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SEC Comment Letter for Quantum Ventures Inc. (CIK 0001301843) — Oct 20, 2004

Quantum Ventures Inc. (CIK 0001301843)
Date: Oct. 20, 2004 · CIK: 0001301843 · Accession: 0000000000-04-033690

AI Filing Summary & Sentiment

File numbers found in text: 333-119146

Date
October 20, 2004
Author
President
Form
UPLOAD
Company
Quantum Ventures Inc. (CIK 0001301843)

Letter

Mail Stop 4-6 October 20, 2004 Mr. Desmond Ross President Quantum Ventures, Inc. 1224 Washington Avenue Miami Beach Florida, 33139

RE: Quantum Ventures, Inc. Registration Statement on Form SB-2 File No. 333-119146

Dear Mr. Ross:

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 supplemental information so we may better understand your disclosure. After reviewing this information, we may or may not 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 on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.

FORM SB-2

General

1. In reviewing your registration statement, we note that it contains many internal inconsistencies and, in some cases, disclosure that appears to belong in the registration statement of other companies, specifically Quadra Ventures, Inc. For example, the description of your competition just before the end of page 23 describes a software program that protects web sites from unwanted intruders and later mentions a Quadra product, Forcefield. Please revise.

2. A review of the business plan, purpose, as well as the surrounding facts contained in the registration statement, raises a question as to whether Quantum Ventures, Inc. is a "blank check" company, which is required to conduct its offering in compliance with the provisions of Rule 419. In this regard, it appears that Quantum Ventures, Inc. will be unable to conduct its planned operations if additional funding is not raised within a short period of time, yet there appears to be no efforts in this area. We further note you acquired the rights to certain technology under the trade name "MediFlow," in May 2004 from 3493734 Manitoba Ltd, but you have no concrete arrangements or agreements to further develop or commercialize the software. Further, your registration statement contains very general disclosure related to the nature of your business plan.

As you know, Section (a)(2) of Rule 419 defines a blank check company as a company that is issuing penny stock and that is "a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity." In discussing this definition in the adopting release, the Commission stated that it would "scrutinize registered offerings for attempts to create the appearance that the registrant is not a [blank check], in an effort to avoid the application of Rule 419. (See Securities Act Release No. 6932 of April 13, 1992, 51 SEC Docket 0388). In carrying out this mandate, the staff`s assessment of your status under the definition can be based only upon the public representation of its proposed business in the registration statement. If Quantum Ventures, Inc. believes that it does not fall within the definition of a blank check company, appropriate disclosure to demonstrate Quantum`s status as a non-blank check company should be included in the registration statement. In this regard, disclose whether you have any current plans, arrangements, commitments or understandings to engage in a merger or acquisition with another company.

3. Please advise of the relationship of Larry Cherrett to 3493734 Manitoba, Ltd. In this regard, we note that Mr. Cherrett was the authorized signatory to the Technology Purchase Agreement for the MediFlow software that you purchased in May 2004.

4. Please advise of the need for any blue sky registration. We do not understand your statement in Part II of your registration statement that expenses in this area will be "nil."

Prospectus Cover Page

5. Please include Quantum`s address and phone number on either the cover page or in the summary section of the prospectus. See Item 503(b) of Regulation S-B.

6. Item 501(a)(5) of Regulation S-B requires you to highlight the cross reference to the risk factors section and page by prominent type or in another manner. Highlight this cross-reference using, for example, bold-faced type.

Special Note Regarding Forward-Looking Statements

7. We note that you intend to rely upon the statutory safe harbors afforded by the Private Litigation Reform Act of 1995. See, for example, your reference to Section 27A of the Securities Act and Section 21E of the Exchange Act. Both the Securities Act and the Exchange Act expressly exclude statements made in connection with an IPO from the safe harbor. Please either delete any references to the Litigation Reform Act or make clear each time that you reference the Act that the safe harbor does not apply to initial public offerings.

