SEC Company Response from Amalgamated Pictures Corp. (CIK 0001326679) — Oct 28, 2005
Amalgamated Pictures Corp. (CIK 0001326679)
Date: Oct. 28, 2005 · CIK: 0001326679 · Accession: 0001326679-05-000005
AI Filing Summary & Sentiment
File numbers found in text: 333-125145
Letter
Securities and Exchange Commission Division of Corporate Finance Washington, DC 20549-0305 Re: Amalgamated Pictures Corp. Registration Statement on Form SB-2 Amendment No. 2, for filing October 27, 2005 File No. 333-125145
Dear Ms. Karu:
In response to the comment letter of June 22, 2005, we are filing an amendment to the above-captioned Amalgamated Pictures Corp. (the "Company") registration statement to conform to the comments and suggestions. We enclose a redlined copy of the registration statement indicating the changes together with a printed registration statement as filed on October 27, 2005.
The following are our responses to the comments, by number, as presented in the letter of June 22, 2005.
General
1. Your disclosure indicates that you are a development stage company established three months ago and that you have not commenced business operations nor realized any revenues from your planned operations. It therefore appears that your proposed business may be commensurate in scope with the uncertainty ordinarily associated with a blank check company. We also note that your sole officer, director, and controlling shareholder, Avery Pack, previously had the same role in another public company, Consolidated Pictures, that had substantially the same business plan as your own yet did not develop any operations. Consolidated Pictures subsequently recently engaged in a merger with a private company with operations, as typically is seen in blank check companies. Accordingly, please revise your disclosure throughout your registration statement to comply with Rule 419 of Regulation C or provide us with an explanation of why Rule 419 does not apply.
We have no plan to merge with or acquire another company in a reverse merger transaction, and we have every intention to pursue our business plan. In the case of Consolidated Pictures, the company was unable to raise sufficient funds to pursue its business plan. We, on the other hand, started with a capital investment of $25,000 by our sole-director, Avery Pack. In addition, Mr. Pack has agreed to provide additional funds, up to $75,000, in the form of a loan, to us if we are unable to raise sufficient funds for our minimum requirements, see Exhibit 10.1.
The following language has been added to the Business section:
"We are not a "blank check" company as that term is defined in Rule 419 of Regulation C of the Securities Act of 1933, as we have a specific business plan or purpose and we have no intention or plan to merge with or acquire another company to be used as a vehicle for a reverse acquisition in the foreseeable future."
Prospectus Cover Page
2. In the second sentence, please briefly disclose if accurate - as reflected in the second risk factor on page 7 - that the transferability of shares may be limited under state law because you do not intend to qualify the offering under state law until 30 days prior to completion of the offering, which may not occur for a year.
In the second paragraph on the cover page, we added the following statement:
"The transferability of our shares and warrants may be limited under state law because we do not intend to qualify this offering under state law until 30 days prior to completion of this offering, which may not occur for a year."
3. Since your offering will be self-underwritten and without any minimum required proceeds, please disclose at the end of the third paragraph that because there is no minimum amount of shares that must be sold, you may receive no proceeds or very little proceeds from the offering.
At the end of the third paragraph, we added the statement:
"Because there is no minimum amount of shares that must be sold, we may receive no proceeds or very little proceeds from this offering."
4. Please revise the sentence that precedes your price table to state that the offering is being made directly by you through your sole officer-director. As appropriate, please also delete throughout your prospectus other plural references to "officers and directors" so it is clear you have one sole officer-director.
We have revised the sentence preceding the price table to read:
"The offering is being made directly by us through our sole officer-director who will not receive any compensation for such sales."
Additionally, we have deleted or clarified where appropriate other plural references throughout the prospectus for officers and directors so it is clear that we have only one officer-director.
5. Please revise your cross-reference to the risk factors section to delete "some of." All material risks must be described not "some of them."
We have deleted the language "some of" in reference to our risk factors as we have described all material risks.
Inside Front Cover Page
6. Please include the dealer prospectus delivery obligation disclosure as required by Item 502(b) of Regulation S-B.
We have included the following disclosure in the inside front cover page:
"Dealer Prospectus Delivery Obligation
"Until __________, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions."
Prospectus Summary, page 3 Our Company, page 3
7. Please include in your summary that you have only one employee, Avery Pack, who is your sole officer, director and controlling shareholder.
We have included the following statement in Our Company on page 3:
"We have only one employee, Avery Pack, who is our sole officer, director and controlling shareholder."
