SEC Company Response from Bigstring CORP (CIK 0001335282) — Oct 21, 2005
Bigstring CORP (CIK 0001335282)
Date: Oct. 21, 2005 · CIK: 0001335282 · Accession: 0000914317-05-003212
AI Filing Summary & Sentiment
File numbers found in text: 333-127923
Letter
BIGSTRING CORPORATION File No. 333-127923
--------------------------------------------------------------------------------
MEMORANDUM SUMMARIZING SEC COMMENTS ON BIGSTRING CORPORATION REGISTRATION STATEMENT ON FORM SB-2 Filed August 29, 2005 AND RESPONSES THERETO
--------------------------------------------------------------------------------
Terms used herein without definition, shall have the same meaning assigned to them in the prospectus.
General Comments ----------------
1. Comment - We note your use of the term "Company" throughout the ------- prospectus. Since this term is vague and abstract, please revise to use your actual company name or a shortened version of it throughout your document.
Response - We have revised the prospectus in accordance with the Staff's -------- comment.
2. Comment - Please provide us with copies of any graphics, maps, ------- photographs, and related captions or other artwork including logos that you intend to use in the prospectus.
Response - BigString will not be including any logos, graphics, maps, -------- photographs or other artwork in the prospectus.
3. Comment - Please provide us with highlighted copies of any study or report ------- that you cite or on which you rely. For example, we note on page 25 that you refer to statistics obtained from Jupiter Communications and International Data Corp. Confirm with us that the industry reports or studies that you rely on were not prepared for you and that you did not compensate the party that prepared these reports or studies. Alternatively, if the reports were prepared for you, please file the experts' consents as Exhibits.
Response - Although none of the industry reports or statistics that we -------- have relied upon in the prospectus were prepared for BigString, nor did we compensate, in any way, the parties that prepared the cited reports and studies, we have decided to delete all information supported by such reports and/or studies due to the constant changing of such information. We believe that the prospectus provides adequate disclosures about our company and markets without the need for the deleted information and citations.
4. Comment - Please avoid vague assertions that are in the nature of ------- "puffing." The basis for comparative factual assertions and for management's belief in qualitative statements must be clear from the text of the registration statement or provided to us. Revise the disclosure throughout the document to disclose the measurements you are using to
<PAGE>
support your statements, or advise us as necessary. In providing support, clearly mark the location of the information you believe is supportive of the statement referenced. We note, for example, and without limitation:
o "we believe that our BigString email service is currently the only email service that is recallable and cancelable." (page 3)
o "the premium email service products market is a rapidly growing segment of the overall email service market." (page 23)
o "we expect to attract a large number of customers who will want to try our unique BigString email service products." (page 23)
o "we believe we will generate significant advertising revenue." (page 23)
o "over 80% of all small and medium-sized business had Internet connectivity, and almost 100% of business with over 20 employees had Internet connectivity" (page 26)
Please revise or advise as appropriate.
Response - We have revised the prospectus to address the Staff's concerns. --------
Facing Page -----------
5. Comment - We note that your securities will be sold on a continuous basis. ------- As a result, please add a Rule 415 box to the facing page of your registration statement noting that the securities being registered on your Form SB-2 are being offered on a delayed or continuous basis. Refer to the Division of Corporation Finance Manual of Publicly Available Telephone Interpretations, Section D, paragraph 36.
Response - We have revised the facing page of the registration statement -------- in accordance with the Staff's comment.
Prospectus Cover Page ---------------------
6. Comment - You state that "the selling stockholders will offer their shares ------- of common stock covered by this prospectus at a price of $0.48 per share until the earlier of (1) ninety days following the date of this prospectus, and (2) the inclusion of [your] common stock on the Nasdaq Over-the-Counter Bulletin Board Trading System." If you fail to have your securities quoted on the Bulletin Board, please tell us why you do not believe that allowing selling securityholders to resell your common stock at any price after 90 days does not constitute a delayed offering. Please be aware that, in order to register a delayed offering, the company must be S-3 eligible. Alternatively, please revise to disclose that selling securityholders must resell their securities at a fixed price unless and until a market for your common stock develops and thereafter at market prices.
Response - We have revised the prospectus in accordance with the Staff's -------- comment.
<PAGE>
7. Comment - Please revise to highlight the cross-reference to the "Risk ------- Factors" section so that it is visually distinctive from the surrounding text. We refer to Item 501(a)(5) of Regulation S-B.
