SecProbe.io

CORRESP
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filename1.htm

  Christopher
  E. Howard

  One
  Monument Square

  Portland, ME  04101

  207-791-1335 voice

  207-791-1350 fax

  choward@pierceatwood.com

  pierceatwood.com

  July 15, 2005

VIA FEDERAL EXPRESS

Mr. Jeffrey Riedler

Assistant Director

Division of Corporation
Finance

Securities and Exchange
Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Re:                               Advanced
Cell Technology, Inc. (f/k/a A.C.T. Holdings, Inc.) – SEC File No. 0-50295

Dear Mr. Riedler:

We are counsel to
Advanced Cell Technology, Inc., a Nevada corporation (the “Company”),
formerly known as A.C.T. Holdings, Inc.
This letter is being submitted to you in response to comments contained
in your letter of June 30, 2005, relating to the following Company filings
with the Securities and Exchange Commission (the “Commission”):  (1) Form 10-KSB filed January 31,
2005; (2) Form 8-K filed February 4, 2005; (3) Form 8-K/A
filed April 18, 2005; and (4) Form 10-QSB filed May 23,
2005.  These comments, and the responses
on behalf of the Company to these comments, are set forth below.

Form 10-KSB, Item 13, Exhibits and Reports on Form 8-K

Comment 1:

“It appears you have not filed some
documents that are required as exhibits.
For example, at a minimum you should file your articles of incorporation
and bylaws, as required by Item 601(b)(3) of Regulation S-K.  We also note from Item 9 of your documents
that you have a code of ethics, which should also appear in the exhibit
index.  Please file these and any other
exhibits required by Item 601 in an amended Form 10-KSB, and list
them in the exhibit index.  If any
document required to be filed has already been included in a previous filing,
you should still list the document in the exhibit index, numbered according to
the paragraph within Item 601(b) that requires it.  For such documents, the exhibit index should
identify the filing with which it was filed, including the form type, filing
date, and file number, and state the exhibit number within that filing.”

Response to Comment 1

The Company will prepare
an amendment to its Form 10-KSB, restating in its entirety Item 13
(Exhibits) thereof by setting forth therein an exhibit index listing the
exhibits required by Item 601 of Regulation S-B.  Where any such exhibit is incorporated by
reference to a document included in a previous filing, the exhibit index will identify
such filing, including the form type and filing date, and state the exhibit
number within that filing.  The Company
proposes including the following revised Item 13 in its amended filing on Form 10-KSB/A:

“Part II

Item
13.  Exhibits

  Exhibit No

  Description

  2.1

  Agreement and Plan of
  Merger between A.C.T. Holdings, Inc. (the “Company”), A.C.T. Acquisition
  Corp., and Advanced Cell Technology, Inc. (“ACT”) dated as of
  January 3, 2005. Previously filed as Exhibit 10.1 to our Current
  Report on Form 8-K (SEC File No. 000-50295) dated
  December 30, 2004 and filed with the Securities and Exchange Commission
  (the “Commission”) on January 4, 2005 and incorporated by reference
  herein.

  3.1

  Articles of
  Incorporation. Previously filed as Exhibit 3.1 to our Registration
  Statement on Form SB-2 (SEC File No. 333-60906) filed
  with the Commission on May 14, 2001 and incorporated by reference
  herein.

  3.1.1

  Certificate of
  Amendment to Articles of Incorporation dated April 1, 2004. Previously
  filed as Exhibit 3.1.1 to our Quarterly Report on Form 10-QSB
  (SEC File No. 000-50295) filed with the Commission on May 23,
  2005 and incorporated by reference herein.

  3.1.2

  Certificate of
  Amendment to Articles of Incorporation. Previously filed as Exhibit 3.1
  to our Current Report on Form 8-K (SEC File No. 000-50295)
  dated December 30, 2004 and filed with the Commission on filed on
  January 4, 2005 and incorporated by reference herein.

  3.2

  Bylaws. Previously
  filed as Exhibit 3.2 to our Registration Statement on Form SB-2
  filed with the Commission on May 14, 2001 and incorporated by reference
  herein.

  3.2.1

  Amendment to Bylaws.
  Previously filed as Exhibit 3.1 to our Current Report on Form 8-K
  (SEC File No. 000-50295) dated December 15, 2004 and filed
  with the Commission on December 29, 2004 and incorporated by reference
  herein.

  4.1

  Specimen Stock
  Certificate. Previously filed as Exhibit 4.1 to our Quarterly Report on
  Form 10-QSB (SEC File No. 000-50295) filed with the
  Commission on May 23, 2005 and incorporated by reference herein.

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  14.1

  Code of Ethics.
  Previously filed as Exhibit 14 to our Annual Report on Form 10-KSB
  for the year ended December 31, 2003, filed with the Commission on
  April 12, 2004 and incorporated by reference herein.