The Offering, page 3
8. After "Common stock outstanding after the offering," please add a separate paragraph that discloses that your sole executive officer-director holds % of your shares, and as a result will exercise control over your direction.
In The Offering table on page 3, we included a section that discloses the percentage ownership of the common stock outstanding after the offering of our sole officer-director and indicates that he will exercise control of our direction.
9. In connection with terms of the offering, please indicate that the offering will terminate in no later than 12 months.
In connection with terms of the offering, we have indicated that the offering will terminate no later than 12 months after the effective date of this offering.
10. Please add a separate paragraph which indicates the absence of a public market for the common shares and warrants and briefly explains how the absence of a public market impacts liquidity.
We have added the following paragraph on page 3 to indicate the absence of a public market and how it impacts liquidity:
"There is no public market for our common shares and warrants and there can be no assurance that a public market for our common stock and warrants will ever develop. Without a public market, there will be no liquidity in your investment in our securities which means that you may be unable to resell your common shares and warrants, and if you are able to resell them, you may not be able to recover your investment."
Risk Factors, page 4
Because of state securities registration requirements, the transferability of ..., page 7
11. We note that you plan on submitting an application for listing in one of the "recognized securities manuals" within 30 days prior to the completion of this offering. Please clarify that you are uncertain as to when this offering will be completed and that it might be open for a longer period of time than anticipated.
In the risk factor, we added the following clarifying statement:
"We are uncertain as to when this offering will be completed and that it might be open for a longer period of time than anticipated, possibly up to 12 months after the effective date of this offering."
Determination of the Offering Price, page 12
12. You state that you "arbitrarily selected" the offering price of $5.10 per unit. It is therefore important that the disclosure be clear and concise about how you did select an offering price per share. Accordingly, please revise to disclose all factors you considered. For each factor you cite, briefly explain how these factors affected your determination of the offering price. See Item 505 of Regulation S-B.
We have added the following language disclosing the factors considered to determine the offering price:
"Among the factors considered were our lack of operating history; the proceeds to be raised by the offering; the amount of capital to be contributed by purchasers in this offering in proportion to the amount of stock to be retained by our existing shareholders; our belief in the future economic prospects of the Company; and our relative cash requirements."
Business, page 14
13. Please expand this section to provide detailed information concerning your operations. This would include the status of any discussions with creative personnel, selection of movie scripts, interviews with potential actors, consultants, etc. Please include specific information regarding all activities to clearly describe the company's status. If no progress has been made, so state. This description may also need to be addressed in the risk factors section. Please clearly specify what steps you have taken to date, what steps you need to take to advance your business and what is required to make those advancements. Also, expand your disclosure to address in more detail how you will fund your operations and how you will fund your capital requirements if proceeds from this offering fall short of expectations. We may have further comments based upon your revisions.
The following language has been added to the Business section to discuss our activities since inception:
"To date, no significant progress has been made to further our business plan; however, we have devoted considerable effort to develop parameters for digital film concepts and technologies that would be appropriate to consider when sufficient resources are available. Our digital film concepts must be translated into films that can be created within our strict budgetary requirements. These requirements limit the narrative possibilities of our films and require us to take advantage of opportunities, namely talent and locations that will not consume unnecessary funds from a film budget and will be available at the moment of production.
"In addition to developing the parameters for our potential films, our president has been developing professional relationships with filmmaking resources including actors and technicians, both amateur and professional; writers; musicians; film festival organizers; equipment rental companies; and production and equipment insurance companies."
In the Plan of Operation, we've added the following language to detail how we will fund our operations if this offering falls short of expectations:
"If we are unable to raise at least $75,000 in this offering, we expect to borrow funds from a bank or other financial institution to satisfy our minimum cash requirements to initiate operations and produce our first film property. If we are unable to borrow funds from a bank or other financial institution, our president and sole-director, Avery Pack, has agreed to lend us the funds, up to $75,000, for a minimum term of 12 months with an interest rate equivalent to the Citibank, N.A. prime rate."
Additionally, we have added the risk factor entitled, "Because we may be unsuccessful in raising at least $75,000 from this offering to produce our first motion picture and to satisfy our liquidity needs for the next 12 months, we may be unable to commence operations and pursue our business plan."
Plan of Operation, page 14
14. Since your offering is being completed on a best-efforts basis, please revise your disclosure to address how the company intends to satisfy its liquidity needs over the next twelve months under at least the three offering levels presented. See Item 303(a) of Regulation S-B. Under each scenario, please ensure that you discuss in more detail the line item expenditures listed in the application of proceeds table on page 10.
