SEC Company Response from ELECTRIC MOTO CORP (CIK 0001322437) — Nov 7, 2005
ELECTRIC MOTO CORP (CIK 0001322437)
Date: Nov. 7, 2005 · CIK: 0001322437 · Accession: 0001013762-05-001507
AI Filing Summary & Sentiment
File numbers found in text: 333-124012
Referenced dates: August 5, 2005, May 13, 2005
Letter
Division of Corporate Finance Registration Statement on Form SB-2 File No. 333-124012 Amendment filed: July 6, 2005
Re: Electric Moto Corporation
Dear Mr. Ingram:
We represent Electric Moto Corp. (“Electric Moto” or the “Company”). We are in receipt of your letter dated August 5, 2005 regarding the above referenced filing and the following are our responses:
General
1.
Please note that the file number for your registration statement is 333-124012. The number noted in our comment letter dated May 13, 2005 was incorrect.
ANSWER: The Company has noted that file number for its registration statement is 333-124012.
2.
We reissue our prior comment 2. Please provide the disclosure required by Item 510 of Regulation S-B in the prospectus.
ANSWER: The Form SB-2 has been amended to provide the disclosure required by Item 510 of Regulation S-B.
Prospectus Cover Page
3.
To what other “recognized exchange” are you referring when you disclose that the selling shareholders will sell at a price of $.03 per share until the “shares are quoted on the OTC Bulletin Board (or any other recognized exchange).” We may have further comment.
ANSWER: The Form SB-2 has been amended to remove the phrase “any other recognized exchange” as the Company will apply for quotation only on the OTC
Bulletin Board.
4.
Limit your disclosure to only that information required by Item 501 of Regulation S-B. We specifically refer you to disclosure referencing the proceeds of the sale of shares by selling shareholders and the intent to apply for quotation on the OTC Bulletin Board. Please also note that the prospectus cover page should be limited to one page. See Item 501(a) of Regulation S-B.
ANSWER: The Form SB-2 has been amended to remove references to the proceeds of sales and intent to apply for quotation on the OTC Bulletin Board. The format of
the prospectus cover page has been amended to fit on one page.
About Us, page 1
5.
We reissue our prior comment 8. Please disclose the purpose of the Dorado Capital Ventures, Inc./Electric Moto combination. The disclosure does not appear in the summary or the business section as requested in our previous comment.
ANSWER: This section of the Form SB-2 has been amended to include disclosure of the purpose of the combination between Dorado Capital Ventures, Inc. and
Electric Moto. Such purpose was to facilitate the going-public process of Electric Moto.
Risk Factors, Page 2
6.
We note your revisions in response to our prior comment 12 and that you have not provided a complete list of risk factors but have, instead, provided all “material” risks. We do not understand your disclosure.
ANSWER: This section has been revised to clarify that all material risk factors are contained therein.
7.
We reissue our prior comment 13. Add risk factors that fully cover the risks associated with your company, the industry in which your company operates, your management, the terms of the offering, your past performance, etc. For example, you should add a risk factor addressing the company’s need for additional capital. Each risk factor should also clearly disclose the consequences to the company or to the investors, should the risk materialize. Risk factors that are generic in nature and equally applicable to similarly situated businesses should be moved to an appropriate place later in the prospectus. Your ‘Penny stock’ risk factor appears to be generic in nature. Please revise your risk factor section, as appropriate, to address all material risks.
ANSWER: This section has been amended to include risk factors that address the above.
8.
Please update your third risk factor to the date of your latest interim financial statements. Also revise to indicate your amount of working capital as of that date.
ANSWER: The third risk factor has been amended to reflect the amount of working capital of $7,286.00 as of June 30, 2005, the date of the Company’s latest interim
financial statement.
9.
In the sixth risk factor, please remove the term “accurate.”
ANSWER: This section has been revised to remove the term “accurate” from the sixth risk factor.
Management’s Discussion and Analysis, page 7
10.
We note the company’s response to our prior comment 19 and we reissue the question. Explain why you seek to register a selling shareholder offering rather than a primary offering wherein you may be able to raise capital to support your operations.
ANSWER: The Company is seeking to register a selling shareholder offering rather than a primary offering because it needs to register such shares to inorde to have a free-trading shareholder base. At this time, a primary offering would be too costly for the Company to undertake.
11.