8. Your disclosure requests safe harbor from statements concerning "anticipated trends in our industry..." and "market data from articles published... and other sources." However, we find none of these specific statements in your submission. We strongly encourage you to provide market data and expand on trends, but if you decide not to disclose them, please remove the references. Please also note that any language suggesting that you do not (or cannot) take responsibility for the market data is inappropriate.

Prospectus Summary, page 3 9. We note that the introductory paragraph to your summary states that the summary does not contain all of the information that may be important. A summary by its very nature is not required to contain all of the detailed information required in a prospectus. However, if you include a summary in your prospectus, it must be complete. Please revise. 10. For balanced disclosure, please state that you have had: no revenues to date; extremely limited operations; and a going concern report issued by your independent accountant. Further, you should indicate that you have relied upon the sale of your securities to fund operations to date.

11. You note an intent to "invest in certain equipment." Yet, you do not mention equipment elsewhere in your disclosure. Please provide a description of your equipment purchases in your Plan of Operation. See Item 303(a)(iii) of Regulation S-B.

12. You state that you acquired the Mediflow software on May 18, 2004. Advise when both components of the purchase price (i.e., the $5000 cash consideration and the 100,000 shares) were paid, since we are unable to reconcile this disclosure with the number of shares outstanding as of June 30, 2003 and your recent sales of unregistered securities discussion. If, in this "time is of the essence" contract, the purchase price was not paid in conjunction with the execution of the agreement please also supplementally advise whether or not you are in default of the agreement.

Risk Factors, page 4 13. Clarify in the first paragraph of this section that you discuss all "material" risks. 14. The following comments are examples of the changes that should be made in this section. However, do not limit your changes to only these; you should reconsider and revise all of the disclosure as appropriate, since many of your risk factor captions are too vague and generic or do not substantially describe the nature of the risk or harm to the potential shareholder. A caption is probably too generic if: * It may be readily transferable to other offering documents; * It describes circumstances that may apply equally to other businesses that are similarly situated; * It states facts without specifying a consequent risk; or * It is speculative in nature. See, for example, the following risk factors that appear to be generic or appear to address matters that do not raise material or concrete risks: * Any additional financing... * If unable to sell a marketable product... * To date, we have not paid any cash dividends... * We face intensive competition within the Software... * If we are not able to develop a customer base... * If we are not able to adapt to rapid technology change... These, and most other subheadings/risk factors could apply to any business. Revise your subheadings to state a specific material risk that is narrowly tailored to address your risk factors. You should describe, clearly and concretely, the nature of the specific risk or harm in your subheadings. Discussion of facts that do not create a material risk to the potential investor should be moved to the body of the prospectus. Please review Staff Legal Bulletin number 7, available online at www.sec.gov and revise the risk factors section appropriately. 15. This section appears to omit several material risks. For example, consider disclosing risk factors that address the following, if appropriate:

* Your officers/directors have no experience in running the business you propose to enter, specifically Mr. Ross, who you indicate will serve in numerous capacities, including, Chief Financial and Accounting Officer;

* Only two persons discharge all of the management functions in Quantum Ventures and are allocating minimal time to the operations;

* If your software program is not further developed, investors will be shareholders in a company with no business or prospects to raise revenues.

Selling Security Holders, page 14

16. We note from your recent sales of unregistered securities disclosure that you did not use an underwriter in your Regulation S offering to Canadian purchasers in June 2004. Please advise how you located the Canadian purchasers. In this regard, we note that Quantum is headquartered in Florida and incorporated in Nevada.

Plan of Distribution, page 15 17. Provide the information required by Item 505 of Regulation S-B regarding the factors considered in determining the $.01 offering price.

18. Supplementally inform us of any ongoing discussion with the market maker that anticipates quoting your stock. Make sure to disclose in your risk factors the possibility that no one may make a market for your stock.

19. Explain the reference to being quoted on a "national securities exchange." In this regard, it does not appear that you currently meet any qualitative or quantitative standards for listing on an exchange.

20. In your discussion on page 15 regarding filing a post-effective amendment to your registration statement if you engage a broker- dealer, please clarify that you also would have to file materials with the Corporate Finance Department of the NASD.