We have added the following language to the Plan of Operation section:
"If we raise 25% of the maximum offering, or $125,000, we will be able to create one film property and associated promotional website. After offering expenses, we will have available $101,250 for motion picture production; $5,625 to develop a promotional website; and $5,625 for working capital.
"If we raise 50% of the maximum offering, or $250,000, we will be able to create two film properties and associated promotional websites. After offering expenses, we will have available $211,500 for motion picture production; $11,750 to develop promotional websites; and $11,750 for working capital.
"If we raise 100% of the maximum offering, or $500,000, we will be able to create four film properties and associated promotional websites. After offering expenses, we will have available $436,500 for motion picture production; $24,250 to develop promotional websites; and $24,250 for working capital.
"If we are to able to raise at least 25% of the maximum offering, or $125,000, we will satisfy our liquidity needs over the next 12 months. If we raise more than 25% of the maximum offering, our liquidity for the next 12 months will likewise be satisfied; however, we will be able to produce additional film properties and related websites in the 12 month period. For example, if we raise 50% of the maximum offering, we will be able to produce two film properties in the 12 month period; or, if we raise 100% of the maximum offering, we will be able to produce four film properties in the 12 month period."
In addition, the following paragraph has been added to the Plan of Operation as well:
"If we are unable to raise at least $75,000 in this offering, we expect to borrow funds from a bank or other financial institution to satisfy our minimum cash requirements to initiate operations and produce our first film property. If we are unable to borrow funds from a bank or other financial institution, our president and sole-director, Avery Pack, has agreed to lend us the funds up to $75,000 for a minimum term of 12 months with an interest rate equivalent to the Citibank, N.A. prime rate.
Properties, page 15
15. The website address provided on the bottom of page 15 does not seem to be operational. Please tell us, with a view toward disclosure, the status of your website.
Our website is now operational. Currently, the website offers limited information related to our offering and a basic description of our business.
Industry Overviews, page 16
16. Please review this section to ensure that you identify the sources for the industry data that you provide. Currently, you include many factual statements, but you have not indicated whether the source of this information is based upon management's belief, industry data, scientific reports or any other source. Please revise accordingly. If the information is based upon reports, articles, or studies, please provide these documents to us appropriately marked and dated. If
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CORRESP
1
filename1.htm
amalgapix corresp 102705
David L. Kahn
Attorney at Law
3150 West Fir Avenue, #127
Fresno, CA 93711
Phone: (559) 440-9248, Fax: (559) 440-9348
October 27, 2005
Ms. Anita Karu, Attorney-Advisor
Securities and Exchange Commission
Division of Corporate Finance
Washington, DC 20549-0305
Re: Amalgamated Pictures Corp.
Registration Statement on Form SB-2
Amendment No. 2, for filing October 27, 2005
File No. 333-125145
Dear Ms. Karu:
In response to the comment letter of June 22, 2005, we are filing an amendment to the above-captioned Amalgamated Pictures Corp. (the "Company") registration statement to conform to the comments and suggestions. We enclose a redlined copy of the registration statement indicating the changes together with a printed registration statement as filed on October 27, 2005.
The following are our responses to the comments, by number, as presented in the letter of June 22, 2005.
General
1. Your disclosure indicates that you are a development stage company established three months ago and that you have not commenced business operations nor realized any revenues from your planned operations. It therefore appears that your proposed business may be commensurate in scope with the uncertainty ordinarily associated with a blank check company. We also note that your sole officer, director, and controlling shareholder, Avery Pack, previously had the same role in another public company, Consolidated Pictures, that had substantially the same business plan as your own yet did not develop any operations. Consolidated Pictures subsequently recently engaged in a merger with a private company with operations, as typically is seen in blank check companies. Accordingly, please revise your disclosure throughout your registration statement to comply with Rule 419 of Regulation C or provide us with an explanation of why Rule 419 does not apply.
We have no plan to merge with or acquire another company in a reverse merger transaction, and we have every intention to pursue our business plan. In the case of Consolidated Pictures, the company was unable to raise sufficient funds to pursue its business plan. We, on the other hand, started with a capital investment of $25,000 by our sole-director, Avery Pack. In addition, Mr. Pack has agreed to provide additional funds, up to $75,000, in the form of a loan, to us if we are unable to raise sufficient funds for our minimum requirements, see Exhibit 10.1.