Response - The cross reference to the "Risk Factors" section is in bold -------- print which we believe highlights such cross reference and makes it visually distinctive from the surrounding text.
Prospectus Summary ------------------
8. Comment - Please revise the summary so that it provides a balanced ------- overview of the company, its operations and the proposed offering. We note, for example, that you have highlighted the features of your email services that you believe provide you with a competitive advantage as well as the cash raised in private offerings, but have not included an overview of your financial condition and history of net losses. Please revise accordingly.
Response - We have revised the Prospectus Summary in accordance with the -------- Staff's comment.
9. Comment - On page 23 and in this section, you compare yourself to "other ------- leading email service providers." The term "leading" is vague and abstract. Please revise to clarify your use of this term and provide us with current industry data that supports your assertions. In providing support, clearly mark the location of the information you believe is supportive of the statement referenced. Your disclosure should clarify the extent and nature of your competition and your relative industry position in a manner consistent with Item 101(b)(4) of Regulation S-B.
Response - We have revised the prospectus by deleting the reference to -------- "other leading email service providers."
Risk Factors, page 6 --------------------
General -------
10. Comment - We refer to the introductory paragraph on page 9 where you ------- indicate that you may face other risks or uncertainties currently unknown to you or that you currently deem to be immaterial which may adversely affect your business. You must disclose all risks that you believe are material at this time. Please delete language related to other risks or unknown risks from your disclosure.
Response - We have revised the prospectus in accordance with the Staff's -------- comment.
11. Comment - Please revise to either underline or italicize your risk factor ------- subheadings so that the subheadings are easily distinguished from the risk factor narratives.
Response - Our risk factor subheadings are in bold print which we believe -------- easily distinguishes such subheadings from the risk factor narratives.
<PAGE>
12. Comment - Please include a risk factor related to the risk that hackers, ------- viruses and other potential security breaches pose to your business.
Response - We have revised the prospectus to include a risk factor related -------- to the risk that hackers, viruses and other potential security breaches pose to our business.
13. Comment - On page 8, you state that "[a]lthough we believe that our ------- technology has been developed independently and does not infringe on the patents of others." Mitigating statements are not appropriate in the risk factor discussion. Please revise your risk factors to remove all mitigating language.
Response - We have revised the risk factors in accordance with the Staff's -------- comment.
14. Comment - Please avoid using generic conclusions such as "adversely ------- affected" or similar language when describing a risk's effects. For example, on page 9 you state that "[i]f any of the foregoing were to occur, our business could be materially adversely affected." Replace this, and similar language, with more detailed disclosure of how you, your business, financial condition and results of operations would be affected by the facts you describe.
Response - We have revised the prospectus in accordance with the Staff's -------- comment.
15. Comment - You note on page 18, that any additional equity financing may ------- involve substantial dilution to your then-existing stockholders. We also note, on page II-10, that you have a number of outstanding warrants. Please add a risk factor noting the risk of dilution your shareholders face should you issue additional shares in an equity financing or should the warrants be exercised.
Response - We have revised the prospectus to include a risk factor with -------- respect to dilution.
16. Comment - On page 26, you note that the "markets for [your] services are ------- highly competitive. With limited barriers to entry [you] believe the competitive landscape will continue to increase both from new entrants to the market as well as from existing players." Please revise to add a risk factor noting the competitiveness of your market and limited barriers to entry.
Response - We have revised the prospectus to include a risk factor which -------- notes the competitiveness of our market and the limited barriers to entry thereto.
We cannot assure you that we will become profitable since we have a limited --------------------------------------------------------------------------- operating history, insignificant revenue and plan to increase our expenses to ----------------------------------------------------------------------------- develop our business, page 6. -----------------------------
<PAGE>
17. Comment - Please revise this risk factor to note your history of loses and ------- your accumulated deficit.
Response - We have revised this risk factor in accordance with the Staff's -------- comment.
We may need additional capital to fund our operations until we are able to -------------------------------------------------------------------------- generate a profit, page 6. --------------------------
18. Comment - Please revise to note your cash balance as of the most recent ------- practicable date and to provide an estimate of your cash needs during the twelve months following the date of this prospectus.
Response - We have revised this risk factor in accordance with the Staff's -------- comment.