We reissue our prior comment 22 noting that you have not made any revisions in response to our prior comment. Given your limited operating history and generation or revenues, the company is required to provide a detailed plan of operation for the next 12 months. Substantially revise this section to discuss with greater specificity the steps you intend to take in furtherance of your plan of operation. Please provide a potential investor with comprehensive disclosure of the direction in which you plan to take your company in the next twelve months of operation. Given that there is so little context to your discussion of your operations, we ask that you revise your disclosure so that a potential investor may clearly understand the concept of your business and how you intend to sustain meaningful operations. You should provide as much background as necessary while ensuring that your disclosure is not repetitive of information appearing elsewhere in the prospectus. You should focus your discussion in monthly or quarterly increments and discuss the steps necessary for, the costs associated with, and projected timeframes for achieving sustained first revenues. We may have additional comment after reviewing your revised disclosure.
ANSWER: This section has been revised to include discussion of the Company’s plan of operations for the next twelve months.
12.
We note you refer to Electric Moto Corporation as the “Company” in your prospectus. The term “Company” is a vague and abstract term. Use your actual company name, a shortened version of it, or the pronoun “we” or “us” throughout your document to refer to your company.
ANSWER: The Form SB-2 has been amended to replace references to the “Company” with pronouns.
13.
We note your statement that you have developed “two working prototypes of a hybrid drive system…these future additions to our product line have not, to date, impacted our development budget or business operations.” Clarify why the development of these drive systems did not impact your budget.
ANSWER: This section has been revised to disclose the reasons why the development of these drive systems did not impact our budget .
Critical Accounting Policy, page 8
14.
We read your response to comment 20; however, we do not see where you have sufficiently disclosed your policy for sales returns. Your disclosure here merely states that you do not assess returns of products or levels of inventory. Your disclosure in Note 1 Summary of Significant Accounting Policies under Revenue Recognition however, states that revenue is presented net of returns. Therefore, we are reissuing comment 20, in part. Please disclose your policy for product returns and allowances and revise your critical accounting policies and estimates (page 8) to identify the methodology and significant estimates used by management in the revenue recognition process. Your critical accounting policy should explain how you assess returns of your products, and your assessment of levels of inventory in the distribution channel.
ANSWER: This section has been amended to disclose the Company’s policy for sales returns.
Business Strategy, page 8
15.
Add disclosure clarifying the fact that you have no distribution system presently assembled.
ANSWER: This section has been amended to include disclosure that no distribution system is presently assembled and that the development of such will be critical to
our viability as a business and accordingly a necessary component of our strategy in the near future.
Liquidity and Capital Resources, page 9
16.
We read our response to comment 30; however we do not see where you have sufficiently disclosed and quantified the material activities that generate income statement variances between periods. Therefore we are reissuing comment 30. Please revise your revenue and expense discussion to describe and quantify underlying material activities that generate income statement variances between periods (e.g., discuss unit sales (and cost of sales) in 2004 versus 2003), including expected future trends. Please ensure to quantify separately the effect of each causal factor that you cite for material changes in your financial statement amounts (e.g., discuss the components of SG&A and explain the material changes and related causal factors). Please ensure to include a separate discussion comparing your interim periods presented in the financial statements (i.e., March 31, 2005 compared to March 31, 2004).
ANSWER: This section has been revised to disclose and quantify the material activities that generate income statement variances between periods.
Liquidity and Capital Resources, page 9
17.
Expand the disclosure relating to material cash flows from operating, investing and financing activities using information from the statement of cash flows for all periods.
ANSWER: This section has been expanded to include disclosure relating to material cash flows from operating, investing, and financing activities for the six-month
period ending June 30, 2005.
18.
We reissue our prior comment 33. Clarify whether the company has any internal or external sources of liquidity.
ANSWER: This section has been revised to disclose that the Company has no internal sources of liquidity and that product sales are the sole external source of
liquidity.
Business - Our Company, page 10
19.
We reissue our prior comment 45. While refraining from using overly technical language, expand the disclosure relating to the Blade, as this bike appears to be the only product currently available.
ANSWER: This section has been revised to include additional disclosure about the Blade.
Dependence on Customers, page 11
20.
We note your statement that “we have sold 2 pallets of 4 cycles each in Europe through one customer, with whom we may engage in a distribution agreement in the future, but the agreement is not material as of the date of this filing.” Please clarify whether you have a distribution agreement with the customer. Advise us why the agreement is not material and provide us with a copy of the agreement.
ANSWER: The Form S
Show Raw Text
CORRESP
1
filename1.htm
Electric Moto Correspond
Mr.
Jay
Ingram
Division
of Corporate Finance
U.S.
Securities & Exchange Commission
100
F
Street, N.E.
