SecProbe.io

CORRESP
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filename1.htm

    SICHENZIA
      ROSS FRIEDMAN FERENCE LLP

    61
      BROADWAY, NEW YORK NY 10006

    TEL
      212 930 9700 FAX 212 930 9725 WEB WWW. SRFF.COM

    July
      23,
      2007

    Securities
      and Exchange Commission

    100
      F
      Street, N.E.

    Washington,
      D.C. 20549

    Attention:
      H. Yuna Peng, Esq.

    Kristin
      Shifflett

    Mail
      Stop
      3561

    Re:
      Coda
      Octopus Group, Inc. (the “Company”)

    Registration
      Statement on Form SB-2

    File
      No. 333-143144

    Dear
      Ms.
      Peng:

    On
      behalf
      of the Company, we are hereby enclosing two copies of Amendment No. 1 to the
      Company’s registration statement on Form SB-2 (the “Registration Statement”)
      that was filed on May 22, 2007.

    By
      letter
      dated June 18, 2007, the staff of the Securities and Exchange Commission (the
      “Staff”) issued comments on the Registration Statement. Following are the
      Company’s responses to the Staff’s comments. For ease of reference, each
      response is preceded by the Staff’s comment.

    Prospectus
      Cover Page

    1.
      Please highlight the risk factors cross-reference by prominent type.

    The
      Company has made revisions in accordance with the Staff’s comment.

    Outside
      Back Cover Page of Prospectus

    2. Please
      include the dealer prospectus delivery obligation language required by Item
      502(b) of Regulation S-B.

    The
      Company advises the Staff that this is not an underwritten offering and
      therefore the requested language is inappropriate to be included.

    Prospectus
      Summary, page 1

    3. Revise
      the first sentence under General to make “are expected” active voice so
      investors can judge who expects the development you discuss.

    The
      Company has made revisions in accordance with the Staff’s comment.

    4. Revise
      the first bullet on page 1 to disclose your $2.5 million loss on $2.7 revenues
      for the first quarter of ‘07 so investors can have a context to understand the
      rest of the bullet.

    In
      response to comment No 6, the Company has added a paragraph providing disclosure
      respecting the Company’s revenues and losses for the most recent audited as well
      as unaudited stub periods which it believes provides sufficient context to
      understand the entire summary.

    5. You
      state that you believe that you have the ability to capitalize on the
      opportunity as a result of “first mover advantage in 3-D sonar markets.” Please
      provide the basis for the claim. In this regard, we note the first risk factor
      on page 6 discusses that there are competitor with substantial longer operating
      histories and greater name recognition.

    The
      Company has made revisions in accordance with the Staff’s comment. See pages 1
      and 19 of the Registration Statement.

    6. Please
      expand this section to disclose the amount of your net loss for the most recent
      audited and interim periods. Additionally, disclose the amount of your working
      capital and the amount of your accumulated deficit. We believe this financial
      snapshot will provide a useful context to help investors interpret the rest
      of
      the summary.

    The
      Company has made revisions in accordance with the Staff’s comment.

    Acquisitions,
      page 2

    7. Revise
      the first paragraph for clarity. Is the $286,000 in common stock part of the
      purchase price you might be obligated to pay?

    The
      Company has made revisions in accordance with the Staff’s comment. See page 2 of
      the Registration Statement.

    Risk
      Factors, page 3

    8. Please
      delete the fourth sentence of the opening paragraph. If you know of additional
      material risks, please identify them.

    The
      Company has made revisions in accordance with the Staff’s comment.

    9. We
      note your discussion regarding increased reliance on sales to government
      agencies. Please disclose whether any of your key customers account for 10%
      or
      more of your revenues for the last fiscal year and if so, please name them
      and
      give the percentage.

    The
      Company has made revisions in accordance with the Staff’s comment. See pages 4,
      25 and 26 of the Registration Statement.

    We have incurred
      significant losses to date, page 3

    10. Include
      your stub period losses here.

    The
      Company has made revisions in accordance with the Staff’s comment.

        2

    Management’s
      Discussion and Analysis or Plan
      of Operation,
      pag&9

    General

    11. Please
      explain what you mean by “disruptive technology qualities.”

    The
      Company has made revisions in accordance with the Staff’s comment. See page 10
      of the Registration Statement.

