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SEC Comment Letter for PETROSEARCH ENERGY CORP (CIK 0001288382) — Jul 19, 2005

PETROSEARCH ENERGY CORP (CIK 0001288382)
Date: July 19, 2005 · CIK: 0001288382 · Accession: 0000000000-05-036884

AI Filing Summary & Sentiment

File numbers found in text: 333-125539

Date
July 6, 2005
Author
Not clearly detected
Form
UPLOAD
Company
PETROSEARCH ENERGY CORP (CIK 0001288382)

Letter

Mail Stop 3561 July 6, 2005 Richard D. Dole Chief Executive Officer and President Petrosearch Energy Corporation 4801 Woodway, Suite 300E Houston, TX 77056

Re: Petrosearch Energy Corporation Registration Statement on Form SB-2 Filed June 6, 2005 File No. 333-125539

Dear Mr. Dole:

We have reviewed your filing and have the following comments. Where indicated, we think you should revise your document 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 detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. After reviewing this information, we may raise additional comments.

Please understand that the purpose of our review 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.

General 1. In several places in your prospectus you use terms that are industry specific jargon. For example, you use the terms: farm agreements, workover wells, upstream, choke, Hosster gas test, MMcfd and Bcf. Please revise to provide context for these terms so a reader not familiar with your industry can understand your use of these terms.

Prospectus Cover Page 2. Please include, either on your cover page or in your summary the complete mailing address and telephone number of your principle executive offices. Refer to Item 503(b) of Regulation S-B. Prospectus Summary, page 1 3. We note here and other places in your prospectus your use of parenthetical phrases. The meanings of these terms are clear from their context. For example, you define Maverick Drilling Company as ("Maverick") on page 4, the credit facility provided by Fortuna, L.P. as (the "Fortuna Credit Facility") on page 6 and the Securities and Exchange Commission as (the "SEC") on page 15. Parenthetical definitions such as these are unnecessary. Please delete these and all other parenthetical definitions from your prospectus. See Rule 421(c) of Regulation C. 4. Revise to clarify that the summary highlights "material" rather than "selected" information.

Risk Factors, page 2 5. In general, descriptions of risks that describe circumstances that could apply equally to other businesses that are similarly situated are generic risks that should not be included in your risk factor section. Please either eliminate these generic risks, or revise them to state specific material risks to your company or to the purchasers in this offering. For example, we note that the following risk factors appear to contain generic disclosures: * Our approach to title assurance... page 5 * We may experience potential fluctuations... page 6 * We may issue additional shares of common stock...page 8 * Expansion of our exploration program will require capital ... page * Our directors and officers have limited...page 9

Please note these are examples only. Review your entire risk factor section and revise as necessary.

Our limited history makes an evaluation of us and our future extremely difficult, and profits are not assured, page 2 6. Please revise this risk factor to get to the risk as quickly as possible and provide only enough detail to place the risk in context. The actual risk you are trying to convey does not stand out from the details you provide.

We may have conflicts of interest with key personnel, page 4 7. Eliminate the disclosure indicating that you believe the prices with related parties have been competitive since it mitigates the point of the risk.

We are dependent on key personnel, page 5 8. Identify the key personnel upon whom you depend. Also expand to make this risk more specific to your company and explain why you face this risk. For example are any key personnel nearing retirement? As drafted this risk factor is generic.

Potential use of hedging arrangements could result in financial losses or reduce our income, page 5 9. If you do not engage in hedging transactions and do not have plans to engage in hedging transactions, then this is not a risk factor applicable to you. Please revise or delete this risk factor. We have a "Right of First Refusal" agreement with Rock Energy Partners..., page 6 10. Please revise to present this risk in more concrete terms. Your present discussion is confusing to a reader who is not familiar with your industry or with your relationship with Rock Energy Partners.

Oil and Gas Properties Are Subject to Unanticipated Depletion, page 11. This appears to be a generic risk factor that is common to all companies in the industry. Please revise this risk factor to include facts such as the faster than anticipated depletion of your well in North Dakota and the effects it has had on your results.