Mail
Stop
4561
Washington,
D.C. 20549
Re: Electric
Moto Corporation
Registration
Statement on Form
SB-2
File
No. 333-124012
Amendment filed: July 6, 2005
Dear
Mr.
Ingram:
We
represent Electric Moto Corp. (“Electric Moto” or the “Company”). We are in
receipt of your letter dated August 5, 2005 regarding the above referenced
filing and the following are our responses:
General
1.
Please
note that the file number for your registration statement is 333-124012.
The number noted in our comment letter dated May 13, 2005 was
incorrect.
ANSWER: The
Company has noted that file number for its registration statement is
333-124012.
2.
We
reissue our prior comment 2. Please provide the disclosure required
by
Item 510 of Regulation S-B in the
prospectus.
ANSWER: The
Form
SB-2 has been amended to provide the disclosure required by Item 510 of
Regulation S-B.
Prospectus
Cover Page
3.
To
what other “recognized exchange” are you referring when you disclose that
the selling shareholders will sell at a price of $.03 per share
until the
“shares are quoted on the OTC Bulletin Board (or any other recognized
exchange).” We may have further comment.
ANSWER: The
Form
SB-2 has been amended to remove the phrase “any other recognized exchange” as
the Company will apply for quotation only on the OTC
Bulletin Board.
4.
Limit
your disclosure to only that information required by Item 501 of
Regulation S-B. We specifically refer you to disclosure referencing
the
proceeds of the sale of shares by selling shareholders and the
intent to
apply for quotation on the OTC Bulletin Board. Please also note
that the
prospectus cover page should be limited to one page. See Item 501(a)
of
Regulation S-B.
ANSWER: The
Form
SB-2 has been amended to remove references to the proceeds of sales and intent
to apply for quotation on the OTC Bulletin Board. The format of
the prospectus
cover page has been amended to fit on one page.
About
Us, page 1
5.
We
reissue our prior comment 8. Please disclose the purpose of the
Dorado
Capital Ventures, Inc./Electric Moto combination. The disclosure
does not
appear in the summary or the business section as requested in our
previous
comment.
ANSWER: This
section of the Form SB-2 has been amended to include disclosure of the purpose
of the combination between Dorado Capital Ventures, Inc. and
Electric
Moto. Such purpose was
to facilitate the going-public process of Electric Moto.
Risk
Factors, Page 2
6.
We
note your revisions in response to our prior comment 12 and that
you have
not provided a complete list of risk factors but have, instead,
provided
all “material” risks. We do not understand your
disclosure.
ANSWER: This
section has been revised to clarify that all material risk factors are contained
therein.
7.
We
reissue our prior comment 13. Add risk factors that fully cover
the risks
associated with your company, the industry in which your company
operates,
your management, the terms of the offering, your past performance,
etc.
For example, you should add a risk factor addressing the company’s need
for additional capital. Each risk factor should also clearly disclose
the
consequences to the company or to the investors, should the risk
materialize. Risk factors that are generic in nature and equally
applicable to similarly situated businesses should be moved to
an
appropriate place later in the prospectus. Your ‘Penny stock’ risk factor
appears to be generic in nature. Please revise your risk factor
section,
as appropriate, to address all material
risks.
ANSWER: This
section has been amended to include risk factors that address the
above.
8.
Please
update your third risk factor to the date of your latest interim
financial
statements. Also revise to indicate your amount of working capital
as of
that date.
ANSWER: The
third
risk factor has been amended to reflect the amount of working capital of
$7,286.00 as of June 30, 2005, the date of the Company’s latest interim
financial
statement.
9.
In
the sixth risk factor, please remove the term
“accurate.”
ANSWER: This
section
has been revised to remove the term “accurate” from the sixth risk
factor.
Management’s
Discussion and Analysis, page 7
10.
We
note the company’s response to our prior comment 19 and we reissue the
question. Explain why you seek to register a selling shareholder
offering
rather than a primary offering wherein you may be able to raise
capital to
support your operations.
ANSWER:
The
Company is seeking to register a selling shareholder offering rather
than a
primary offering because it needs to register such shares to inorde
to have a free-trading shareholder base. At this time,
a primary
offering would be too costly for the Company to undertake.
11.
