SEC Company Response from Quantum Ventures Inc. (CIK 0001301843) — Dec 20, 2004
Quantum Ventures Inc. (CIK 0001301843)
Date: Dec. 20, 2004 · CIK: 0001301843 · Accession: 0001096350-04-000220
AI Filing Summary & Sentiment
File numbers found in text: 333-119146
Letter
RE: Quantum Ventures, Inc.
Quantum Ventures, Inc
Quantum Ventures, Inc.
8526 Shepherd Way
Delta BC, Canada
Securities and Exchange Commission December 15, 2004
Washington DC
Attention: Adam Halper
Registration Statement on Form SB-2 File No. 333-119146
Ladies and Gentlemen,
We are writing in response to your comment latter Dated October 20, 2004
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.
We have noted this comment, and revised these sections
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 ofRule 419. In this regard, it appears that Quantum Ventures, Inc. wit), be unable to conduct its planned operations if additional funding is not raised within a short period of tinge, 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], iu 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 staffs 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.
We have noted this comment, and have revised and increased our disclosure to indicate that the company is not a blank check company and also confirm that the company has no current or future plans at this time to engage in any merger or acquisition with another company or entity.
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
Larry Cherrett is the sole officer and Director of 3493734 Manitoba Ltd.
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.
We have noted this comment and have talked to our independent council and there is currently no need for any blue sky registration and have deleted this referrence.
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
We have noted this comment, and have revised accordingly.
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.
We have noted this comment and hightlighted the cross reference to the risk factors with 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 TO 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.
We Have noted this comment and removed any reference to the Litigation Reform Act
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.
We have noted this comment and removed all references and text deemed 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.
We have noted this comment and have revised and expanded the Summary section
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.
We have noted this comment and have revised this section to indicate that we have had no reveues to date extremely limited operations and we have relied upon the sale of 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.
We have noted this comment , to date we have not made any equipment purchases
Upon making equipment purchases,these would include Computers and servers to do our own web hosting, to enhance the security of our sites.
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 supplementaily advise whether or not you are in default of the agreement.
We have noted this comment and confirm that the company is not in default of the agreement. Aditionally, the company paid its consideration on August 19, 2004, this late closing was discussed between all parties upon signing the agreement. The reason for the subsequent closing was that the company was just commencing its fund raising activities.
Risk Factors,,page 4
13, Clarify in the first paragraph of this section that you discuss all "material" risks.
We have noted this comment and clarified this section to 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 maybe 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.
We have noted this comment and have revised the risk factors accordingly.
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.
We have noted this comment and have revised the risk factors accordingly.
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.
We have noted this comment and rectified this disclosure to indicate the company’s proper business address
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
we have noted this comment and have provided the information in accordance with 1tem 505
of Regulation SB
18. anticipates quoting your stock. Make sure to disclose in your risk factors the possibility that no one may make a :market for your stock.
We have noted the comment and have revised the disclosure to indicate the possibilty that no one may make a market for the company’s shares.
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.
We have noted this comment and deleted this reference from the text of the document.
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.
We have noted this comment and have revised our disclosure to include that if the company files a Post-Affective Amendment and engages a broker-dealer then we would file all materials with the NASD Department of Corporate Finance.
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.
We have noted this comment, and have revised this section to indicate that there are no employment contracts at this time.
22. Quantum was incorporated on April 14,2004; however, Mr. Nittritz is listed as Secretary/Treasurer since April 14, 2003. Please reconcile.
We have noted this comment and have reconcilled this typographical error.
24. Please confirm that other than Mr. Ross, no person could be deemed a promoter. See Item 404(d) of Regulation S-B.
We have noted this comment, and after reviewing Item 404(d) we confirm that Mr Ross is the only person that could be deemed a promoter
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.
We have noted this comment and have revised Mr. Ross’ biographical information accordingly
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
We have noted this comment and revised accordingly.
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 SB for each subsidiary.
We have noted this comment and have revised this disclosure to be in accordance of Item 101(a )of Regulation SB
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.
We have noted this comment and confirm that here are no related party transactions between
Quantum Ventures. Inc. and 3493743 Manitoba Ltd.
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.
Larry Cherrett is the sole officer and Director of 3493734 Manitoba Ltd, the owner of the technology. He is also their corporate council and was the council for the company that developed the product.