Directors, Executive Officers, Promoters and Control Persons, page 17

21. Your summary notes that officers are "appointed by the board... except to the extent governed by employment contract." Please clarify that there are no current employment contracts.

22. Quantum was incorporated on April 14, 2004; however, Mr. Nittritz is listed as Secretary/Treasurer since April 14, 2003. Please reconcile.

23. Supplementally, advise whether any company with whom Mr. Ross or Mr. Nittritz is affiliated is conducting or proposes to conduct an offering of securities.

24. Please confirm that other than Mr. Ross, no person could be deemed a promoter. See Item 404(d) of Regulation S-B.

25. Expand the titles of Mr. Ross to indicate that he also is serving as Chief Financial Officer. Indicate in his biographical information whether Mr. Ross has any accounting and/or finance background.

Disclosure of Commission Position of Indemnification for Securities Act Liabilities, page 20

26. Please confirm the accuracy of the Nevada Revised Statutes describing officer and director indemnification. It appears your citation to NRS 78.502 might actually be NRS 78.7502.

Description of Business, page 22 Business of Issuer, page 22

27. We note that Quantum has at least one subsidiary, QV Ventures LTD. Please revise your disclosure to include the information required by Item 101(a) of Regulation S-B for each subsidiary.

Current and Planned Development, page 22

28. Describe in greater detail, 3493743 Manitoba Ltd. Supplementally confirm that there are no related party transactions between Quantum and 3493743.

29. In conjunction with your response to Comment 3, disclose in greater detail the role of Larry Cherrett in the software acquisition. Is Mr. Cherrett a software developer, owner, or agent? Your disclosures use various terms to describe his position in 3493743.

30. Who was responsible for the development of the Mediflow Software before it was purchased by Quantum?

31. Disclose in greater detail the operational capability of Mediflow including more detail on its current capacity to track patients` medical history, diagnosis and treatment.

32. Your Technology Purchase Agreement dated May 18, 2004 indicates the Mediflow software could be a "Medical search engine." Please disclose the functionality of this portion of the program.

33. Your disclosure describes "Business associates" that have been testing, implementing and designing the Mediflow program and demonstration sites. Please disclose more information on these "Business associates" and other outside parties including their experience, compensation, and role within Quantum.

34. Please describe your calculations in estimating the $255,000 needed to complete development of the Mediflow Program.

35. Disclose in greater details your process for obtaining additional funding including anticipated mergers and debt or equity fundraising efforts.

36. Please complete the sentence: "Our marketing strategy is proposed to be directed toward the [ ] located in the U.S. or Canada."

Intellectual Property, page 23

37. Please advise of your rights to the Internet domain name www.Quantumventures.com. It appears that the domain is currently hosting an entrepreneurship site offering marketing and success coaching for a profit. Additionally, please advise whether you have retained abacushosting to develop any Internet sites.

38. Your disclosure indicates you will rely on a combination of trademark and other protection to protect your intellectual property. Do you currently have any protections in place as of the date of the registration statement?

39. A company at www.mediflow.com appears to have registered the name Mediflow and currently markets and sells a water-based pillow. How will this affect your intellectual property rights and business plan?

40. Please describe the material terms of your confidentiality agreements described on page 23. Please provide information on who has signed the agreements and file either the agreements, or a form thereof, as an exhibit to your registration statement.

Competition, page 23 41. We understand there is no "software application industry;" rather software industries are generally organized around the functionality of the software product. Please revise. 42. Please discuss in greater detail your relative position in the current market in which you operate, including quantitive and qualitative information on your relative position. Also please list by name specific competitors for your software product.

Government Relations, page 23

43. The Government Relations section appears overly broad. While a discussion of the Internet regulation is useful, your disclosure should describe specific regulations that may be applicable to your business. Please include privacy and other concerns directly related to the medical software industry.

44. Your disclosure indicates a specific desire to enter into the Canadian Market. Please describe any applicable Canadian governmental regulations.

