SEC Comment Letter for Eagle Bulk Shipping Inc. (CIK 0001322439) — Jun 15, 2005
Eagle Bulk Shipping Inc. (CIK 0001322439)
Date: June 15, 2005 · CIK: 0001322439 · Accession: 0000000000-05-030180
AI Filing Summary & Sentiment
File numbers found in text: 333-123817
Show Raw Text
<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
Mail Stop 3-5
June 15, 2005
Gary J. Wolfe, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
Re: Eagle Bulk Shipping Inc.
Registration Statement on Form S-1
Amendment No. 3
Filed June 6, 2005
File No. 333-123817
Dear Mr. Wolfe:
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.
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 and 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.
Management`s Discussion and Analysis of Financial Conditions and
Results of Operations
Non-Cash Compensation Charges, page 33
1. Please explain in further detail how you calculated or
determined
the non-cash compensation charge of $12 million that will be
recognized in connection with the consummation of the offering for
certain profit interests in Eagle Ventures granted to the
Company`s
management. See also our related comment below regarding your
accounting for compensation expense associated with these
interests
as disclosed in Note 6.
Lack of Historical Operating Data for Vessel Before their
Acquisition, page 34
2. We note your response to our prior comment 5. You state that
generally, contract renewal rates are not negotiated as part of
the
initial charter contract and consequently, they are not taken into
account in the valuation of related liabilities or assets. Based
on
your response it appear that you may have acquired time charters
in
connection with the acquisition of your vessels, which have
contract
renewal rates that were negotiated as part of the initial charter
contract. If such renewal rates are negotiated as part of the
initial
charter contract, it is not apparent from your explanation why
such
future contract renewals should not be taken into account in the
valuation of the liabilities or assets resulting from the out of
money or in the money charters. Please tell us whether your
contract
renewal rates are negotiated as part of the initial charter
contract
and if so, why they are not considered as part of your valuation
of
the related liabilities or assets. Finally, revise your
disclosure
in note 2 (o) and on page 41 of MD&A to indicate that renewal
periods
for charters are not considered as part of your valuation of the
assets or liabilities related to in the money or out of the money
charters and indicate why renewal periods are properly excluded.
Your
current disclosure in note 2 (o) and MD&A conflicts with your
response, as you state that "the Company also considers other
facts,
such as any renewal options for charter contracts acquired to
identify all intangible assets associated with the acquisition of
a
vessel."
Financial Statements
Report of Independent Registered Public Accounting Firm, page F-2
3. Revise to remove the restrictive legend that follows the report
of
the independent registered accounting firm prior to the planned
effectiveness of the Company`s Form S-1 registration statement.
Consolidated Balance Sheet, page F-3
4. Revise the pro forma balance sheet presentation to eliminate
the
effect on the Company`s common shares and additional paid-in
capital
of the common shares whose issuance will be required to fund the
payments to Kelso & Company, L.P. and certain non-management
affiliates of Eagle Ventures LLC. The pro forma balance sheet
presentation should reflect only the effect of the payments to be
made to these parties and not the related offering proceeds that
will
be required to fund these payments. Note however that the effect
of
these share issuances should be reflected in the pro forma
earnings
per share computations in accordance with the guidance outlined in
SAB Topic 1:B:3.
Note. 6.c Related Party Transactions, page F-11
5. We note the disclosures that have been added to Note 6 in
response
to our prior comment number 13 but are still unclear as to how the
Company plans to calculate or determine compensation expense
associated with profit interests held by certain members of
management. Please tell us and clarify in Note 6 the number and
other
relevant terms of the profit interests held by members of the
Company`s management (including how many awards are provided for
service-based vesting versus performance-based vesting) and
explain
how these factors will be used or considered in relation to the
fair
value of shares of common stock held by Eagle Ventures LLC in
determining compensation expense to be recognized. Also, revise
the
notes to the financial statements to disclose the specific terms
or
performance related conditions associated with the portion of the
profit interests granted. The disclosure should include but not be
limited to Kelso`s original indirect investment in the Company,
the
different achievement multiples and the vesting percentage
associated
to each achievement multiple.
Exhibit 5
6. Please file a legality opinion a dated as of the date of
effectiveness or revise paragraph 6 accordingly.
******
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Direct any questions on the financial statements and related
disclosure Jeff Jaramillo at (202) 533-3212, or Linda Cvrkel, at
(202) 533-3813. Direct any other questions to Hanna Teshome at
(202)
533-3315, or in her absence to me at (202) 533-3750.
Sincerely,
Max A. Webb
Assistant Director
cc:
via facsimile
Gary J. Wolfe, Esq.
Robert E. Lustrin, Esq.
Seward & Kessel LLP
(212) 480-8421
??
??
??
??
Eagle Bulk Shipping Inc.
June 15, 2005
Page 1
</TEXT>
</DOCUMENT>