SecProbe.io

CORRESP
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filename1.htm

      Unassociated Document

      December
        21, 2005

      Ms.
        Anne
        Nguyen

      Mail
        Room

      100
        F. Street, N.E.

      United
        States Securities and Exchange Commission

      Washington,
        D.C. 20549

                Re:

                Market
                  Central, Inc.

      Registration
        Statement on Form S-4

      Filed
        November 10, 2005

      File
        No.
        333-129621

      Schedule
        TO

      Filed
        November 10, 2005

      File
        NO.
        5-52523

      Dear
        Ms.
        Nguyen:

      This
        letter is in response to your letter dated December 9, 2005, with respect
        to the
        referenced filings and Pre-Effective Amendment No. 1 to Form SB-2/S-4 and
        Amendment No. 1 to Schedule TO-I filed with the Commission contemporaneously
        with this letter.

      The
        following responds on a comment-by-comment basis to the numbered comments
        in
        your letter of December 9, 2005. All pages references are to the marked copies
        of the Pre-Effective Amendment No. 1 to Form SB-2/S-4 and Amendment No. 1
        to
        Schedule TO-I included with this letter.

      SCHEDULE
        TO

      Item
        4. Terms of Transaction.

      1.    COMMENT:

      It
        is
        unclear why you do not include disclosure regarding the securities held by
        the
“investment limited partnership” disclosed in footnote (9) of the beneficial
        ownership table on page 78 of your registration statement on Form S-4 pursuant
        to Item 1004(b) of Regulation M-A. It is also unclear why this entity is
        not
        named as a greater than 5% beneficial owner of your common stock in that
        table
        in your registration statement. See Item 405 of Regulation S-B. Please revise
        or
        advise.

      RESPONSE:

      This
        section has been revised as requested. See Item 4(b) of Amendment No. 1 to
        Schedule TO and “Security Ownership of Certain Beneficial Owners and Management
        and Related Stockholder Matters.”

      Item
        5. Past Contracts, Transactions, Negotiations and Agreements.

      2.    COMMENT:

      It
        appears that “Interest of Directors and Executive Officers; Transactions and
        Arrangements Concerning the Notes and Warrants” on page 63 of your registration
        statement on Form S-4 also provides disclosure responsive to Item 1005(e)
        of
        Regulation M-A. Please revise or advise.

      RESPONSE:

      This
        section has been revised as requested. Appropriate changes have been made
        to
        Item 5 of Amendment No. 1 to Schedule TO.

      Item
        11. Additional Information.

      3.    COMMENT:

      It
        appears that “Legal Matters; Regulatory Approvals” and “Miscellaneous” do
        provide disclosure responsive to Item 1011(a)(2) of Regulation M-A. Please
        revise or advise.

      RESPONSE:

      This
        section has been revised as requested. Appropriate changes have been made
        to
        Item 11 of Amendment No. 1 to Schedule TO.

      Item
        12. Exhibits.

      4.    COMMENT:

      Please
        revise your incorporation by reference of the registration statement on Form
        S-4, filed November 10, 2005, to more clearly identify the document being
        incorporated by reference.

      RESPONSE:

      This
        section has been revised as requested. See Item 12 of Amendment No. 1 to
        Schedule TO.

      FORM
        S-4

      General

      5.    COMMENT:

      We
        note
        your statement on page 52 that you lack sufficient capital resources to fully
        fund this offering. Please note that the staff’s position is that while you may
        refer to an offering of this type as a rescission offer, the offer will not
        cure
        prior federal securities law violations. Please also note that we continue
        to
        view any securities that were originally restricted as restricted securities,
        unless later registered. Because you lack sufficient resources to fully fund
        the
        rescission offer, you should continue to disclose a contingent liability
        in your
        financial statements. Please also revise the prospectus to provide disclosure
        consistent with our position articulated herein.

      RESPONSE:

      We
        acknowledge that our financial statements will continue to disclose a contingent
        liability with respect to such possible securities law violations as indicated
        in Notes Q and R to the Notes to the Consolidated Financial Statements. We
        also
        acknowledge that it is the Staff’s position that the offer will not cure prior
        federal securities law violations and that appropriate changes have been
        made in
        the registration statement in response to the Staff’s comment. See “Rescission
        Offer - Questions and Answers About the Rescission Offer,” pp. 22, 24,
“Risk Factors - Risks Related to the Rescission Offer,” pp. 17-18, “Rescission
        Offer - Effect of the Rescission Offer,” pp. 33-38 and “ - Funding the
        Rescission Offer,” pp. 38.