There is Uncertainty in Estimating Oil and Gas Reserves, page 12 12. Proved reserves are those reserves that the engineering and geological data indicate are reasonably certain of being recovered under current conditions. The wording of this risk factor implies more uncertainty than should be attributed to proved reserves. Please revise this risk factor to not imply that you have anything less than reasonable certainty of recovering the volumes you disclose as proved. If necessary, revise your proved reserves down to the point where you are reasonably certain of recovering those volumes of reserves. Specifically, it now appears that the well in North Dakota will produce less reserves than estimated as of December 31, 2004 and reserves adjusted accordingly.

The Business, page 16 13. To the extent material, please expand your disclosure to include the competitive business conditions you face and the cost and effect of compliance with environmental laws. 14. Also, please revise your disclosure to include a discussion of your reliance upon a small number of customers. We note that you have three customers with one customer accounts for 66 percent of your revenues. Please include the identity of your customers and file as exhibits any contracts you may have with them.

Business Plan, page 17 15. You state that you have identified more than 100 prospects that you intend to drill, subject to completion of acreage acquisition and further technical due diligence. This appears to be a speculative statement that without more support should be removed from the filing. Since you have not acquired the rights to the land, nor performed the due diligence, it appears inappropriate to report to investors that you intend to drill wells on that land.

Corporate Financing, page 18 16. Please provide greater detail concerning the after-payout back-in interest of the subsidiary presidents. As drafted, this obligation is confusing. 17. Also, disclose the status of your borrowings under your revolving credit agreement.

Management`s Discussion and Analysis and Plan of Operations, page 18. Please note that Item 303(b)(1)(i) of Regulation S-B requires, as applicable, a discussion of any known trends, or uncertainties that are reasonably likely to have a material effect on the company`s net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would otherwise cause reported financial information not necessarily to be indicative of future operating results or financial condition. For example, the likely trend in oil prices. Please revise to discuss any known trends or uncertainties. For additional guidance, please refer to SEC Releases 33-6835, 33-8056, and 33-8350.

19. Please revise your disclosures to include a section discussing estimates and assumptions involved in the application of GAAP that have a material impact on reported financial condition and operating performance and on the comparability of such reported information over different reporting periods. Per Item 303(b)(1)(i) of Regulation S-B, you should address material implications of uncertainties associated with the methods, assumptions, and estimates underlying the company`s critical accounting measurements. Such disclosure should supplement, not duplicate, the description of accounting policies that are already disclosed in the notes to the financial statements. The disclosure should provide greater insight into the quality and variability of information regarding financial condition and operating performance. The discussion in your Management`s Discussion and Analysis should present your analysis of the uncertainties involved in applying a principle at a given time or the variability that is reasonably likely to result from its application over time. Refer to Item V of Release Nos. 33- 8350/34- 48960. For each critical accounting policy:

* Discuss why management believes the accounting policy is critical; * Discuss how accurate your estimates and assumptions have been in the past, how much they have changed in the past and whether they are likely to change in the future; * Include quantitative disclosure of your sensitivity to change based on other outcomes that are reasonably likely to occur and that would have a material effect on the company.

Results of Operations, page 25

For the Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003, page 25

20. Enhance your discussions of the changes in financial statement line items to provide a more thoughtful and qualitative discussion and analysis of the reasons for the changes. For example, expand on the change in revenues for the fiscal 2004 as compared to fiscal 2003. Your analysis simply states the revenues from the statement of operations with very little analysis except to say that the increase in sales was due to the number of months of production. Consider adding financial indicators such as number of wells in production and revenue per well to analytically explain the increase in revenues. Similarly, for depletion, depreciation and amortization expense, consider explaining the increase in depletion expense using depletion expense per bbl produced. In general, when explaining the increase in line items, include business reasons for the change and quantify to the extent possible. See Item 303(b)(1) of Regulation S-B.

Lease Operating and Production Tax Expense, page 26 21. Production costs should also include the element of overhead that applies to the management of individual leases and wells. You appear to be utilizing consultants and vendors for much of the work an in- house staff would be performing. Overhead costs such as recompletion evaluation, production engineering and other costs as necessary should be allocated to production costs to the appropriate individual oil and gas properties. Refer to paragraph 27 of FAS 69. Please revise your costs as necessary.

