SEC Comment Letter for NextPlat Corp (NXPL) (CIK 0001058307) (NXPL) — Jul 22, 2008
NextPlat Corp (NXPL) (CIK 0001058307)
Date: July 22, 2008 · CIK: 0001058307 · Accession: 0000000000-08-036451
AI Filing Summary & Sentiment
Reasoning
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE Mail Stop 6010 July 22, 2008 Mr. Benjamin C. Croxton Chief Executive Officer World Energy Solutions, Inc. 3900A 31 st Street North St. Petersburg, Florida 33714
RE: World Energy Solutions, Inc. Form 10-KSB for the year ended December 31, 2007 Form 10-QSB for the quarter ended March 31, 2008 File No. 0-25097
Dear Mr. Croxton: We have reviewed your filings and have the following comments. We have limited our review to only your financial stat ements and related disclosures and do not intend to expand our review to other portions of your docum ents. Where indicated, we think you should revise your docum ents in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your expl anation. In some of our comments, we may ask you to provide us w ith information so we may better understand your disclosure. After reviewing this inform ation, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Benjamin C. Croxton World Energy Solutions, Inc. July 22, 2008 Page 2 Form 10-KSB for the year ended December 31, 2007
Item 8A. Controls and Procedures, page 15
1. It does not appear that your manage ment has completed its assessment of internal control over financial reporting as of December 31, 2007. Since you were required to file or filed an annual report for the prior fiscal year, it appears you are required to report on your management’s assessment of intern al control over financial reporting.
If your management has not yet comple ted its assessment, we ask that you complete your evaluation and amend your filing within 30 calendar days to provide the required management's repor t on internal control over financial reporting. In completing your evaluation, you may find the following documents helpful: the Commission’s release Amendments to Rules Regarding Management’s Report on Internal Control Over Financial Reporting (Securities Act Release 8809/Financial Reporting Release 76). You can find this release at: http://www.sec.gov/rules/final/2007/33-8809.pdf ;
the Commission’s release Commission Guidance Regarding Management’s Report on Internal Control Over Financ ial Reporting Under Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (Securities Act Release 8010/Financial Reporting Release 77). You can find this release at: http://sec.gov/rules/interp/2007/33-8810.pdf ; and
the “Sarbanes-Oxley Section 404 – A Guid e for Small Business” brochure at: (http://www.sec.gov/info/smallbus/404guide.shtml ).
In this regard, please note that in addition to providi ng your assessment of internal control over financial reporting, you s hould also continue to provide your assessment of your disclosure controls and procedures as of the end of the fiscal year covered by the report. Please note that the failure to complete management’s assessment adversely affects the company’s and its shareholders ability to avail themselves of rules and forms that are predicated on the current or timely filing of Exchange Act reports. For further information regarding these impacts, please see Compliance and Disclosure Interpretation 115.02, which you can find at http://www.sec.gov/divisions/corpf in/guidance/regs-kinterp.htm .
Mr. Benjamin C. Croxton World Energy Solutions, Inc. July 22, 2008 Page 3 2. As a related matter, we note your disclosure “this report shall not be deemed to be filed for purposes of Section 18 of th e Securities Exchange Act of 1934…” Please revise your disclosure s to clarify that this di sclosure relates only to management’s report on internal control over financial reporting. In this regard, please note that the information require d by Item 307 of Regulation S-B must be filed, not furnished. Note 2 – Mergers and Acquisitions, page F-3
3. We see that you acquired that you acquired all of the outstanding stock of Pure Air Technologies (“PATI”) and Hydrogen Safe Technologies, Inc. (“HSTI”) from UTEK Corporation. Please address the following:
For each of the acquisitions, tell us whether the transaction represents an acquisition of a business or an acquisition of assets. Provide us with your analysis of the f actors in EITF 98-3.
To the extent that you determined that these transactions represent acquisitions of businesses, please tell us how you have complied with Item 310(c) and 310(d) of Regulation S-B. Pr ovide us with your calculations of the significance of each of the acquisitions.
We note that each of these transactions were with UTEK Corporation. You state on page 7 that UTEK is a major shareholder of World Energy. Please tell us UTEK’s ownership percentage of World Energy as of the date of each of the PATI and HSTI acquisitions.
Tell us why you classified the “impairm ent losses” relating to the intangible assets acquired in each of these transactions as non-operating expenses on your consolidated statement of operations. Tell us how your presentation complies with paragraph 15 of SFAS 142 and paragraph 25 of SFAS 144.
Note 8. Related Party Transactions, page F-14
4. We note your disclosures here regarding the note payable to a related party and the office lease with a related party. Please revise future filings to clearly disclose the nature of the relationship. Refer to paragraph 2(a) of SFAS 57. 5. Further to the above, we note your disclo sure on page 7 that UTEK is a major shareholder of World Energy. Please revise this note in future filings to provide the disclosures required by paragraph 2 of SFAS 57, or otherwise tell us why you do not believe they are required.