We are dependent upon maintaining and expanding our computer..., page 7 -----------------------------------------------------------------------
19. Comment - To the extent that you have experienced interruptions in your ------- service or system downtimes, please briefly discuss the frequency and duration of these events.
Response - We have revised this risk factor in accordance with the Staff's -------- comment.
If we were to lose the services of our key personnel, we may not be able to --------------------------------------------------------------------------- execute our business strategy which could result in the failure of our business, -------------------------------------------------------------------------------- page 7. -------
20. Comment - We note on page 31, that you do not have any employment ------- agreements with any or your officers or employees. Please revise this section to note this fact.
Response - We have revised this risk factor to note that we do not have -------- any employment agreements with any of our officers or employees. We have also revised this risk factor by disclosing that we have non-disclosure, non-competition and assignment of inventions agreements with our key technology support personnel.
Our patent application may not be granted, page 8 -------------------------------------------------
21. Comment - Please briefly discuss the consequences to your ability to offer ------- your services if your patent application is denied.
Response - We have revised this risk factor in accordance with the Staff's -------- comment.
Misappropriation of our intellectual property could harm our reputation, ------------------------------------------------------------------------ affecting our competitive position and resulting in us having to expend money, ------------------------------------------------------------------------------ page 8. -------
22. Comment - We refer to your statement that, "We rely on a combination of ------- U.S. and foreign patents, copyrights, trademark and trade secret laws." Please expand your disclosure to indicate the nature of the patents, copyrights, trademarks and trade secrets that you rely upon, including the foreign jurisdictions in which you operate.
<PAGE>
Response - We have revised this risk factor in accordance with the Staff's -------- comment.
23. Comment - Please advise us supplementally whether you require your ------- employees to enter into confidentiality or non-compete agreements with respect to your proprietary technology. If not, please revise the risk factor discussion to include this.
Response - We require key technology support personnel (i.e., employees -------- with access to sensitive information which relates to our technology) to enter into non-disclosure, non-competition and assignment of inventions agreements.
Since there is no trading market for our common stock, you may not be able to ----------------------------------------------------------------------------- resell any of the shares you purchase or may have t
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
BIGSTRING CORPORATION
File No. 333-127923
--------------------------------------------------------------------------------
MEMORANDUM SUMMARIZING SEC
COMMENTS ON
BIGSTRING CORPORATION REGISTRATION STATEMENT ON FORM SB-2
Filed August 29, 2005
AND RESPONSES THERETO
--------------------------------------------------------------------------------
Terms used herein without definition, shall have the same meaning assigned
to them in the prospectus.
General Comments
----------------
1. Comment - We note your use of the term "Company" throughout the
-------
prospectus. Since this term is vague and abstract, please revise to use
your actual company name or a shortened version of it throughout your
document.
Response - We have revised the prospectus in accordance with the Staff's
--------
comment.
2. Comment - Please provide us with copies of any graphics, maps,
-------
photographs, and related captions or other artwork including logos that
you intend to use in the prospectus.
Response - BigString will not be including any logos, graphics, maps,
--------
photographs or other artwork in the prospectus.
3. Comment - Please provide us with highlighted copies of any study or report
-------
that you cite or on which you rely. For example, we note on page 25 that
you refer to statistics obtained from Jupiter Communications and
International Data Corp. Confirm with us that the industry reports or
studies that you rely on were not prepared for you and that you did not
compensate the party that prepared these reports or studies.
Alternatively, if the reports were prepared for you, please file the
experts' consents as Exhibits.
Response - Although none of the industry reports or statistics that we
--------
have relied upon in the prospectus were prepared for BigString, nor did we
compensate, in any way, the parties that prepared the cited reports and
studies, we have decided to delete all information supported by such
reports and/or studies due to the constant changing of such information.
We believe that the prospectus provides adequate disclosures about our
company and markets without the need for the deleted information and
citations.