The following language has been added to the Business section:
"We are not a "blank check" company as that term is defined in Rule 419 of Regulation C of the Securities Act of 1933, as we have a specific business plan or purpose and we have no intention or plan to merge with or acquire another company to be used as a vehicle for a reverse acquisition in the foreseeable future."
Prospectus Cover Page
2. In the second sentence, please briefly disclose if accurate - as reflected in the second risk factor on page 7 - that the transferability of shares may be limited under state law because you do not intend to qualify the offering under state law until 30 days prior to completion of the offering, which may not occur for a year.
In the second paragraph on the cover page, we added the following statement:
"The transferability of our shares and warrants may be limited under state law because we do not intend to qualify this offering under state law until 30 days prior to completion of this offering, which may not occur for a year."
3. Since your offering will be self-underwritten and without any minimum required proceeds, please disclose at the end of the third paragraph that because there is no minimum amount of shares that must be sold, you may receive no proceeds or very little proceeds from the offering.
At the end of the third paragraph, we added the statement:
"Because there is no minimum amount of shares that must be sold, we may receive no proceeds or very little proceeds from this offering."
4. Please revise the sentence that precedes your price table to state that the offering is being made directly by you through your sole officer-director. As appropriate, please also delete throughout your prospectus other plural references to "officers and directors" so it is clear you have one sole officer-director.
We have revised the sentence preceding the price table to read:
"The offering is being made directly by us through our sole officer-director who will not receive any compensation for such sales."
Additionally, we have deleted or clarified where appropriate other plural references throughout the prospectus for officers and directors so it is clear that we have only one officer-director.
5. Please revise your cross-reference to the risk factors section to delete "some of." All material risks must be described not "some of them."
We have deleted the language "some of" in reference to our risk factors as we have described all material risks.
Inside Front Cover Page
6. Please include the dealer prospectus delivery obligation disclosure as required by Item 502(b) of Regulation S-B.
We have included the following disclosure in the inside front cover page:
"Dealer Prospectus Delivery Obligation
"Until __________, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions."
Prospectus Summary, page 3 Our Company, page 3
7. Please include in your summary that you have only one employee, Avery Pack, who is your sole officer, director and controlling shareholder.
We have included the following statement in Our Company on page 3:
"We have only one employee, Avery Pack, who is our sole officer, director and controlling shareholder."
The Offering, page 3
8. After "Common stock outstanding after the offering," please add a separate paragraph that discloses that your sole executive officer-director holds % of your shares, and as a result will exercise control over your direction.
In The Offering table on page 3, we included a section that discloses the percentage ownership of the common stock outstanding after the offering of our sole officer-director and indicates that he will exercise control of our direction.
9. In connection with terms of the offering, please indicate that the offering will terminate in no later than 12 months.
In connection with terms of the offering, we have indicated that the offering will terminate no later than 12 months after the effective date of this offering.
10. Please add a separate paragraph which indicates the absence of a public market for the common shares and warrants and briefly explains how the absence of a public market impacts liquidity.
We have added the following paragraph on page 3 to indicate the absence of a public market and how it impacts liquidity:
"There is no public market for our common shares and warrants and there can be no assurance that a public market for our common stock and warrants will ever develop. Without a public market, there will be no liquidity in your investment in our securities which means that you may be unable to resell your common shares and warrants, and if you are able to resell them, you may not be able to recover your investment."
Risk Factors, page 4
Because of state securities registration requirements, the transferability of ..., page 7
11. We note that you plan on submitting an application for listing in one of the "recognized securities manuals" within 30 days prior to the completion of this offering. Please clarify that you are uncertain as to when this offering will be completed and that it might be open for a longer period of time than anticipated.
In the risk factor, we added the following clarifying statement:
"We are uncertain as to when this offering will be completed and that it might be open for a longer period of time than anticipated, possibly up to 12 months after the effective date of this offering."
Determination of the Offering Price, page 12
12. You state that you "arbitrarily selected" the offering price of $5.10 per unit. It is therefore important that the disclosure be clear and concise about how you did select an offering price per share. Accordingly, please revise to disclose all factors you considered. For each factor you cite, briefly explain how these factors affected your determination of the offering price. See Item 505 of Regulation S-B.
We have added the following language disclosing the factors considered to determine the offering price:
"Among the factors considered were our lack of operating history; the proceeds to be raised by the offering; the amount of capital to be contributed by purchasers in this offering in proportion to the amount of stock to be retained by our existing shareholders; our belief in the future economic prospects of the Company; and our relative cash requirements."