Re

Show Raw Text
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Mail Stop 4-6

October 20, 2004

Mr. Desmond Ross
President
Quantum Ventures, Inc.
1224 Washington Avenue
Miami Beach Florida, 33139

RE:	Quantum Ventures, Inc.
Registration Statement on Form SB-2
File No. 333-119146

Dear Mr. Ross:

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 supplemental
information so we may better understand your disclosure.  After
reviewing this information, we may or may not 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 on any other aspect of our review.  Feel
free to call us at the telephone numbers listed at the end of this
letter.

FORM SB-2

General

1. In reviewing your registration statement, we note that it contains
many internal inconsistencies and, in some cases, disclosure that
appears to belong in the registration statement of other companies,
specifically Quadra Ventures, Inc.  For example, the description of
your competition just before the end of page 23 describes a software
program that protects web sites from unwanted intruders and later
mentions a Quadra product, Forcefield. Please revise.

2. A review of the business plan, purpose, as well as the surrounding
facts contained in the registration statement, raises a question as to
whether Quantum Ventures, Inc. is a "blank check" company, which is
required to conduct its offering in compliance with the provisions of
Rule 419.  In this regard, it appears that Quantum Ventures, Inc. will
be unable to conduct its planned operations if additional funding is
not raised within a short period of time, yet there appears to be no
efforts in this area.  We further note you acquired the rights to
certain technology under the trade name "MediFlow," in May 2004 from
3493734 Manitoba Ltd, but you have no concrete arrangements or
agreements to further develop or commercialize the software.  Further,
your registration statement contains very general disclosure related
to the nature of your business plan.

As you know, Section (a)(2) of Rule 419 defines a blank check company
as a company that is issuing penny stock and that is "a development
stage company that has no specific business plan or purpose or has
indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies, or other
entity."  In discussing this definition in the adopting release, the
Commission stated that it would "scrutinize registered offerings for
attempts to create the appearance that the registrant is not a [blank
check], in an effort to avoid the application of Rule 419. (See
Securities Act Release No. 6932 of April 13, 1992, 51 SEC Docket
0388).  In carrying out this mandate, the staff`s assessment of your
status under the definition can be based only upon the public
representation of its proposed business in the registration statement.
If Quantum Ventures, Inc. believes that it does not fall within the
definition of a blank check company, appropriate disclosure to
demonstrate Quantum`s status as a non-blank check company should be
included in the registration statement.  In this regard, disclose
whether you have any current plans, arrangements, commitments or
understandings to engage in a merger or acquisition with another
company.

3. Please advise of the relationship of Larry Cherrett to 3493734
Manitoba, Ltd.  In this regard, we note that Mr. Cherrett was the
authorized signatory to the Technology Purchase Agreement for the
MediFlow software that you purchased in May 2004.

4. Please advise of the need for any blue sky registration. We do not
understand your statement in Part II of your registration statement
that expenses in this area will be "nil."

Prospectus Cover Page

5. Please include Quantum`s address and phone number on either the
cover page or in the summary section of the prospectus. See Item
503(b) of Regulation S-B.

6. Item 501(a)(5) of Regulation S-B requires you to highlight the
cross reference to the risk factors section and page by prominent type
or in another manner.  Highlight this cross-reference using, for
example, bold-faced type.

Special Note Regarding Forward-Looking Statements

7. We note that you intend to rely upon the statutory safe harbors
afforded by the Private Litigation Reform Act of 1995.  See, for
example, your reference to Section 27A of the Securities Act and
Section 21E of the Exchange Act. Both the Securities Act and the
Exchange Act expressly exclude statements made in connection with an
IPO from the safe harbor.  Please either delete any references to the
Litigation Reform Act or make clear each time that you reference the
Act that the safe harbor does not apply to initial public offerings.

8. Your disclosure requests safe harbor from statements concerning
"anticipated trends in our industry..." and "market data from articles
published... and other sources." However, we find none of these
specific statements in your submission.  We strongly encourage you to
provide market data and expand on trends, but if you decide not to
disclose them, please remove the references.  Please also note that
any language suggesting that you do not (or cannot) take
responsibility for the market data is inappropriate.