  31.01

  Section 302 Certificate of Chief Executive Officer (Previously
  filed)

  31.02

  Section 302
  Certificate of Chief Financial Officer (Previously filed)

  The following additional exhibits are filed with this Amendment
  No. 1 pursuant to Rules 13a-14(a) or 15d-14(a). These exhibits do not amend the
  corresponding exhibits previously filed with the Annual Report.

  31.01

  Section 302 Certificate of Chief Executive Officer

  31.02

  Section 302
  Certificate of Chief Financial Officer”

Comment 2:

“Please clarify for us why you have included
as exhibits the Forms SB-2, 8-A, S-8, and 2003 10-KSB
and the definitive information statement.”

Response to Comment 2

On the advice of prior
counsel, the Company included these documents as exhibits principally because
they referenced descriptions of the Company’s Articles of Incorporation and
amendments thereto.  Given the more
precise exhibit index that the Company has included in its amended Form 10-KSB
in response to Comment 1, the Company has removed references to these documents
in the exhibit index.

Comment 3:

“Please note that the principal executive
officer, principal financial officer, and controller or principal accounting
officer are required to sign the report, and the captions accompanying their
signatures should state these titles.  We
presume Mr. Merrell currently fills all of these roles.  Therefore, in your amended filing, please revise
the caption accompanying Mr. Merrell’s signature to include these
titles.  See General Instruction C.2 to Form 10-KSB.”

Response to Comment 3

Mr. Merrell no
longer holds any office with the Company, and the amended Form 10-KSB
will be executed by the Company’s current officers, with an appropriate caption
accompanying their signatures to indicate whether they are signing in their
respective capacities as principal executive officer, principal financial
officer and principal accounting officer.

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Form 10-Q, Recent Developments of Small Business
Issuer, page 3

Comment 4:

“Please
tell us whether you solicited shareholder approval for the merger, the issuance
of shares in the merger, or for any required increase in authorized shares
necessary to effect the reverse merger.
If not, please provide us with an analysis as to why shareholder
approval was not needed in order to effect the transaction.”

Response to Comment 4:

The Company did not
solicit the approval of its shareholders for the merger or the issuance of
shares in the merger because (a) no approval of the Company’s shareholders
was required to effect the merger under Nevada law; and (b) no increase in
authorized shares was required because the Company had sufficient authorized
shares to issue in the merger.

Nevada Revised Statutes (“NRS”)
92A.120 states in pertinent part:

After adopting a plan of
merger, exchange or conversion, the board of directors of each domestic
corporation that is a constituent entity in the merger or conversion, or the
board of directors of the domestic corporation whose shares will be acquired in
the exchange, must submit the plan of merger…, the plan of conversion or the
plan of exchange for approval by its stockholders who are entitled to vote on
the plan.

NRS 92A.015 defines “constituent
entity” with respect to a merger as “each merging or surviving entity.”  The only constituent entities to the merger
were (1) A.C.T. Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of the Company (“Merger Sub”), and (2) Advanced Cell Technology, Inc.,
a Delaware corporation and the target company in the merger (“Target”).
Accordingly, the Company approved the merger as the sole shareholder of Merger
Sub in accordance with the requirements of Section 251 of the Delaware
General Corporation Law (“DGCL”), but no approval by the shareholders of the
Company was required under Nevada law.
The Company notes that the merger was also approved by the shareholders
of Target in accordance with Section 251 of the DGCL.

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Item 1.  Consolidated
Financial Statements; Consolidated Balance Sheets, page 4

Comment 5:

“Please tell us the nature of the deferred
royalty amounts on the balance sheet, the period the amounts are being
deferred, and the basis for your accounting policy.  This comment also applies to the Form 8-K/A
filed on April 18, 2005.”

Response to Comment 5:

We have assumed for
purposes of this response that your question relates to Deferred Revenue,
related to deferred royalty amounts, which is recorded as a liability in the
Company’s balance sheet. In our response to Comment 6 below, we have addressed
the Company’s accounting for Deferred Royalty Fees, which is the asset recorded
in the Company’s balance sheet in connection with deferred royalty amounts. The
Company has recorded deferred revenue in connection with amounts collected from
licensees of its technology.  The Company
recognizes this revenue in accordance with SAB 104. In general, amounts
represent payments received for exclusive and nonexclusive licenses to utilize
the company’s technologies, whether owned or licensed from others.  Amounts collected are deferred and amortized
over approximately ten years, the estimated life of the underlying technologies
licensed.