Business, page 14
13. Please expand this section to provide detailed information concerning your operations. This would include the status of any discussions with creative personnel, selection of movie scripts, interviews with potential actors, consultants, etc. Please include specific information regarding all activities to clearly describe the company's status. If no progress has been made, so state. This description may also need to be addressed in the risk factors section. Please clearly specify what steps you have taken to date, what steps you need to take to advance your business and what is required to make those advancements. Also, expand your disclosure to address in more detail how you will fund your operations and how you will fund your capital requirements if proceeds from this offering fall short of expectations. We may have further comments based upon your revisions.
The following language has been added to the Business section to discuss our activities since inception:
"To date, no significant progress has been made to further our business plan; however, we have devoted considerable effort to develop parameters for digital film concepts and technologies that would be appropriate to consider when sufficient resources are available. Our digital film concepts must be translated into films that can be created within our strict budgetary requirements. These requirements limit the narrative possibilities of our films and require us to take advantage of opportunities, namely talent and locations that will not consume unnecessary funds from a film budget and will be available at the moment of production.
"In addition to developing the parameters for our potential films, our president has been developing professional relationships with filmmaking resources including actors and technicians, both amateur and professional; writers; musicians; film festival organizers; equipment rental companies; and production and equipment insurance companies."
In the Plan of Operation, we've added the following language to detail how we will fund our operations if this offering falls short of expectations:
"If we are unable to raise at least $75,000 in this offering, we expect to borrow funds from a bank or other financial institution to satisfy our minimum cash requirements to initiate operations and produce our first film property. If we are unable to borrow funds from a bank or other financial institution, our president and sole-director, Avery Pack, has agreed to lend us the funds, up to $75,000, for a minimum term of 12 months with an interest rate equivalent to the Citibank, N.A. prime rate."
Additionally, we have added the risk factor entitled, "Because we may be unsuccessful in raising at least $75,000 from this offering to produce our first motion picture and to satisfy our liquidity needs for the next 12 months, we may be unable to commence operations and pursue our business plan."
Plan of Operation, page 14
14. Since your offering is being completed on a best-efforts basis, please revise your disclosure to address how the company intends to satisfy its liquidity needs over the next twelve months under at least the three offering levels presented. See Item 303(a) of Regulation S-B. Under each scenario, please ensure that you discuss in more detail the line item expenditures listed in the application of proceeds table on page 10.
We have added the following language to the Plan of Operation section:
"If we raise 25% of the maximum offering, or $125,000, we will be able to create one film property and associated promotional website. After offering expenses, we will have available $101,250 for motion picture production; $5,625 to develop a promotional website; and $5,625 for working capital.
"If we raise 50% of the maximum offering, or $250,000, we will be able to create two film properties and associated promotional websites. After offering expenses, we will have available $211,500 for motion picture production; $11,750 to develop promotional websites; and $11,750 for working capital.
"If we raise 100% of the maximum offering, or $500,000, we will be able to create four film properties and associated promotional websites. After offering expenses, we will have available $436,500 for motion picture production; $24,250 to develop promotional websites; and $24,250 for working capital.
"If we are to able to raise at least 25% of the maximum offering, or $125,000, we will satisfy our liquidity needs over the next 12 months. If we raise more than 25% of the maximum offering, our liquidity for the next 12 months will likewise be satisfied; however, we will be able to produce additional film properties and related websites in the 12 month period. For example, if we raise 50% of the maximum offering, we will be able to produce two film properties in the 12 month period; or, if we raise 100% of the maximum offering, we will be able to produce four film properties in the 12 month period."
In addition, the following paragraph has been added to the Plan of Operation as well:
"If we are unable to raise at least $75,000 in this offering, we expect to borrow funds from a bank or other financial institution to satisfy our minimum cash requirements to initiate operations and produce our first film property. If we are unable to borrow funds from a bank or other financial institution, our president and sole-director, Avery Pack, has agreed to lend us the funds up to $75,000 for a minimum term of 12 months with an interest rate equivalent to the Citibank, N.A. prime rate.
Properties, page 15
15. The website address provided on the bottom of page 15 does not seem to be operational. Please tell us, with a view toward disclosure, the status of your website.
Our website is now operational. Currently, the website offers limited information related to our offering and a basic description of our business.
Industry Overviews, page 16
16. Please review this section to ensure that you identify the sources for the industry data that you provide. Currently, you include many factual statements, but you have not indicated whether the source of this information is based upon management's belief, industry data, scientific reports or any other source. Please revise accordingly. If the information is based upon reports, articles, or studies, please provide these documents to us appropriately marked and dated. If