THE O'NEAL LAW FIRM, P.C.
17100 East Shea Boulevard
Suite 400-D
Fountain Hills, Arizona 85268
(480) 812-5058 (Tel)
(480) 816-9241 (Fax)
November 23, 2005
H. Christopher Owings
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Fuego Entertainment, Inc.
Registration Statement on Form SB-2 (Amendment 3)
File No. 333-127612
Filed August 19, 2005
Dear Mr. Owings:
We are writing in response to your comment letter dated October 27, 2005 in
connection with the above-referenced filing. The numbered responses below
correspond to your numbered comments.
1. The date has been removed at the bottom of the cover page.
2. We have re-inserted a risk factor regarding the penny stock issue.
3. We have added additional risk factors addressing the going concern
risk. We have also provided separate headings for all risk factors.
4. We have deleted this risk as the company has its own distribution
capabilities and is not "dependent" on third parties to distribute
their products.
5. We have substantially revised this section to address the concerns
raised in this comment.
6. We have elaborated on the points raised in this comment.
7. Please see the substantially revised Plan of Operation Section.
8. We have clarified that the company is not currently seeking any
specific film opportunities at this time. We have also moved the last
paragraph on page 12 of the prior filing to the discussion related to
Music Entertainment.
9. We have elaborated upon Mr. Cancio's credits and described how his
contacts in the industry will be of value to the company.
10. We have described the duties of the two potential employees the
company may seek to hire in the next twelve months.
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11. We have disclosed all three videos and the companies that hired the
company. We have also discussed expenses and outsourcing arrangements,
why and how the car racing video produced the major revenues from
film, and discussed the basis for stating that future film projects
similar to those discussed are estimated to be the principal source of
revenues. We also disclosed additional terms of the publicist
contract.
12. We have revised this disclosure to state how the company will satisfy
its cash requirements for the next twelve months.
13. We have revised this section in its entirety.
14. We have revised this section to clarify that the company does not
currently have any written agreements with Ciocan as of yet, but that
an agreement for the licensing of the Ciocan music library will occur
in the near future subject to the parties mutually agreeing upon
definitive terms.
15. We have deleted the reference to Mr. Cancio as he does not personally
engage in distribution and publishing activities independent of Ciocan
and the company.
16. We have identified the company's distributors and clarified the term
"net 30/net 60 payment terms."
17. We have clarified the status of the future agreement between Ciocan
and the company.
18. We have revised this paragraph to clarify that the relationship is
between the company and F&F Media Corp, not Adolfo Fernandez, the
President of F&F, in his personal capacity.
19. We have discussed the likelihood of the company earning an additional
$40,000 in revenue in the next twelve months for purposes of bringing
marketing and advertising functions in-house.
20. We have disclosed the relationship between Anthony Pullicino and the
company as it relates to The Trader Show.
21. This information was deleted as it is not a material part of the
company's business.
22. Mr. Cancio has no current or planned operations in Cuba, and has no
direct or indirect contacts with Cuba whatsoever.
23. We have provided the sources supporting the statement at issue.
Further, we have already disclosed that all cast members are legal
U.S. residents. The comment refers to the country of origin of the
show and cast before they defected to the U.S.
24. We have provided detailed responses to the issues raised in this
comment regarding the company's project entitled "The Traders Show."
25. We have disclosed the retail outlets and disclosed that there are no
existing agreements in place.
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26. The number of shares issued to Mr. Cancio as stated in Amendment No. 1
was an error. The correct number of shares is 7,772,670 shares. Mr.
Cancio is not registering any of his shares for resale in this
registration statement, thus we do not understand your request to
correct the selling shareholder table.
27. We have included a disclosure that the selling shareholders did not
consider any objective criteria in setting the sale price for the
company's shares. We also included a disclosure that no market may
ever develop for the company's securities.
28. We have included a disclosure in this section that the selling
shareholders received their shares in a private placement exempt from
registration.
29. Address correction noted and corrected.
30. Noted and revised.
31. The Company has no released films and all films owned by the Company
are in the process of production as of May 31, 2005. This disclosure
has been included in the updated financial statements provided.
32. Additional disclosures have been added to Note 1-Investment, to
incorporate the requested information and as per paragraph 10 of SFAS
No.50, and we have added additional information below for your
understanding of the investments:
As part of the 6 city Celebration tour of Havana Night Club, the
producer/promoterwas supposed to present only one show in Miami, however,
after the original show sold out within a week after tickets went on sale
and six weeks prior to the day of the show, the producer/promoter decided
to add two additional shows in Miami in order to provide for the filming of
a high definition DVD, the hiring of an Oscar winning director and the
recording of a CD/Sound Track. These three shows combined, used up all
funds available for the tour.
Understanding the business as I do, having produced many of them, I
understood that being able to release a high definition DVD directed by a
renown Oscar winning director and releasing a live album prior to a tour
would dramatically impact future ticket sales for the remaining shows of
the tour. I therefore decided to allow the shows' producer/promoter to
defer the repayment of the Company's original investment for the next 5
shows to take place. However, this was agreed with the understanding that
Fuego participate in any additional shows added to the next 5 pending shows
as the result of a sold out event in any of the cities, which, if it
happens, it will automatically trigger an additional show.
An example of this is the next show which is scheduled for December 31st.
at the Miami Arena, a 15,000 seat venue. This will be the fourth time the
show is presented in the same city as the result of its popularity. It is
my belief that this show alone will allow total recovery of our original
investment, and then some.
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33. Logo costs were incurred as a purchased intangible from a company
which specialized in designs of that nature and is considered the
purchase of an individual asset in accordance with paragraph 4.of SFAS
No. 142, subject to amortization based on a finite useful life to the
Company as per paragraphs 11 and 12 of SFAS No. 142. The footnote was
modified to reflect this as a purchased cost.
34. The disclosure that Hugo M. Cancio was issued 19 million shares was
incorrect as of May 31, 2005 and has since been corrected as updated.
A detailed schedule of listing all share activity is provided.
35. We had corrected this error but submitted the incorrect file. The
corrected information now appears in the updated financial statements.
36. Ciocan paid for a number of expenses of the Company prior to the time
that the Company received adequate funds with which to conduct its
affairs. The total amount advanced by Ciocan and the reductions
thereto now appear in the revised footnote including the explanation
that $1,400 which was charged to Ciocan for its applicable share of
rent during for 2 months during the period from inception to May 31,
2005.
37. There is no relationship between the Company and Anthony Hattenbach or
Sunflower Publishing. That reference has been deleted.
38. We have reconciled the shares with the financial statements and have
included a table
setting out the investing activity.
39. We have revised this exhibit as requested.
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
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