For the Quarter Ended March 31, 2005 Compared to the Quarter Ended March 31, 2004, page 27

22. We note that consolidated oil and production revenue and net income decreased significantly for the quarter ended March 31, compared to the quarter ended March 31, 2004 due primarily to decreased production from your North Dakota well. Please disclose if this decrease in production and revenues represents a trend that is reasonably expected to have a material impact on net sales or net income in the future. See Item 303(b)(1)(iv) of Regulation S-B.

Plan of Operation, page 30 Current Projects, page 30 23. Regarding the project in Williston Basin, North Dakota. Although you have disclosed the decline in production subsequent to December 31, 2004, as this is your largest property, you should also disclose the drop in developed producing reserves brought on by this unanticipated depletion. Please revise your document accordingly. 24. Regarding the Colorado County, Texas project. Please remove the probable and possible reserve estimates of 39 BCF of natural gas. Only proved reserves may be disclosed in filings with the SEC. 25. Regarding the Jefferson County, Mississippi project. Please remove the probable and possible reserve estimates of 76 BCF of natural gas per 640 acre unit. Only proved reserves may be disclosed in filings with the SEC.

Directors, Executive Officers, Promoters and Control Persons, page 26. Item 401(a)(4) of Regulation S-B requires that you provide a brief description of your officers and directors business experience during the last five years. We note that in the description of the background of the directors and officers that there is no specific disclosure about Mr. Noble for the years prior to 2003 and about Mr. Majeres for the years prior to 2004. Please revise or advise. 27. We note the non-interest bearing loan to Mr. Simmons. Please include in your disclosure the business reason for this loan. 28. Also, please include in your disclosure the nature of the consulting services provided by Mr. Agranoff. Certain Relationships and Related Party Transactions, page 44 29. Disclose the amount paid to Maverick Drilling Company.

Selling Stockholder, page 44 30. For each selling stockholder, please disclose how they acquired their shares for resale.

31. Is any selling stockholder a broker-dealer? If so, identify that stockholder as an underwriter. 32. For each selling stockholder that is an affiliate of a broker- dealer, disclose if true:

a. The seller purchased the securities to be resold in the ordinary course of business; and

b. At the time of the purchase, the seller had no agreements or understandings directly or indirectly, with any person to distribute the securities.

Alternatively, disclose that the stockholder is an underwriter. We may have additional comments upon review of your response. 33. We note that for several of your selling stockholders you do not disclose the natural person(s) or public company that has the ultimate voting or investment control over the shares held. For example, we note that you have not provided this information for North Sound Legacy Institutional Fund LLC, North Sound Legacy International Ltd., Corsair Capital Partners, L.P. and GLC North America Opportunity. Please provide this information for each selling stockholder. See Interp. I.60 of Telephone Interp. Manual (July 1997) and Interp.4S of Reg. S-K section of 3/99 Supp. to Manual.

Plan of Distribution, page 49 34. Please confirm that you have informed the selling stockholders of their duties and obligations pursuant to Regulation M, specifically Rule 102, with respect to the distribution of the securities being registered pursuant to the registration statement. In addition, please confirm that any prospective "distribution participant," as this term is defined under Regulation M, will be informed of their duties and obligations. Pursuant to Rule 461(b)(7), we will take into consideration your response in granting acceleration of effectiveness of the registration statement. 35. We note your disclosure regarding hedging transactions. Please be advised that short sales of common stock "against the box" that are covered with shares subject to this registration statement cannot be made before the registration statement becomes effective. It is our view that shares underlying the short sale are deemed to be sold at the time the sale is made and, prior to effectiveness, this would constitute a violation of Section 5. Please confirm your understanding.

Description of Securities, page 50 36. Please remove the statement that your description "does not purport to be complete." 37. You state that the outstanding shares of common stock are fully paid and non-assessable. This is a legal conclusion that only your counse

Show Raw Text
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<TEXT>

Mail Stop 3561

      July 6, 2005

Richard D. Dole
Chief Executive Officer and President
Petrosearch Energy Corporation
4801 Woodway, Suite 300E
Houston, TX 77056

      Re:	Petrosearch Energy Corporation
      Registration Statement on Form SB-2
      Filed June 6, 2005
		File No. 333-125539

Dear Mr. Dole:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document 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 detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

      Please understand that the purpose of our review 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.