4. Comment - Please avoid vague assertions that are in the nature of
-------
"puffing." The basis for comparative factual assertions and for
management's belief in qualitative statements must be clear from the text
of the registration statement or provided to us. Revise the disclosure
throughout the document to disclose the measurements you are using to
<PAGE>
support your statements, or advise us as necessary. In providing support,
clearly mark the location of the information you believe is supportive of
the statement referenced. We note, for example, and without limitation:
o "we believe that our BigString email service is currently the only
email service that is recallable and cancelable." (page 3)
o "the premium email service products market is a rapidly growing
segment of the overall email service market." (page 23)
o "we expect to attract a large number of customers who will want to
try our unique BigString email service products." (page 23)
o "we believe we will generate significant advertising revenue." (page
23)
o "over 80% of all small and medium-sized business had Internet
connectivity, and almost 100% of business with over 20 employees had
Internet connectivity" (page 26)
Please revise or advise as appropriate.
Response - We have revised the prospectus to address the Staff's concerns.
--------
Facing Page
-----------
5. Comment - We note that your securities will be sold on a continuous basis.
-------
As a result, please add a Rule 415 box to the facing page of your
registration statement noting that the securities being registered on your
Form SB-2 are being offered on a delayed or continuous basis. Refer to the
Division of Corporation Finance Manual of Publicly Available Telephone
Interpretations, Section D, paragraph 36.
Response - We have revised the facing page of the registration statement
--------
in accordance with the Staff's comment.
Prospectus Cover Page
---------------------
6. Comment - You state that "the selling stockholders will offer their shares
-------
of common stock covered by this prospectus at a price of $0.48 per share
until the earlier of (1) ninety days following the date of this
prospectus, and (2) the inclusion of [your] common stock on the Nasdaq
Over-the-Counter Bulletin Board Trading System." If you fail to have your
securities quoted on the Bulletin Board, please tell us why you do not
believe that allowing selling securityholders to resell your common stock
at any price after 90 days does not constitute a delayed offering. Please
be aware that, in order to register a delayed offering, the company must
be S-3 eligible. Alternatively, please revise to disclose that selling
securityholders must resell their securities at a fixed price unless and
until a market for your common stock develops and thereafter at market
prices.
Response - We have revised the prospectus in accordance with the Staff's
--------
comment.
2
<PAGE>
7. Comment - Please revise to highlight the cross-reference to the "Risk
-------
Factors" section so that it is visually distinctive from the surrounding
text. We refer to Item 501(a)(5) of Regulation S-B.
Response - The cross reference to the "Risk Factors" section is in bold
--------
print which we believe highlights such cross reference and makes it
visually distinctive from the surrounding text.
Prospectus Summary
------------------
8. Comment - Please revise the summary so that it provides a balanced
-------
overview of the company, its operations and the proposed offering. We
note, for example, that you have highlighted the features of your email
services that you believe provide you with a competitive advantage as well
as the cash raised in private offerings, but have not included an overview
of your financial condition and history of net losses. Please revise
accordingly.
Response - We have revised the Prospectus Summary in accordance with the
--------
Staff's comment.
9. Comment - On page 23 and in this section, you compare yourself to "other
-------
leading email service providers." The term "leading" is vague and
abstract. Please revise to clarify your use of this term and provide us
with current industry data that supports your assertions. In providing
support, clearly mark the location of the information you believe is
supportive of the statement referenced. Your disclosure should clarify the
extent and nature of your competition and your relative industry position
in a manner consistent with Item 101(b)(4) of Regulation S-B.
Response - We have revised the prospectus by deleting the reference to
--------
"other leading email service providers."
Risk Factors, page 6
--------------------
General
-------
10. Comment - We refer to the introductory paragraph on page 9 where you
-------
indicate that you may face other risks or uncertainties currently unknown
to you or that you currently deem to be immaterial which may adversely
affect your business. You must disclose all risks that you believe are
material at this time. Please delete language related to other risks or
unknown risks from your disclosure.
Response - We have revised the prospectus in accordance with the Staff's
--------
comment.
11. Comment - Please revise to either underline or italicize your risk factor
-------
subheadings so that the subheadings are easily distinguished from the risk
factor narratives.
Response - Our risk factor subheadings are in bold print which we believe
--------
easily distinguishes such subheadings from the risk factor narratives.
3
<PAGE>
12. Comment - Please include a risk factor related to the risk that hackers,
-------
viruses and other potential security breaches pose to your business.
Response - We have revised the prospectus to include a risk factor related
--------
to the risk that hackers, viruses and other potential security breaches
pose to our business.
13. Comment - On page 8, you state that "[a]lthough we believe that our
-------
technology has been developed independently and does not infringe on the
patents of others." Mitigating statements are not appropriate in the risk
factor discussion. Please revise your risk factors to remove all
mitigating language.