    Results
      of Operations.
      Page 11

    12. We
      generally believe that your discussion of financial results between periods
      can
      be further enhanced with the presentation of a table showing summarized
      financial results for the periods under consideration. We believe that this
      type
      of presentation provides the reader further clarification. As such,
      consideration should be given to adding a table that would provide a comparison
      of financial results between periods. Please refer to Section III.A.
      (Presentation of MD&A) in FRR-72 (Release No-
      33-8350).

    The
      Company has added a table in accordance with the Staff’s comment.

    13. In
      the Employment Agreements section, starting on page 31, we noted that several
      of
      your key employees were granted significant salary increases effective November
      1, 2006. As these increases will represent a material change in your selling,
      general and administrative expenses in future periods, please discuss these
      changes as items that will have an effect on future operations.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 14
      of the Registration Statement.

    Liquidity and Capital Resources.
      Page 12

    14. If
      you have a plan to reduce your losses or become profitable, we encourage you
      to
      discuss it here.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 16
      of the Registration Statement.

    Inflation
      and Foreign
      Currency, page 13

    15. It
      appears that a significant amount of your business is transacted in foreign
      currency, mainly the pound sterling and the Norwegian kroner. Please revise
      your
      foreign currency disclosure to include the approximate amount of your business
      that is impacted by changes in foreign currency as well as a sensitivity
      analysis for changes (e.g. 10%) that may occur between the U.S. dollar and
      the
      foreign currencies.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 16
      of the Registration Statement.

        3

    Financing
      Activities. page 14

    16. Based
      upon your statement of stockholders’ equity on page F4, it appears that some of
      the Series A Preferred Stock was issued in exchange for debt, and not solely
      for
      cash consideration. Please revise your disclosure so that it is consistent
      with
      information presented in your financial statements and throughout the document.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 17
      of the Registration Statement.

    Business,
      page 15

    17. Please
      revise the disclosure to include a discussion of the information required by
      Items 101(b)(5), (6), (8), and (9).

    The
      Company has made revisions in accordance with the Staff’s comment. See page 27
      of the Registration Statement.

    18. For
      each of the products you discuss, please disclose the price or price range
      you
      charge.

    The
      Company has made revisions in accordance with the Staff’s comment. See pages
      22-24 of the Registration Statement.

    Outstanding
      Equity Awards and Director Compensation Tables, page
      31

    19.
       Please
      revise to fully comply with Items 402(d) and (e) of Regulation S-B.

    The
      Company has made revisions in accordance with the Staff’s comment. See pages 34
      and 35 of the Registration Statement.

    Security
      Ownership of Certain Beneficial Owners and Management, page
      37

    20. Please
      disclose the percentage of ownership for Vision Opportunity. We note footnote
      11
      states that the percentage ownership for Vision Opportunity Master Fund reflects
      a 9.9% ownership limitation provision.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 41
      of the Registration Statement.

    21. Please
      identify the beneficial owner(s) for Vision Opportunity Master Fund. We refer
      you to Instruction 4 to Item 403 of Regulation S-B.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 41
      of the Registration Statement.

    22. We
      note that there is a 4.9% ownership limitation with each of the beneficial
      owners, but the limitation may be changed to 9.9%. Please advise whether and
      how
      you will update the beneficial ownership table.

    The
      Company advises the Staff supplementally that if any of the investors exercise
      their right to waive the 4.9% limitation prior to the effectiveness of the
      Registration Statement, the Company will reflect such waiver and the resulting
      increased ownership percentage in a pre-effective amendment to the extent
      required to be filed in response to Staff comments or to update other material
      disclosures.

        4

    Certain
      Relationships and Related Transactions, page 43

    23. On
      May 10, 2007, the company repurchased 18,181 shares of Series B preferred Stock
      from Vision at a purchase price of $110 per share for a total of $1,999,990.
      Please disclose the approximate dollar value of the amount of the related
      party’s interest in the transaction. See 404(a)(4) of Regulation S-B. Please
      revise accordingly for all of the related party transactions disclosed in this
      section.

    The
      Company has made revisions in accordance with the Staff’s comment. See page 47
      of the Registration Statement.