General
1. In several places in your prospectus you use terms that are
industry specific jargon.  For example, you use the terms: farm
agreements, workover wells, upstream, choke, Hosster gas test,
MMcfd
and Bcf.  Please revise to provide context for these terms so a
reader not familiar with your industry can understand your use of
these terms.

Prospectus Cover Page
2. Please include, either on your cover page or in your summary
the
complete mailing address and telephone number of your principle
executive offices.  Refer to Item 503(b) of Regulation S-B.
Prospectus Summary, page 1
3. We note here and other places in your prospectus your use of
parenthetical phrases.  The meanings of these terms are clear from
their context.  For example, you define Maverick Drilling Company
as
("Maverick") on page 4, the credit facility provided by Fortuna,
L.P.
as (the "Fortuna Credit Facility") on page 6 and the Securities
and
Exchange Commission as (the "SEC") on page 15.  Parenthetical
definitions such as these are unnecessary.  Please delete these
and
all other parenthetical definitions from your prospectus.  See
Rule
421(c) of Regulation C.
4. Revise to clarify that the summary highlights "material" rather
than "selected" information.

Risk Factors, page 2
5. In general, descriptions of risks that describe circumstances
that
could apply equally to other businesses that are similarly
situated
are generic risks that should not be included in your risk factor
section.  Please either eliminate these generic risks, or revise
them
to state specific material risks to your company or to the
purchasers
in this offering.  For example, we note that the following risk
factors appear to contain generic disclosures:
* Our approach to title assurance... page 5
* We may experience potential fluctuations... page 6
* We may issue additional shares of common stock...page 8
* Expansion of our exploration program will require capital ...
page
8
* Our directors and officers have limited...page 9

Please note these are examples only.  Review your entire risk
factor
section and revise as necessary.

Our limited history makes an evaluation of us and our future
extremely difficult, and profits are not assured, page 2
6. Please revise this risk factor to get to the risk as quickly as
possible and provide only enough detail to place the risk in
context.
The actual risk you are trying to convey does not stand out from
the
details you provide.

We may have conflicts of interest with key personnel, page 4
7. Eliminate the disclosure indicating that you believe the prices
with related parties have been competitive since it mitigates the
point of the risk.

We are dependent on key personnel, page 5
8. Identify the key personnel upon whom you depend.  Also expand
to
make this risk more specific to your company and explain why you
face
this risk.  For example are any key personnel nearing retirement?
As
drafted this risk factor is generic.

Potential use of hedging arrangements could result in financial
losses or reduce our income, page 5
9. If you do not engage in hedging transactions and do not have
plans
to engage in hedging transactions, then this is not a risk factor
applicable to you.  Please revise or delete this risk factor.
We have a "Right of First Refusal" agreement with Rock Energy
Partners..., page 6
10. Please revise to present this risk in more concrete terms.
Your
present discussion is confusing to a reader who is not familiar
with
your industry or with your relationship with Rock Energy Partners.

Oil and Gas Properties Are Subject to Unanticipated Depletion,
page
11
11. This appears to be a generic risk factor that is common to all
companies in the industry.  Please revise this risk factor to
include
facts such as the faster than anticipated depletion of your well
in
North Dakota and the effects it has had on your results.

There is Uncertainty in Estimating Oil and Gas Reserves, page 12
12. Proved reserves are those reserves that the engineering and
geological data indicate are reasonably certain of being recovered
under current conditions.   The wording of this risk factor
implies
more uncertainty than should be attributed to proved reserves.
Please revise this risk factor to not imply that you have anything
less than reasonable certainty of recovering the volumes you
disclose
as proved.  If necessary, revise your proved reserves down to the
point where you are reasonably certain of recovering those volumes
of
reserves.  Specifically, it now appears that the well in North
Dakota
will produce less reserves than estimated as of December 31, 2004
and
reserves adjusted accordingly.