      With
        respect to the comment regarding the restricted nature of the securities,
        please
        see our response to Comment number 6 below.

      6.    COMMENT:

      In
        the
        table on page 6, you indicate that the common stock issued upon conversion
        of
        the Notes will be “registered and freely tradable if converted prior to the
        expiration of the Offering Period.” A similar statement exists on page 7 with
        respect to common stock to be issued upon exercise of the Warrants. Please
        provide us with an analysis of how these underlying shares of common stock
        will
        be registered and freely tradable. In that regard, we note that the Notes
        and
        Warrants as issued from Mary 2005 through September 2005 were not properly
        registered under the federal securities laws. In addition, this Form S-4
        registers only the rescission of the Notes and Warrants and the common stock
        underlying those Notes and Warrants to rescinded, not the original offer
        of
        those Notes and Warrants or any resale of those Notes and Warrants or any
        underlying common stock. Do you intend to file a registration statement for
        the
        resale of the Notes and Warrants and the underlying common stock? Please
        advise.

      RESPONSE:

      Through
        the filing of this registration statement, it is our intent to register the
        issuance of the Notes, Warrants and shares of Common Stock that are the subject
        of the Rescission Offer and are issued to investors who do not accept the
        Rescission Offer. Our fee table contemplates this in footnote (2) where we
        list
        the amounts of Notes, Warrants and shares of Common Stock being registered.
        We
        intend to maintain the effectiveness of the registration statement under
        Rule
        415 for a period of 150 days after the termination of the Rescission Offer
        and
        the consummation of the Exchange Offer in order to allow holders of the Notes
        and Warrants to convert their Notes and/or exercise their Warrants and receive
        registered shares of Common Stock if they so choose. In this regard, we have
        revised the registration statement to reflect that it is a combined SB-2/S-4
        registration statement.

      By
        filing
        a registration statement on Form SB-2/S-4 with regard to the Notes and Warrants
        that are the subject of the rescission offer, we believe such securities
        are
        deemed to be registered as of the date of the prospectus.  See Rule
        457(j)
        of the Securities Act. 17 C.F.R. § 230.457.  The proposition that
        unregistered securities subject to a rescission offer registered with the
        Commission are deemed to become registered securities has been asserted without
        objection in many successful requests for exemptive orders.  See,
        e.g. SEC
        Exemptive Order, ING Senior Income Fund (pub. avail. Oct. 9, 2003); SEC
        Exemptive Order, EV Classic Senior-Floating Rate Fund (pub. avail. Mar. 19,
        1997).  This proposition is also prevalent in other registered rescission
        offers.  See, e.g. Registration Statement on Form S-1 filed by Google,
        Inc.
        on August 4, 2004 (Registration No. 333-117934); Registration Statement on
        Form
        S-3 filed by UnionBanCal Corporation on Oct. 24, 2003 (Registration No.
        333-109981); Registration Statement Filed on Form S-3 by Earthlink, Inc.
        on
        October 14, 2003 (Registration No. 333-109691).

      7.    COMMENT:

      In
        your
        description of the exchange offer, we note on page 56 that the B Notes and
        B
        Warrants will be transferable only to “accredited investors.” Since both types
        of securities are registered in this registration statement, your basis for
        this
        statement is unclear. Please revise. Please also revise to disclose the purpose
        of structuring the exchange offer in such a manner that only the shares
        underlying the A Notes and A Warrants will be freely tradable. Please also
        tell
        what you intend to do with the registration statement at the end of the Offering
        Period. Do you plan to deregister the unsold shares of common
        stock?

      RESPONSE:

      The
        restriction on the transferability of the B Notes and the B Warrants has
        been
        deleted. We have added disclosure with respect to our intention to register
        the
        issuance of the shares of Common Stock underlying the B Notes and B Warrants
        at
        the time that they become convertible/exercisable and to maintain the
        effectiveness of such registration for so long as any B Notes or B Warrants
        are
        outstanding. We have revised the forms of B Notes and B Warrants (Exhibits
        4.8
        and 4.13, respectively). See “The Exchange Offer - Questions and Answers About
        the Exchange Offer,” pp. 41-43, “The Exchange Offer - Securities Offered in
        Exchange for Notes and Warrants; Differences in Rights of New A Notes and
        B
        Notes Offered,” pp. 47-50 and Exhibits 4.8 and 4.13.