    Series
      B Preferred Stock, page 45

    24. Your
      disclosure states that there is currently no Series B Preferred Stock issued.
      However, based on the information provided on page 14 and in your statement
      of
      stockholders’ equity, there appears to be Series B Preferred Stock issued and
      outstanding. Please revise for consistency throughout the filing.

    The
      Company advises the Staff that the disclosures in the statements of
      stockholders’ equity speak as of the respective dates set forth in the financial
      statements. Shares of Series B Preferred Stock were issued and outstanding
      as of
      those dates. The disclosures in the forepart of the Registration Statement
      speak
      as of more recent dates when those shares had been repurchased and
      cancelled.

    Consolidated
      Statements of Operations and Comprehensive Loss For the Years Ended October
      31,
      2006 and 2005, page F-3

    25. Please
      tell us what types of expenses are classified as “Non-recurring expenses” within
      your operating expenses section. If the expenses classified as such are expenses
      that are incurred within the normal operations of the business, please modify
      the caption to “Other operating expenses” with appropriate note disclosure of
      its components or label the caption with the specific nature of these expenses.
      We believe this will provide enhanced understanding and detail to readers of
      your financial statements.

    The
      Company advises the Staff that the non-recurring expenses incurred during the
      year ended October 31, 2006 were primarily related to the due diligence and
      acquisition of Martech and were comprised primarily of consulting, legal,
      financial advisory and accounting fees.

    Accordingly,
      the company has made the following additional financial footnote
      disclosure:

    Note
      12 -
      Other Operating Expenses

    During
      the years ended October 31, 2006 and 2005, the Company incurred other operating
      expenses comprised of professional
      and legal fees incurred in connection with the acquisition of Martech and
      related financial advisory services.

        5

    Consolidated
      Statements of Cash Flows. pages F-5 and F-17

    26. Reference
      is made to your fiscal 2006 and interim (January 2007) reconciliation of
      operating activities cash flows that begins with the amount of “Net Loss
      Applicable to Common Shares, “rather than the amount for “Net Loss” In
      accordance with the guidance in paragraph 28 of SPAS 95, please begin with
      the
      amount of Net Loss as reported in your consolidated statement of operations
      in
      reconciling to net cash (used) / generated by operating activities. In this
      regard, the financing activity section will include payments of cash dividends
      on preferred stock and gross proceeds on sale of equity securities with a
      beneficial conversion feature. Please revise the operating activities section
      in
      the annual and interim Consolidated Statements of Cash Flows, accordingly.

    The
      Company has revised the annual and interim consolidated statements of cash
      flows
      to begin with the amount of net loss as reported in the consolidated statements
      of operations in accordance with the Staff’s comment. The Company has also
      included payment of cash dividends on preferred stock and gross proceeds on
      the
      sale of equity securities with the beneficial conversion feature.

    27. We
      note that your first and third paragraph in the Supplemental Disclosures contain
      statements that appear to be incomplete. Please revise.

    The
      Company has made revisions in accordance with the Staff's comment.

    Note
      1 — Significant Accounting Policies (Stock Based
      Compensation) — page F-8

    28. We
      note your audit opinion states that you have adopted the provisions of SPAS
      123(R) as of January 1, 2006. However, your stock-based compensation footnote
      references the guidelines of SFAS 123, and your accounting under SFAS 123(R)
      is
      not evident. Please revise to discuss your implementation of SPAS 123(R), both
      here and in the interim period footnotes. In addition, please revise to include
      the current year effect of the change on your financial statements due to the
      implementation of SFAS 123(R), as well as the disclosures required by paragraph
      84 of SPAS 123(R). Please also revise the Critical Accounting Policies
      discussion in MD&A (page 11), accordingly.

    The
      Company has made revisions in accordance with the Staff’s comment. See page F-8
      of the financial statements included in the Registration Statement.

    Note 2— Fixed Assets. page F-9

    29. Please
      revise to ensure that the information presented in the charts agrees with your
      balance sheet as of October 31, 20(b. Additionally, we note that the
      reconciliation of Property and Equipment presented shows a change in accumulated
      depreciation of ($246,141) from 2005 to 2006, while you disclose that you
      record