The Business, page 16
13. To the extent material, please expand your disclosure to
include
the competitive business conditions you face and the cost and
effect
of compliance with environmental laws.
14. Also, please revise your disclosure to include a discussion of
your reliance upon a small number of customers.  We note that you
have three customers with one customer accounts for 66 percent of
your revenues.  Please include the identity of your customers and
file as exhibits any contracts you may have with them.

Business Plan, page 17
15. You state that you have identified more than 100 prospects
that
you intend to drill, subject to completion of acreage acquisition
and
further technical due diligence.  This appears to be a speculative
statement that without more support should be removed from the
filing.  Since you have not acquired the rights to the land, nor
performed the due diligence, it appears inappropriate to report to
investors that you intend to drill wells on that land.

Corporate Financing, page 18
16. Please provide greater detail concerning the after-payout
back-in
interest of the subsidiary presidents.  As drafted, this
obligation
is confusing.
17. Also, disclose the status of your borrowings under your
revolving
credit agreement.

Management`s Discussion and Analysis and Plan of Operations, page
25
18. Please note that Item 303(b)(1)(i) of Regulation S-B requires,
as
applicable, a discussion of any known trends, or uncertainties
that
are reasonably likely to have a material effect on the company`s
net
sales or revenues, income from continuing operations,
profitability,
liquidity or capital resources, or that would otherwise cause
reported financial information not necessarily to be indicative of
future operating results or financial condition.  For example, the
likely trend in oil prices.  Please revise to discuss any known
trends or uncertainties.  For additional guidance, please refer to
SEC Releases 33-6835, 33-8056, and 33-8350.

19. Please revise your disclosures to include a section discussing
estimates and assumptions involved in the application of GAAP that
have a material impact on reported financial condition and
operating
performance and on the comparability of such reported information
over different reporting periods.  Per Item 303(b)(1)(i) of
Regulation S-B, you should address material implications of
uncertainties associated with the methods, assumptions, and
estimates
underlying the company`s critical accounting measurements.  Such
disclosure should supplement, not duplicate, the description of
accounting policies that are already disclosed in the notes to the
financial statements. The disclosure should provide greater
insight
into the quality and variability of information regarding
financial
condition and operating performance.  The discussion in your
Management`s Discussion and Analysis should present your analysis
of
the uncertainties involved in applying a principle at a given time
or
the variability that is reasonably likely to result from its
application over time.  Refer to Item V of Release Nos. 33-
8350/34-
48960.  For each critical accounting policy:

* Discuss why management believes the accounting policy is
critical;
* Discuss how accurate your estimates and assumptions have been in
the past, how much they have changed in the past and whether they
are
likely to change in the future;
* Include quantitative disclosure of your sensitivity to change
based
on other outcomes that are reasonably likely to occur and that
would
have a material effect on the company.

Results of Operations, page 25

For the Year Ended December 31, 2004 Compared to the Year Ended
December 31, 2003, page 25

20. Enhance your discussions of the changes in financial statement
line items to provide a more thoughtful and qualitative discussion
and analysis of the reasons for the changes.  For example, expand
on
the change in revenues for the fiscal 2004 as compared to fiscal
2003.  Your analysis simply states the revenues from the statement
of
operations with very little analysis except to say that the
increase
in sales was due to the number of months of production.  Consider
adding financial indicators such as number of wells in production
and
revenue per well to analytically explain the increase in revenues.
Similarly, for depletion, depreciation and amortization expense,
consider explaining the increase in depletion expense using
depletion
expense per bbl produced.  In general, when explaining the
increase
in line items, include business reasons for the change and
quantify
to the extent possible.  See Item 303(b)(1) of Regulation S-B.

Lease Operating and Production Tax Expense, page 26
21. Production costs should also include the element of overhead
that
applies to the management of individual leases and wells.  You
appear
to be utilizing consultants and vendors for much of the work an
in-
house staff would be performing.  Overhead costs such as
recompletion
evaluation, production engineering and other costs as necessary
should be allocated to production costs to the appropriate
individual
oil and gas properties.  Refer to paragraph 27 of FAS 69.  Please
revise your costs as necessary.