30. Who was responsible for the development of the Mediflow Software before it was purchased by Quantum?
We have noted this comment and the company that did the original development was
World Star Holdings Ltd. a Manitoba Corporation head quartered in Dryden Ontario Canada
31. Disclose in greater detail the operational capability of Mediflow including more
detail on its current capacity to t
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CORRESP
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filename1.htm
Quantum Ventures, Inc
Quantum Ventures, Inc.
8526 Shepherd Way
Delta BC, Canada
Securities and Exchange Commission December 15, 2004
Washington DC
Attention: Adam Halper
RE: Quantum Ventures, Inc.
Registration Statement on Form SB-2 File No. 333-119146
Ladies and Gentlemen,
We are writing in response to your comment latter Dated October 20, 2004
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.
We have noted this comment, and revised these sections
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 ofRule 419. In this regard, it appears that Quantum Ventures, Inc. wit), be unable to conduct its planned operations if additional funding is not raised within a short period of tinge, 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], iu 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 staffs 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.
We have noted this comment, and have revised and increased our disclosure to indicate that the company is not a blank check company and also confirm that the company has no current or future plans at this time to engage in any merger or acquisition with another company or entity.
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
Larry Cherrett is the sole officer and Director of 3493734 Manitoba Ltd.
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.
We have noted this comment and have talked to our independent council and there is currently no need for any blue sky registration and have deleted this referrence.
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
We have noted this comment, and have revised accordingly.
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.
We have noted this comment and hightlighted the cross reference to the risk factors with 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 TO 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.
We Have noted this comment and removed any reference to the Litigation Reform Act
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.
We have noted this comment and removed all references and text deemed 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.
We have noted this comment and have revised and expanded the Summary section
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.
We have noted this comment and have revised this section to indicate that we have had no reveues to date extremely limited operations and we have relied upon the sale of 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.
We have noted this comment , to date we have not made any equipment purchases
Upon making equipment purchases,these would include Computers and servers to do our own web hosting, to enhance the security of our sites.
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 supplementaily advise whether or not you are in default of the agreement.
We have noted this comment and confirm that the company is not in default of the agreement. Aditionally, the company paid its consideration on August 19, 2004, this late closing was discussed between all parties upon signing the agreement. The reason for the subsequent closing was that the company was just commencing its fund raising activities.
Risk Factors,,page 4
13, Clarify in the first paragraph of this section that you discuss all "material" risks.
We have noted this comment and clarified this section to 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 maybe 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.
We have noted this comment and have revised the risk factors accordingly.
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.
We have noted this comment and have revised the risk factors accordingly.
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.
We have noted this comment and rectified this disclosure to indicate the company’s proper business address
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
we have noted this comment and have provided the information in accordance with 1tem 505
of Regulation SB
18. anticipates quoting your stock. Make sure to disclose in your risk factors the possibility that no one may make a :market for your stock.
We have noted the comment and have revised the disclosure to indicate the possibilty that no one may make a market for the company’s shares.
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.
We have noted this comment and deleted this reference from the text of the document.
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.
We have noted this comment and have revised our disclosure to include that if the company files a Post-Affective Amendment and engages a broker-dealer then we would file all materials with the NASD Department of Corporate Finance.
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.
We have noted this comment, and have revised this section to indicate that there are no employment contracts at this time.
22. Quantum was incorporated on April 14,2004; however, Mr. Nittritz is listed as Secretary/Treasurer since April 14, 2003. Please reconcile.
We have noted this comment and have reconcilled this typographical error.
24. Please confirm that other than Mr. Ross, no person could be deemed a promoter. See Item 404(d) of Regulation S-B.
We have noted this comment, and after reviewing Item 404(d) we confirm that Mr Ross is the only person that could be deemed a promoter
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.
We have noted this comment and have revised Mr. Ross’ biographical information accordingly
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
We have noted this comment and revised accordingly.
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 SB for each subsidiary.
We have noted this comment and have revised this disclosure to be in accordance of Item 101(a )of Regulation SB
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.
We have noted this comment and confirm that here are no related party transactions between
Quantum Ventures. Inc. and 3493743 Manitoba Ltd.
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.
Larry Cherrett is the sole officer and Director of 3493734 Manitoba Ltd, the owner of the technology. He is also their corporate council and was the council for the company that developed the product.
30. Who was responsible for the development of the Mediflow Software before it was purchased by Quantum?
We have noted this comment and the company that did the original development was
World Star Holdings Ltd. a Manitoba Corporation head quartered in Dryden Ontario Canada
31. Disclose in greater detail the operational capability of Mediflow including more
detail on its current capacity to t