We
reissue our prior comment 22 noting that you have not made any
revisions
in response to our prior comment. Given your limited operating
history and
generation or revenues, the company is required to provide a detailed
plan
of operation for the next 12 months. Substantially revise this
section to
discuss with greater specificity the steps you intend to take in
furtherance of your plan of operation. Please provide a potential
investor
with comprehensive disclosure of the direction in which you plan
to take
your company in the next twelve months of operation. Given that
there is
so little context to your discussion of your operations, we ask
that you
revise your disclosure so that a potential investor may clearly
understand
the concept of your business and how you intend to sustain meaningful
operations. You should provide as much background as necessary
while
ensuring that your disclosure is not repetitive of information
appearing
elsewhere in the prospectus. You should focus your discussion in
monthly
or quarterly increments and discuss the steps necessary for, the
costs
associated with, and projected timeframes for achieving sustained
first
revenues. We may have additional comment after reviewing your revised
disclosure.
ANSWER: This
section has been revised to include discussion of the Company’s plan of
operations for the next twelve months.
12.
We
note you refer to Electric Moto Corporation as the “Company” in your
prospectus. The term “Company” is a vague and abstract term. Use your
actual company name, a shortened version of it, or the pronoun
“we” or
“us” throughout your document to refer to your
company.
ANSWER: The
Form
SB-2 has been amended to replace references to the “Company” with pronouns.
13.
We
note your statement that you have developed “two working prototypes of a
hybrid drive system…these future additions to our product line have not,
to date, impacted our development budget or business operations.” Clarify
why the development of these drive systems did not impact your
budget.
ANSWER: This
section has been revised to disclose the reasons why the development of these
drive systems did not impact our budget .
Critical
Accounting Policy, page 8
14.
We
read your response to comment 20; however, we do not see where
you have
sufficiently disclosed your policy for sales returns. Your disclosure
here
merely states that you do not assess returns of products or levels
of
inventory. Your disclosure in Note 1 Summary of Significant Accounting
Policies under Revenue Recognition however, states that revenue
is
presented net of returns. Therefore, we are reissuing comment 20,
in part.
Please disclose your policy for product returns and allowances
and revise
your critical accounting policies and estimates (page 8) to identify
the
methodology and significant estimates used by management in the
revenue
recognition process. Your critical accounting policy should explain
how
you assess returns of your products, and your assessment of levels
of
inventory in the distribution channel.
ANSWER: This
section has been amended to disclose the Company’s policy for sales returns.
Business
Strategy, page 8
15.
Add
disclosure clarifying the fact that you have no distribution system
presently assembled.
ANSWER: This
section has been amended to include disclosure that no distribution system
is
presently assembled and that the development of such will be critical to
our
viability
as a business and accordingly a necessary component of our strategy in the
near
future.
Liquidity
and Capital Resources, page 9
16.
We
read our response to comment 30; however we do not see where you
have
sufficiently disclosed and quantified the material activities that
generate income statement variances between periods. Therefore
we are
reissuing comment 30. Please revise your revenue and expense discussion
to
describe and quantify underlying material activities that generate
income
statement variances between periods (e.g., discuss unit sales (and
cost of
sales) in 2004 versus 2003), including expected future trends.
Please
ensure to quantify separately the effect of each causal factor
that you
cite for material changes in your financial statement amounts (e.g.,
discuss the components of SG&A and explain the material changes and
related causal factors). Please ensure to include a separate discussion
comparing your interim periods presented in the financial statements
(i.e., March 31, 2005 compared to March 31,
2004).
ANSWER: This
section has been revised to disclose and quantify the material activities
that
generate income statement variances between periods.
Liquidity
and Capital Resources, page 9
17.
Expand
the disclosure relating to material cash flows from operating,
investing
and financing activities using information from the statement of
cash
flows for all periods.
ANSWER: This
section
has been expanded to include disclosure relating to material cash flows from
operating, investing, and financing activities for the six-month
period
ending June
30, 2005.
18.
We
reissue our prior comment 33. Clarify whether the company has any
internal
or external sources of liquidity.
ANSWER:
This
section has been revised to disclose that the Company has no internal sources
of
liquidity and that product sales are the sole external source of
liquidity.
Business
- Our Company, page 10
19.
We
reissue our prior comment 45. While refraining from using overly
technical
language, expand the disclosure relating to the Blade, as this
bike
appears to be the only product currently
available.
ANSWER: This
section has been revised to include additional disclosure about the
Blade.
Dependence
on Customers, page 11
20.
We
note your statement that “we have sold 2 pallets of 4 cycles each in
Europe through one customer, with whom we may engage in a distribution
agreement in the future, but the agreement is not material as of
the date
of this filing.” Please clarify whether you have a distribution agreement
with the customer. Advise us why the agreement is not material
and provide
us with a copy of the agreement.
ANSWER: The
Form
S