Mr. Benjamin C. Croxton World Energy Solutions, Inc. July 22, 2008 Page 4 Exhibit 31
6. We note that the certification filed as Exhibit 31 does not include the language required by paragraph 4(b) of Item 601(b)(31) of Regulation S-B. The required certifications must be in the exact form prescribed; the wording of the required certifications may not be changed in any respect. Accordingly, please file an amendment to your Form 10-KSB that include s the entire filing together with the certifications of each of your current CEO and CFO in the form currently set forth in Item 601(b)(31) of Regulation S-B. Pl ease note this comment also applies to your Form 10-QSB as of March 31, 2008. Form 10-QSB for the quarter ended March 31, 2008
General
7. We note that your most recent quarterly report for the period ending March 31, 2008 was on Form 10-QSB and not Form 10-Q. Beginning February 4, 2008, companies formerly classified as “small business issuers” under Regulation S-B must file their quarterly reports on Form 10-Q after they have filed an annual report for a fiscal year ending after December 15, 2007. Although small business issuers are now required to file on Form 10- Q, the disclosure requirements for that form are now tailored for smaller companies. Although we are not asking you to correct your most recent filing just to reflect the proper form type, we ask that you review your filing requirements and consider whether any action is necessary if your most recently filed quarterly report does not contain all required materi al information. In any event, you should file your next quarterly report on Form 10-Q.
Information about recent changes to rule s affecting small business issuer form types and disclosure and filing requiremen ts is available on the SEC website at http://www.sec.gov/info/smallbus/secg/smrepcosysguid.pdf .
Statement of Operations, page 5
8. We note that you classified research and development costs of $110,575 and $88,129 for the quarters ended March 31, 2008 and 2007, respectively, as non- operating expenses. Please describe the na ture of these expenses and tell us why you believe they are properly classi fied as non-operating expenses.
Mr. Benjamin C. Croxton World Energy Solutions, Inc. July 22, 2008 Page 5 As appropriate, please amend your Form 10-KSB and Form 10-QSB, and respond to these comments within 30 calendar days. Pl ease furnish a cover letter that keys your responses to our comments and provides any requested information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed decision. Since the company and its management are in possession of all facts relating to a company’ s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. You may contact Eric Atallah, Staff Accountant at (202) 551-3663 or me at (202) 551-3643 regarding comments on the financial stat ements and related matters. In this regard, do not hesitate to contact, Martin James, Senior Assistant Chief Accountant at (202) 551-3671 with any other questions.
S i n c e r e l y ,
Kevin L. Vaughn Accounting Branch Chief
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 6010
July 22, 2008
Mr. Benjamin C. Croxton
Chief Executive Officer World Energy Solutions, Inc.
3900A 31
st Street North
St. Petersburg, Florida 33714
RE: World Energy Solutions, Inc.
Form 10-KSB for the year ended December 31, 2007 Form 10-QSB for the quarter ended March 31, 2008 File No. 0-25097
Dear Mr. Croxton:
We have reviewed your filings and have the following comments. We have
limited our review to only your financial stat ements and related disclosures and do not
intend to expand our review to other portions of your docum ents. Where indicated, we
think you should revise your docum ents in response to these comments. If you disagree,
we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your expl anation. In some of our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure. After reviewing this inform ation, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our
review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Benjamin C. Croxton
World Energy Solutions, Inc.
July 22, 2008
Page 2 Form 10-KSB for the year ended December 31, 2007
Item 8A. Controls and Procedures, page 15
1. It does not appear that your manage ment has completed its assessment of internal
control over financial reporting as of December 31, 2007. Since you were
required to file or filed an annual report for the prior fiscal year, it appears you are
required to report on your management’s assessment of intern al control over
financial reporting.
If your management has not yet comple ted its assessment, we ask that you
complete your evaluation and amend your filing within 30 calendar days to provide the required management's repor t on internal control over financial
reporting.
In completing your evaluation, you may find the following documents helpful:
the Commission’s release Amendments to Rules Regarding Management’s
Report on Internal Control Over Financial Reporting (Securities Act Release
8809/Financial Reporting Release 76). You can find this release at:
http://www.sec.gov/rules/final/2007/33-8809.pdf ;
the Commission’s release Commission Guidance Regarding Management’s
Report on Internal Control Over Financ ial Reporting Under Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (Securities Act Release
8010/Financial Reporting Release 77). You can find this release at:
http://sec.gov/rules/interp/2007/33-8810.pdf ; and
the “Sarbanes-Oxley Section 404 – A Guid e for Small Business” brochure at:
(http://www.sec.gov/info/smallbus/404guide.shtml ).
In this regard, please note that in addition to providi ng your assessment of internal
control over financial reporting, you s hould also continue to provide your
assessment of your disclosure controls and procedures as of the end of the fiscal
year covered by the report. Please note that the failure to complete management’s assessment adversely affects the company’s and its shareholders ability to avail themselves of rules and
forms that are predicated on the current or timely filing of Exchange Act reports.
