SEC Comment Letter for DITTYBASE TECHNOLOGIES INC. (CIK 0001311170) — Aug 30, 2005
DITTYBASE TECHNOLOGIES INC. (CIK 0001311170)
Date: Aug. 30, 2005 · CIK: 0001311170 · Accession: 0000000000-05-044973
AI Filing Summary & Sentiment
Letter
Mail Stop 4561 Via U.S. Mail Tim Daniels President, Chief Financial Officer and Director Dittybase Technologies, Inc. Suite 102, 31 Bastion Square Victoria, BC Canada V8W1J1
Re: Dittybase Technologies, Inc. Form 20-F Amendment No. 3 Filed August 11, 2005 File No. 0-51082
Dear Mr. Daniels:
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 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 any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
All page numbers refer to the marked copy of amendment number that you provided to us on August 11, 2005. 1. We note your response to previous comment 2 and reissue the comment in part. The risk factor in its original form stated that officers and directors were free to devote time to other companies that may compete with Ditttybase and that a conflict may arise due to conflicting fiduciary duties owed by the officers and directors to each competing company. Please revise to include the risk factor as originally stated, or tell us why you believe the disclosure is not material to investors.
Risk Factors
The Company has not determined whether it meets the definition of passive foreign investment company...page 10 2. In your response to previous comment 5, please expand the added risk factor (r) to define under what circumstances you may be classified as a passive foreign investment company.
Piracy of music and illegal downloads, page 12 3. We note your response to previous comment 10 as it relates to the risk of illegal downloading of music on your company. Please delete the mitigating language added and describe more specifically how the practice of illegal downloads may materially impact your business specifically. We note that people who download music from other sources may be less inclined to use and purchase your service.
Business Overview
During the year ended December 2004 4. We note from your response to previous comment 9 that the arrangement with the dBc musicians accounts for 45% of your revenue. Please file the exhibits with musicians as exhibits pursuant to Item 601 of Regulation S-B. Please note that you may request confidential treatment for specific information contained in the agreements pursuant to Rule 24b-2 of the Securities Exchange Act. Refer to Staff Legal Bulletin 1 available on our website at http://www.sec.gov/interps/legal.shtml.
Industry Overview, page 16 5. In your response to previous comment 10, it remains unclear how you calculated the U.S. $5.5 million value figure for the music publishing industry by the year 2008. Please advise. Please also balance your disclosure by disclosing that according to the survey, global music publishing revenues decreased by 4% in 2001 and tell us how the decrease impacts your predictions for 2008. We note also in the preface of the NMPA report the statement that worldwide declines suffered by the recording industry over the past few years have had a significant impact on publishing revenues. Also, you have not addressed our comment relating to how the participants to the survey are chosen. Please advise.
Fiscal year ended December 31, 2001 compared to the fiscal year ended December 31, 2000, page 24 6. We note your response to previous comment 12. It appears that the inability to obtain financing was the most significant factor, rather than the events of September 11, 2001. Please revise.
Trend Information, page 28 7. Disclose the basis for your 50% quarterly increase for the next months. For example, disclose whether these figures are based on pending contracts, agreements with clients, or some other specific calculation of recent sales numbers. Disclose also that the recent increase in sales are the result of the release of your client application online combined with the marketing efforts as mentioned in your response.
Major Shareholders and Related Party Transactions-page 33 8. We note the added disclosure for the June and July issuances of common stock and warrants. Please tell us the exemption relied upon in issuing these shares and the facts supporting your conclusion.
Consolidated Statements of Operations
9. Please revise your statements of operations to present operating revenues and expenses as part of operating income. 10. In your next amendment, include the unaudited consolidated interim financial statements for the six months ended June 30, that were included in your Form 6-K, filed August 23, 2005. Refer to Item 8.A.5 of Form 20-F. Please note that we may have additional comments upon our review of those financial statements. Additionally, revise your Operating and Financial Review and Prospects to cover the six months ended June 30, 2005. Refer to Item 5 of Form 20-F.
* * *
As appropriate, please amend your filing and respond to these comments within 10 business days or tell us when you will provide us with a response. You may wish to provide us with marked copies of the amendment to expedite our review. Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested supplemental information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendment and responses to our comments.
You may contact Eric McPhee, Accountant, at 202-551-3693 or Steven Jacobs, Accounting Branch Chief, at 202-551-3403 if you have questions regarding comments on the financial statements and related matters. Please contact Charito A. Mittelman at 202-551-3402 or me at 202-551-3411 with any other questions.