Prospectus Summary, page 3
9. We note that the introductory paragraph to your summary states that
the summary does not contain all of the information that may be
important.  A summary by its very nature is not required to contain
all of the detailed information required in a prospectus.  However, if
you include a summary in your prospectus, it must be complete.  Please
revise.
10. For balanced disclosure, please state that you have had: no
revenues to date; extremely limited operations; and a going concern
report issued by your independent accountant.  Further, you should
indicate that you have relied upon the sale of your securities to fund
operations to date.

11. You note an intent to "invest in certain equipment." Yet, you do
not mention equipment elsewhere in your disclosure. Please provide a
description of your equipment purchases in your Plan of Operation. See
Item 303(a)(iii) of Regulation S-B.

12. You state that you acquired the Mediflow software on May 18, 2004.
Advise when both components of the purchase price (i.e., the $5000
cash consideration and the 100,000 shares) were paid, since we are
unable to reconcile this disclosure with the number of shares
outstanding as of June 30, 2003 and your recent sales of unregistered
securities discussion. If, in this "time is of the essence" contract,
the purchase price was not paid in conjunction with the execution of
the agreement please also supplementally advise whether or not you are
in default of the agreement.

Risk Factors, page 4
13. Clarify in the first paragraph of this section that you discuss
all "material" risks.
14. The following comments are examples of the changes that should be
made in this section.  However, do not limit your changes to only
these; you should reconsider and revise all of the disclosure as
appropriate, since many of your risk factor captions are too vague and
generic or do not substantially describe the nature of the risk or
harm to the potential shareholder.  A caption is probably too generic
if:
* It may be readily transferable to other offering documents;
* It describes circumstances that may apply equally to other
businesses that are similarly situated;
* It states facts without specifying a consequent risk; or
* It is speculative in nature.
See, for example, the following risk factors that appear to be generic
or appear to address matters that do not raise material or concrete
risks:
* Any additional financing...
* If unable to sell a marketable product...
* To date, we have not paid any cash dividends...
* We face intensive competition within the Software...
* If we are not able to develop a customer base...
* If we are not able to adapt to rapid technology change...
These, and most other subheadings/risk factors could apply to any
business.  Revise your subheadings to state a specific material risk
that is narrowly tailored to address your risk factors. You should
describe, clearly and concretely, the nature of the specific risk or
harm in your subheadings.
Discussion of facts that do not create a material risk to the
potential investor should be moved to the body of the prospectus.
Please review Staff Legal Bulletin number 7, available online at
www.sec.gov and revise the risk factors section appropriately.
15. This section appears to omit several material risks.  For example,
consider disclosing risk factors that address the following, if
appropriate:

* Your officers/directors have no experience in running the business
you propose to enter, specifically Mr. Ross, who you indicate will
serve in numerous capacities, including, Chief Financial and
Accounting Officer;

* Only two persons discharge all of the management functions in
Quantum Ventures and are allocating minimal time to the operations;

* If your software program is not further developed, investors will be
shareholders in a company with no business or prospects to raise
revenues.

Selling Security Holders, page 14

16. We note from your recent sales of unregistered securities
disclosure that you did not use an underwriter in your Regulation S
offering to Canadian purchasers in June 2004. Please advise how you
located the Canadian purchasers.  In this regard, we note that Quantum
is headquartered in Florida and incorporated in Nevada.

Plan of Distribution, page 15
17. Provide the information required by Item 505 of Regulation S-B
regarding the factors considered in determining the $.01 offering
price.

18.  Supplementally inform us of any ongoing discussion with the
market maker that anticipates quoting your stock.  Make sure to
disclose in your risk factors the possibility that no one may make a
market for your stock.

19. Explain the reference to being quoted on a "national securities
exchange."  In this regard, it does not appear that you currently meet
any qualitative or quantitative standards for listing on an exchange.

20. In your discussion on page 15 regarding filing a post-effective
amendment to your registration statement if you engage a broker-
dealer, please clarify that you also would have to file materials with
the Corporate Finance Department of the NASD.