For further information regarding these impacts, please see Compliance and Disclosure Interpretation 115.02, which you can find at
http://www.sec.gov/divisions/corpf in/guidance/regs-kinterp.htm
.
Mr. Benjamin C. Croxton
World Energy Solutions, Inc.
July 22, 2008
Page 3 2. As a related matter, we note your disclosure “this report shall not be deemed to be
filed for purposes of Section 18 of th e Securities Exchange Act of 1934…”
Please revise your disclosure s to clarify that this di sclosure relates only to
management’s report on internal control over financial reporting. In this regard,
please note that the information require d by Item 307 of Regulation S-B must be
filed, not furnished.
Note 2 – Mergers and Acquisitions, page F-3
3. We see that you acquired that you acquired all of the outstanding stock of Pure
Air Technologies (“PATI”) and Hydrogen Safe Technologies, Inc. (“HSTI”) from UTEK Corporation. Please address the following:
For each of the acquisitions, tell us whether the transaction represents an
acquisition of a business or an acquisition of assets. Provide us with your
analysis of the f actors in EITF 98-3.
To the extent that you determined that these transactions represent
acquisitions of businesses, please tell us how you have complied with Item
310(c) and 310(d) of Regulation S-B. Pr ovide us with your calculations of the
significance of each of the acquisitions.
We note that each of these transactions were with UTEK Corporation. You
state on page 7 that UTEK is a major shareholder of World Energy. Please
tell us UTEK’s ownership percentage of World Energy as of the date of each
of the PATI and HSTI acquisitions.
Tell us why you classified the “impairm ent losses” relating to the intangible
assets acquired in each of these transactions as non-operating expenses on your consolidated statement of operations. Tell us how your presentation complies with paragraph 15 of SFAS 142 and paragraph 25 of SFAS 144.
Note 8. Related Party Transactions, page F-14
4. We note your disclosures here regarding the note payable to a related party and
the office lease with a related party. Please revise future filings to clearly disclose
the nature of the relationship. Refer to paragraph 2(a) of SFAS 57.
5. Further to the above, we note your disclo sure on page 7 that UTEK is a major
shareholder of World Energy. Please revise this note in future filings to provide
the disclosures required by paragraph 2 of SFAS 57, or otherwise tell us why you
do not believe they are required.
Mr. Benjamin C. Croxton
World Energy Solutions, Inc.
July 22, 2008
Page 4
Exhibit 31
6. We note that the certification filed as Exhibit 31 does not include the language
required by paragraph 4(b) of Item 601(b)(31) of Regulation S-B. The required certifications must be in the exact form prescribed; the wording of the required
certifications may not be changed in any respect. Accordingly, please file an
amendment to your Form 10-KSB that include s the entire filing together with the
certifications of each of your current CEO and CFO in the form currently set forth in Item 601(b)(31) of Regulation S-B. Pl ease note this comment also applies to
your Form 10-QSB as of March 31, 2008.
Form 10-QSB for the quarter ended March 31, 2008
General
7. We note that your most recent quarterly report for the period ending March 31,
2008 was on Form 10-QSB and not Form 10-Q. Beginning February 4, 2008,
companies formerly classified as “small business issuers” under Regulation S-B must file their quarterly reports on Form 10-Q after they have filed an annual report for a fiscal year ending after December 15, 2007. Although small business issuers are now required to file on Form 10- Q, the disclosure requirements for that
form are now tailored for smaller companies. Although we are not asking you to correct your most recent filing just to reflect
the proper form type, we ask that you review your filing requirements and
consider whether any action is necessary if your most recently filed quarterly
report does not contain all required materi al information. In any event, you should
file your next quarterly report on Form 10-Q.
Information about recent changes to rule s affecting small business issuer form
types and disclosure and filing requiremen ts is available on the SEC website at
http://www.sec.gov/info/smallbus/secg/smrepcosysguid.pdf .
Statement of Operations, page 5
8. We note that you classified research and development costs of $110,575 and
$88,129 for the quarters ended March 31, 2008 and 2007, respectively, as non-
operating expenses. Please describe the na ture of these expenses and tell us why
you believe they are properly classi fied as non-operating expenses.
Mr. Benjamin C. Croxton
World Energy Solutions, Inc.
July 22, 2008 Page 5
As appropriate, please amend your Form 10-KSB and Form 10-QSB, and respond
to these comments within 30 calendar days. Pl ease furnish a cover letter that keys your
responses to our comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed decision. Since the company and its management are in
possession of all facts relating to a company’ s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
You may contact Eric Atallah, Staff Accountant at (202) 551-3663 or me at (202)
551-3643 regarding comments on the financial stat ements and related matters. In this
regard, do not hesitate to contact, Martin James, Senior Assistant Chief Accountant at (202) 551-3671 with any other questions.
S i n c e r e l y ,
Kevin L. Vaughn
Accounting Branch Chief