For the Quarter Ended March 31, 2005 Compared to the Quarter Ended
March 31, 2004, page 27

22. We note that consolidated oil and production revenue and net
income decreased significantly for the quarter ended March 31,
2005
compared to the quarter ended March 31, 2004 due primarily to
decreased production from your North Dakota well.  Please disclose
if
this decrease in production and revenues represents a trend that
is
reasonably expected to have a material impact on net sales or net
income in the future.  See Item 303(b)(1)(iv) of Regulation S-B.

Plan of Operation, page 30
Current Projects, page 30
23. Regarding the project in Williston Basin, North Dakota.
Although
you have disclosed the decline in production subsequent to
December
31, 2004, as this is your largest property, you should also
disclose
the drop in developed producing reserves brought on by this
unanticipated depletion.  Please revise your document accordingly.
24. Regarding the Colorado County, Texas project.  Please remove
the
probable and possible reserve estimates of 39 BCF of natural gas.
Only proved reserves may be disclosed in filings with the SEC.
25. Regarding the Jefferson County, Mississippi project.  Please
remove the probable and possible reserve estimates of 76 BCF of
natural gas per 640 acre unit.  Only proved reserves may be
disclosed
in filings with the SEC.

  Directors, Executive Officers, Promoters and Control Persons,
page
34
26. Item 401(a)(4) of Regulation S-B requires that you provide a
brief description of your officers and directors business
experience
during the last five years.  We note that in the description of
the
background of the directors and officers that there is no specific
disclosure about Mr. Noble for the years prior to 2003 and about
Mr.
Majeres for the years prior to 2004.  Please revise or advise.
27. We note the non-interest bearing loan to Mr. Simmons.  Please
include in your disclosure the business reason for this loan.
28. Also, please include in your disclosure the nature of the
consulting services provided by Mr. Agranoff.
Certain Relationships and Related Party Transactions, page 44
29. Disclose the amount paid to Maverick Drilling Company.

Selling Stockholder, page 44
30. For each selling stockholder, please disclose how they
acquired
their shares for resale.

31. Is any selling stockholder a broker-dealer?  If so, identify
that
stockholder as an underwriter.
32. For each selling stockholder that is an affiliate of a broker-
dealer, disclose if true:

a. The seller purchased the securities to be resold in the
ordinary
course of business; and

b. At the time of the purchase, the seller had no agreements or
understandings directly or indirectly, with any person to
distribute
the securities.

Alternatively, disclose that the stockholder is an underwriter.
We
may have additional comments upon review of your response.
33. We note that for several of your selling stockholders you do
not
disclose the natural person(s) or public company that has the
ultimate voting or investment control over the shares held.  For
example, we note that you have not provided this information for
North Sound Legacy Institutional Fund LLC, North Sound Legacy
International Ltd., Corsair Capital Partners, L.P. and GLC North
America Opportunity.  Please provide this information for each
selling stockholder.  See Interp. I.60 of Telephone Interp. Manual
(July 1997) and Interp.4S of Reg. S-K section of 3/99 Supp. to
Manual.

Plan of Distribution, page 49
34. Please confirm that you have informed the selling stockholders
of
their duties and obligations pursuant to Regulation M,
specifically
Rule 102, with respect to the distribution of the securities being
registered pursuant to the registration statement.  In addition,
please confirm that any prospective "distribution participant," as
this term is defined under Regulation M, will be informed of their
duties and obligations.  Pursuant to Rule 461(b)(7), we will take
into consideration your response in granting acceleration of
effectiveness of the registration statement.
35. We note your disclosure regarding hedging transactions.
Please
be advised that short sales of common stock "against the box" that
are covered with shares subject to this registration statement
cannot
be made before the registration statement becomes effective.  It
is
our view that shares underlying the short sale are deemed to be
sold
at the time the sale is made and, prior to effectiveness, this
would
constitute a violation of Section 5.  Please confirm your
understanding.

Description of Securities, page 50
36. Please remove the statement that your description "does not
purport to be complete."
37. You state that the outstanding shares of common stock are
fully
paid and non-assessable.  This is a legal conclusion that only
your
counse