Directors, Executive Officers, Promoters and Control Persons, page 17

21. Your summary notes that officers are "appointed by the board...
except to the extent governed by employment contract." Please clarify
that there are no current employment contracts.

22. Quantum was incorporated on April 14, 2004; however, Mr. Nittritz
is listed as Secretary/Treasurer since April 14, 2003.  Please
reconcile.

23. Supplementally, advise whether any company with whom Mr. Ross or
Mr. Nittritz is affiliated is conducting or proposes to conduct an
offering of securities.

24. Please confirm that other than Mr. Ross, no person could be deemed
a promoter. See Item 404(d) of Regulation S-B.

25. Expand the titles of Mr. Ross to indicate that he also is serving
as Chief Financial Officer. Indicate in his biographical information
whether Mr. Ross has any accounting and/or finance background.

Disclosure of Commission Position of Indemnification for Securities
Act Liabilities, page 20

26. Please confirm the accuracy of the Nevada Revised Statutes
describing officer and director indemnification.  It appears your
citation to NRS 78.502 might actually be NRS 78.7502.

Description of Business, page 22
Business of Issuer, page 22

27. We note that Quantum has at least one subsidiary, QV Ventures LTD.
Please revise your disclosure to include the information required by
Item 101(a) of Regulation S-B for each subsidiary.

Current and Planned Development, page 22

28. Describe in greater detail, 3493743 Manitoba Ltd. Supplementally
confirm that there are no related party transactions between Quantum
and 3493743.

29. In conjunction with your response to Comment 3, disclose in
greater detail the role of Larry Cherrett in the software acquisition.
Is Mr. Cherrett a software developer, owner, or agent? Your
disclosures use various terms to describe his position in 3493743.

30. Who was responsible for the development of the Mediflow Software
before it was purchased by Quantum?

31. Disclose in greater detail the operational capability of Mediflow
including more detail on its current capacity to track patients`
medical history, diagnosis and treatment.

32. Your Technology Purchase Agreement dated May 18, 2004 indicates
the Mediflow software could be a "Medical search engine."  Please
disclose the functionality of this portion of the program.

33. Your disclosure describes "Business associates" that have been
testing, implementing and designing the Mediflow program and
demonstration sites. Please disclose more information on these
"Business associates" and other outside parties including their
experience, compensation, and role within Quantum.

34. Please describe your calculations in estimating the $255,000
needed to complete development of the Mediflow Program.

35. Disclose in greater details your process for obtaining additional
funding including anticipated mergers and debt or equity fundraising
efforts.

36. Please complete the sentence: "Our marketing strategy is proposed
to be directed toward the [	] located in the U.S. or Canada."

Intellectual Property, page 23

37. Please advise of your rights to the Internet domain name
www.Quantumventures.com. It appears that the domain is currently
hosting an entrepreneurship site offering marketing and success
coaching for a profit. Additionally, please advise whether you have
retained abacushosting to develop any Internet sites.

38. Your disclosure indicates you will rely on a combination of
trademark and other protection to protect your intellectual property.
Do you currently have any protections in place as of the date of the
registration statement?

39. A company at www.mediflow.com appears to have registered the name
Mediflow and currently markets and sells a water-based pillow. How
will this affect your intellectual property rights and business plan?

40. Please describe the material terms of your confidentiality
agreements described on page 23.  Please provide information on who
has signed the agreements and file either the agreements, or a form
thereof, as an exhibit to your registration statement.

Competition, page 23
41. We understand there is no "software application industry;" rather
software industries are generally organized around the functionality
of the software product.  Please revise.
42. Please discuss in greater detail your relative position in the
current market in which you operate, including quantitive and
qualitative information on your relative position. Also please list by
name specific competitors for your software product.

Government Relations, page 23

43. The Government Relations section appears overly broad. While a
discussion of the Internet regulation is useful, your disclosure
should describe specific regulations that may be applicable to your
business. Please include privacy and other concerns directly related
to the medical software industry.

44. Your disclosure indicates a specific desire to enter into the
Canadian Market. Please describe any applicable Canadian governmental
regulations.

Re