Response - We have revised the risk factors in accordance with the Staff's
--------
comment.
14. Comment - Please avoid using generic conclusions such as "adversely
-------
affected" or similar language when describing a risk's effects. For
example, on page 9 you state that "[i]f any of the foregoing were to
occur, our business could be materially adversely affected." Replace this,
and similar language, with more detailed disclosure of how you, your
business, financial condition and results of operations would be affected
by the facts you describe.
Response - We have revised the prospectus in accordance with the Staff's
--------
comment.
15. Comment - You note on page 18, that any additional equity financing may
-------
involve substantial dilution to your then-existing stockholders. We also
note, on page II-10, that you have a number of outstanding warrants.
Please add a risk factor noting the risk of dilution your shareholders
face should you issue additional shares in an equity financing or should
the warrants be exercised.
Response - We have revised the prospectus to include a risk factor with
--------
respect to dilution.
16. Comment - On page 26, you note that the "markets for [your] services are
-------
highly competitive. With limited barriers to entry [you] believe the
competitive landscape will continue to increase both from new entrants to
the market as well as from existing players." Please revise to add a risk
factor noting the competitiveness of your market and limited barriers to
entry.
Response - We have revised the prospectus to include a risk factor which
--------
notes the competitiveness of our market and the limited barriers to entry
thereto.
We cannot assure you that we will become profitable since we have a limited
---------------------------------------------------------------------------
operating history, insignificant revenue and plan to increase our expenses to
-----------------------------------------------------------------------------
develop our business, page 6.
-----------------------------
4
<PAGE>
17. Comment - Please revise this risk factor to note your history of loses and
-------
your accumulated deficit.
Response - We have revised this risk factor in accordance with the Staff's
--------
comment.
We may need additional capital to fund our operations until we are able to
--------------------------------------------------------------------------
generate a profit, page 6.
--------------------------
18. Comment - Please revise to note your cash balance as of the most recent
-------
practicable date and to provide an estimate of your cash needs during the
twelve months following the date of this prospectus.
Response - We have revised this risk factor in accordance with the Staff's
--------
comment.
We are dependent upon maintaining and expanding our computer..., page 7
-----------------------------------------------------------------------
19. Comment - To the extent that you have experienced interruptions in your
-------
service or system downtimes, please briefly discuss the frequency and
duration of these events.
Response - We have revised this risk factor in accordance with the Staff's
--------
comment.
If we were to lose the services of our key personnel, we may not be able to
---------------------------------------------------------------------------
execute our business strategy which could result in the failure of our business,
--------------------------------------------------------------------------------
page 7.
-------
20. Comment - We note on page 31, that you do not have any employment
-------
agreements with any or your officers or employees. Please revise this
section to note this fact.
Response - We have revised this risk factor to note that we do not have
--------
any employment agreements with any of our officers or employees. We have
also revised this risk factor by disclosing that we have non-disclosure,
non-competition and assignment of inventions agreements with our key
technology support personnel.
Our patent application may not be granted, page 8
-------------------------------------------------
21. Comment - Please briefly discuss the consequences to your ability to offer
-------
your services if your patent application is denied.
Response - We have revised this risk factor in accordance with the Staff's
--------
comment.
Misappropriation of our intellectual property could harm our reputation,
------------------------------------------------------------------------
affecting our competitive position and resulting in us having to expend money,
------------------------------------------------------------------------------
page 8.
-------
22. Comment - We refer to your statement that, "We rely on a combination of
-------
U.S. and foreign patents, copyrights, trademark and trade secret laws."
Please expand your disclosure to indicate the nature of the patents,
copyrights, trademarks and trade secrets that you rely upon, including the
foreign jurisdictions in which you operate.
5
<PAGE>
Response - We have revised this risk factor in accordance with the Staff's
--------
comment.
23. Comment - Please advise us supplementally whether you require your
-------
employees to enter into confidentiality or non-compete agreements with
respect to your proprietary technology. If not, please revise the risk
factor discussion to include this.
Response - We require key technology support personnel (i.e., employees
--------
with access to sensitive information which relates to our technology) to
enter into non-disclosure, non-competition and assignment of inventions
agreements.
Since there is no trading market for our common stock, you may not be able to
-----------------------------------------------------------------------------
resell any of the shares you purchase or may have t