      At
        the
        end of the Offering Period, we intend to deregister any shares of Common
        Stock
        that were registered but were not issued during the Offering
        Period.

      8.    COMMENT:

      We
        note
        from your calculation of registration fee table that you are registering
        3,164,788 shares of common stock issuable upon exercise of the B Warrants;
        however, on page 56 you disclose that these shares of common stock underlying
        the B Warrants will be restricted securities because they will not be issuable
        until after this registration statement is no longer effective. Please provide
        us with a detailed legal analysis of the exemption from registration upon
        which
        you intend to rely for the issuance of the shares of common stock upon exercise
        of the B Warrants.

      RESPONSE:

      The
        listing in the Registration Fee Table of the shares of Common Stock to be
        issued
        upon the exercise of B Warrants was incorrect and is removed in our
        Pre-Effective Amendment. See our response to Comment 7 regarding our intention
        to register the issuance of the shares of Common Stock underlying the B Warrants
        at the time that they become exercisable.

      9.    COMMENT:

      In
        addition, your calculation of registration fee table indicates that you are
        registering 5,319,958 shares of common stock underlying the “aggregate Notes
        issued in the rescission offer and the exchange offer.” Based on the cover page
        of your prospectus, it appears that there are 4,790,957 shares of common
        stock
        underlying the Notes subject to the rescission offer alone. As such, are
        you
        registering only 529,001 shares of common stock underlying the notes to be
        issued in the exchange offer? In that regard, we note your statement in the
        prospectus that the shares of common stock issued upon conversion of the
        A Notes
        will be freely tradable if converted during the Offering Period. Please
        advise.

      RESPONSE:

      The
        calculation of the number of shares of Common Stock that need to be registered
        upon the conversion of any and all of the notes that might be outstanding
        after
        the Rescission and Exchange Offers are completed is based on the greatest
        number
        of shares that would be required to be issued upon such conversions. As
        structured, current holders of Notes would fall into one of four categories
        after the transactions contemplated by the registration statement: (i) holders
        who accept the Rescission Offer and receive cash for their current securities,
        (ii) holders who do not accept either the Rescission Offer or the Exchange
        Offer
        and therefore hold notes and warrants with the same terms as the original
        notes;
        (iii) holders who do not accept the Rescission Offer and accept the Exchange
        Offer and receive A Notes, and A Warrants and B Warrants, and (iv) holders
        who
        do not accept the Recession Offer and accept the Exchange Offer and receive
        B
        Notes, and A Warrants and B Warrants. The greatest number of shares of Common
        Stock that would be issuable if all of such note holders converted their
        Notes
        during the Offering Period would be if all note holders accepted the Exchange
        Offer and received A Notes, which has the more favorable conversion rate.
        In
        such event, a maximum of 5,319,958 shares of Common Stock would be issued.
        Therefore, we included that number of shares of Common Stock in our registration
        fee table. In the event all such shares are not issued, we will deregister
        shares that are not issued during the Offering Period.

      10.   COMMENT:

      It
        has
        come to our attention that you intend to rely on certain Blue Sky laws and/or
        regulations that provide exemption from registration in certain states where
        you
        intend to conduct your exchange offer. In particular, it has come to our
        attention that the North Carolina Securities Division has given you notice
        that
        the exemption from registration for which you intend to rely upon for the
        issuance of certain warrants may not be available to you. Please tell us
        the
        substance of your discussions with the North Carolina Securities Division
        and
        the status of their review. Please also tell us if any other state securities
        agencies have contacted you about these offerings and, specifically, objected
        to
        your reliance on claimed exemptions from registration in their state. Your
        disclosure on page 63 (“Legal Matters; Regulatory Approvals”) and page 65
        (“Miscellaneous”) also should be revised in response to this
        comment.

      RESPONSE:

      We
        have
        been contacted by the North Carolina Securities Division which had initially
        voiced their concern that the exemption that we were intending to rely upon
        (“any transaction with