minority shareholders, please also discuss the
directors' fiduciary duties towards other shareholders.
We have added the following disclosure:
"Although our directors have a fiduciary duty to act in the best
interests of the corporation and shareholders in making corporate
decisions, they may vote their shares as they wish in respect of any
shareholder resolution."
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7. Risk factor 10 states that your president will only spend 30% of her
business time to Matrix. Please quantify in terms of how many hours
that would be per week. Please do the same for Ms. Kumar.
We have indicated that Ms. Bolton and Ms. Kumar respectively devote 12
hours and four hours per week to our affairs.
8. Please add a risk factor that addresses the fact that the property has
not been examined in the field by a professional geologist of mining
engineer. Please also remove all references to the property reviewer,
John M. Siriunas, from the filing.
The Wanapitei River property was reviewed in the field by John M.
Siriunas during the phase one exploration program that we undertook.
Mr. Siriunas has reviewed the geological and property disclosure
contained in our revised SB-2 and has provided his written consent,
which has been filed as an exhibit.
Interests of Named Experts and Counsel, page 20
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9. Please revise the second paragraph under this caption. The registration
statement must also contain an opinion of counsel in accordance with
Item 601 of Regulation S-B.
We have filed an opinion of counsel in accordance with Item 601 of
Regulation S-B.
Description of Business, page 20
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10. You state that in order for you to exercise the option, you are
obligated to incur "exploration expenditures" of a total of $115,000.
However, your proposed budget shows the estimate for exploration
programs will be a total of $95,000; this is $20,000 less than the
number stated in the option agreement and in that case, you will lose
your right. Please reconcile and plain how you plan to remedy the
situation.
Following completion of the phase three exploration program, we will
ensure that we complete an least an additional $20,000 in exploration
expenditures on the Wanapitei River property by December 31, 2006 in
order to meet our obligations under our property option agreement with
Terry Loney.
11. We reissue comment 5. The consent of John Siriunas to the use of his
name and the references to his report should be filed as an exhibit to
the amended registration statement or all references to him should be
deleted.
We have filed Mr. Siriunas's consent as an exhibit to our amended
registration statement.
12. Indicate the date for the "current cash on hand of $9,318" on page
24 and ensure that it is as of the approximate date of the prospectus.
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We have included a reference date for our current cash on hand figure.
Plan of Operation, page 26
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13. We note that phase II will cost $10,000 and will start in October,
which is less than a month away. Currently, your cash on hand is not
sufficient to satisfy this amount. In addition, you have not made any
arrangements to obtain loans from your directors. Please disclose how
you plan to fund the difference and describe the actions you will take
and the timeline for such actions.
We will fund this exploration from a combination of our current cash on
hand and from funds that our president, Lori Bolton, has agreed to lend
to us.
14. We note that you incurred $63,572 in operating expenses. Please
disclose how you paid this cost and make reference to the appropriate
financial statement accounts.
Our statement of cash flows for the period from inception to June 30,
2005 shows the details of our operating and financing activities to
that date.
We have disclosed that the $69,733 in operating expenses incurred to
June 30, 2005 includes donated rent recorded at $4,250 and donated
services recorded $12,750 that were charged to operations, but will not
be paid. As well, we have accrued $25,000 for legal fees pertaining to
our registration statement filing. These will be due following the
effective date of our registration statement. The balance of our
operating expenses was paid from cash on hand.
Rule 144 Shares, Page 28
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15. You state that 5,000,000 shares of your common stock, all held by your
directors, are available for resale to the public after March 23, 2005.
We do not understand how you came to this conclusion. Please advise or
revise.
Our disclosure indicates that the 5,000,000 shares of our common stock
held by our directors are available for resale to the public after
March 23, 2005 in accordance with the volume and trading limitations of
Rule 144 of the Act [our emphasis]. We then provide an explanation of
the resale provisions under Rule 144(k). March 23, 2005 is the date
that is one year from the date that the 5,000,000 shares were issued to
our directors.
Executive Compensation, page 18
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16. Correct the date in the first paragraph of this section.
We have updated and corrected the dates in this section.
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Part II
Exhibits
17. We reissue former comment 6. Please file the legality opinion with your
next amendment.
We have filed a legality opinion with our amended registration
statement.
Signatures
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18. We repeat prior comment 7. Please have the registration statement
signed by chief accounting officer and principal financial officer. If
Erika Kumar is acting in the capacity of chief accounting officer and
principal financial officer, she should sign the registration statement
with those titles.
Erica Kumar has executed the amendment to our registration statement as
our chief accounting officer and principal financial officer.
Yours truly,
/s/ Lori Bolton
Matrix Ventures, Inc.
Lori Bolton, President