Amounts reflected in the
financial statements for deferred revenue are as follows:

  3/31/05

  12/31/04

  Current Portion

  332,508

  332,508

  Long-term

  1,911,922

  1,995,049

  Total

  $

  2,244,430

  $

  2,327,557

Notes to Consolidated Financial Statements

2.                                       Significant Accounting Policies;
Revenue Recognition, page 9

Comment 6:

“Please tell us the nature and amount of the
deferred costs associated with license revenue and tell us why you believe your
policy of deferring these costs is consistent with US GAAP.  This comment also applies to the Form 8-K/A
filed on April 18, 2005.”

Response to Comment 6:

The Company has entered
into licensing agreements for patented/ patent pending technology.  Under the terms of these license agreements,
the Company may further develop the

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technology and / or sub-license the technology to third parties.  In the event of the sublicense of technology,
the Company is obligated to pay royalty fees to the Licensors of the
technology. Assets recorded by the Company as Deferred Royalty Fees represent
the amounts owed to the licensors pursuant to these licenses, based upon the
underlying royalty rates in the agreements.  Amounts owed by the Company are recorded as
assets and are amortized over approximately ten years, the estimated life of
the sublicenses. The Company believes that the underlying Deferred Royalty Fees
are appropriately recorded as realizable assets, and are being appropriately
amortized over the same period as Deferred Revenue, in accordance with matching
principles under U.S. GAAP.

Deferred royalty fees
consist of the following:

  3/31/05

  12/31/04

  Current Portion

  153,513

  119,763

  Long-term

  688,633

  718,573

  Total

  $

  842,146

  $

  838,336

  3/31/05

  12/31/04

  University of
  Massachusetts

  $

  676,850

  $

  666,919

  Avian Farms

  165,296

  171,417

  Total

  $

  842,146

  $

  838,336

7.  Stockholders’
Equity Transactions

Comment 7:

“For the warrants issued on November 30, 2004, December 13,
2004 and December 30, 2004, please tell us how your accounting for the
warrants issued complies with EITF 96-18 and why you have valued the
warrants at $0.  By valuing the warrants
at $0, this implies that you did not recognize any expense for the services
provided.  In your response please
address your consideration of footnote 1 of EITF 96-18, which states that
the minimum value method specified in paragraph 20 of SFAS 123 is not
acceptable for determining the fair value of non-employee awards by nonpublic
companies.  This comment also applies to
the Form 8-K/A filed on April 18, 2005.”

Response to Comment 7:

For the warrants
specified, the Company valued the warrants using the Black-Scholes pricing
model. The assumptions used by management were based on the contractual terms
where the warrant strike price was greater than the fair market value and the
volatility was estimated to be zero based upon the lack of a public market, and
consistent pricing of recent equity transactions. Given these assumptions, the
fair market value of the warrant granted, calculated

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under the model, was zero. The Company did not exclude volatility in
its considerations, and therefore was not applying the minimum value method of valuation outlined
in FAS #123. Management believes that it appropriately considered footnote 1 of
EITF 96-18, and therefore used the Black-Scholes pricing model to
determine the appropriate value of the warrant granted.

Item 2.  Management’s
Discussion and Analysis and Results of Operations; Results of Operations;
Research and Development Expense and Grant Reimbursements, page 18

Comment 8:

“Please expand your disclosure by referring
to the Division of Corporation Finance ‘Current Issues and Rulemaking Projects
Quarterly Update’ under section VIII-Industry Specific Issues – Accounting
and Disclosure by Companies Engaged in Research and Development
Activities.  You can find it at the
following website address:
http://www.sec.gov/divisions/corpfin/cfcrg032001.htm#secviii.

Please tell us the following information for
each of your major research and development projects and why you have not
included these disclosures in your filing:

a.                                       The current status
of the project;

b.                                       The costs incurred
during each period presented and to date on the project;

c.                                       The nature, timing
and estimated costs of the efforts necessary to complete the project;

d.                                       The anticipated
completion dates;

e.                                       The risks and
uncertainties associated with completing development on schedule, and the
consequences to operations, financial position and liquidity if the project is
not completed timely; and finally

f.                                         The period in which
material net cash inflows from significant projects are expected to commence.

Regarding b, if you do not maintain any
research and development costs by project, disclose that fact and explain why
management does not maintain and evaluate research and development costs by
project.  Provide other quantitative or
qualitative disclosure that indicates the amount of the company’s resources
being used on the project.

Regarding c. and d., disclose the amount or
range of estimated costs and timing to complete the phase in process and each
future phase.  To the extent that information
is not estimable, disclose those facts and circumstances indicating the
uncertainties that preclude you from making a reasonable estimate.”

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Response to Comment 8:

The Company proposes to
revise its disclosure by adding the following language to its Quarterly Report
on Form 10-QSB, page 18, after the first full paragraph under “Research and Development Expenses
and Grant Reimbursements”:

“Our research and
develo