Sincerely,
Peggy Kim
Senior Counsel
cc: Michael Seifert, Esq.
Show Raw Text
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<TEXT>
August 30, 2005
Mail Stop 4561
Via U.S. Mail
Tim Daniels
President, Chief Financial Officer and Director
Dittybase Technologies, Inc.
Suite 102, 31 Bastion Square
Victoria, BC
Canada V8W1J1
Re: Dittybase Technologies, Inc.
Form 20-F Amendment No. 3
Filed August 11, 2005
File No. 0-51082
Dear Mr. Daniels:
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 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
All page numbers refer to the marked copy of amendment number
3
that you provided to us on August 11, 2005.
1. We note your response to previous comment 2 and reissue the
comment in part. The risk factor in its original form stated that
officers and directors were free to devote time to other companies
that may compete with Ditttybase and that a conflict may arise due
to
conflicting fiduciary duties owed by the officers and directors to
each competing company. Please revise to include the risk factor
as
originally stated, or tell us why you believe the disclosure is
not
material to investors.
Risk Factors
The Company has not determined whether it meets the definition of
passive foreign investment company...page 10
2. In your response to previous comment 5, please expand the added
risk factor (r) to define under what circumstances you may be
classified as a passive foreign investment company.
Piracy of music and illegal downloads, page 12
3. We note your response to previous comment 10 as it relates to
the
risk of illegal downloading of music on your company. Please
delete
the mitigating language added and describe more specifically how
the
practice of illegal downloads may materially impact your business
specifically. We note that people who download music from other
sources may be less inclined to use and purchase your service.
Business Overview
During the year ended December 2004
4. We note from your response to previous comment 9 that the
arrangement with the dBc musicians accounts for 45% of your
revenue.
Please file the exhibits with musicians as exhibits pursuant to
Item
601 of Regulation S-B. Please note that you may request
confidential
treatment for specific information contained in the agreements
pursuant to Rule 24b-2 of the Securities Exchange Act. Refer to
Staff Legal Bulletin 1 available on our website at
http://www.sec.gov/interps/legal.shtml.
Industry Overview, page 16
5. In your response to previous comment 10, it remains unclear how
you calculated the U.S. $5.5 million value figure for the music
publishing industry by the year 2008. Please advise. Please also
balance your disclosure by disclosing that according to the
survey,
global music publishing revenues decreased by 4% in 2001 and tell
us
how the decrease impacts your predictions for 2008. We note also
in
the preface of the NMPA report the statement that worldwide
declines
suffered by the recording industry over the past few years have
had a
significant impact on publishing revenues. Also, you have not
addressed our comment relating to how the participants to the
survey
are chosen. Please advise.
Fiscal year ended December 31, 2001 compared to the fiscal year
ended
December 31, 2000, page 24
6. We note your response to previous comment 12. It appears that
the
inability to obtain financing was the most significant factor,
rather
than the events of September 11, 2001. Please revise.
Trend Information, page 28
7. Disclose the basis for your 50% quarterly increase for the next
12
months. For example, disclose whether these figures are based on
pending contracts, agreements with clients, or some other specific
calculation of recent sales numbers. Disclose also that the recent
increase in sales are the result of the release of your client
application online combined with the marketing efforts as
mentioned
in your response.
Major Shareholders and Related Party Transactions-page 33
8. We note the added disclosure for the June and July issuances of
common stock and warrants. Please tell us the exemption relied
upon
in issuing these shares and the facts supporting your conclusion.
Consolidated Statements of Operations
9. Please revise your statements of operations to present
operating
revenues and expenses as part of operating income.
10. In your next amendment, include the unaudited consolidated
interim financial statements for the six months ended June 30,
2005
that were included in your Form 6-K, filed August 23, 2005. Refer
to
Item 8.A.5 of Form 20-F. Please note that we may have additional
comments upon our review of those financial statements.
Additionally, revise your Operating and Financial Review and
Prospects to cover the six months ended June 30, 2005. Refer to
Item
5 of Form 20-F.
* * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
You may contact Eric McPhee, Accountant, at 202-551-3693 or
Steven Jacobs, Accounting Branch Chief, at 202-551-3403 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact Charito A. Mittelman at 202-551-3402 or
me
at 202-551-3411 with any other questions.
Sincerely,
Peggy Kim
Senior Counsel
cc: Michael Seifert, Esq.
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Tim Daniels
Dittybase Technologies, Inc.
August 30, 2005
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