SEC Comment Letter for RNS SOFTWARE, INC. (CIK 0001341319) — Nov 25, 2005
RNS SOFTWARE, INC. (CIK 0001341319)
Date: Nov. 25, 2005 · CIK: 0001341319 · Accession: 0000000000-05-059400
AI Filing Summary & Sentiment
File numbers found in text: 333-129388
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November 22, 2005
Mail Stop 6010
Livio Susin
RNS Software, Inc.
2197 West 2nd Avenue Suite 103
Vancouver, B.C. V5K 1H7
Canada
Re: RNS Software, Inc.
Registration Statement on Form SB-2
Filed November 2, 2005
File No. 333-129388
Dear Mr. Susin:
We have the following comments to your filing. 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.
Please understand that 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. We 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.
Summary
1. Please briefly explain the nature of the "customer database"
you
will be selling to potential customers.
2. Please clarify whether you have sold any of your products to
date.
3. We note your references to Internet addresses, including your
own
internet address, here and on pages 11, 13 and 14. Please see
footnotes 41-43 and the related text of SEC Release 33-7856 (April
28, 2000) regarding your responsibility for hyperlinked
information
and the related filing requirements.
4. Please briefly describe the nature of your "business plan,"
including your activities for the next 12 months if your "business
plan" differs from the discussion of your Plan of Operations on
page
15.
5. If your offering is limited to sales in certain states, please
identify those states.
Risk Factors, page 3
6. Please evaluate each of your subheadings and the text that
follows
to ensure that your risk factors clearly and specifically state
the
material risk to investors that is a consequence of the condition
or
uncertainty that you identify. Several of your risk factor
captions
are too vague and generic to adequately describe the risk that
follows or merely allude to the risk rather than disclose the risk
and the possible result of the risk. If a risk factor is included
in
your prospectus, you should describe the risk and its result
clearly
and concretely and include the nature of the specific risk or harm
in
your subheadings. Readers should be able to read the risk factor
headings and come away with a strong understanding of what the
risk
is and the result of the risk as it specifically applies to you.
Refrain from merely stating facts or describing events that may
occur
in the future in your subheadings. For example, but without
limitation, the risk factor "Our revenues are difficult to
predict..." does not disclose a specific risk to investors
regarding
your business prospects. Revise to disclose the risk that results
from the inability to predict revenues from period to period.
Similarly, the risk factors "We may not be able to compete...;"
"We
lack long-term client subscriptions...;" "If we don`t respond to
rapid technological change..." and "We have only limited
protection
of our proprietary rights..." do not describe risks to investors.
Revise your risk factor subheadings to disclose the risks that
result
from the conditions you describe.
Use of Proceeds, Page 9
7. Please clearly describe the proceeds to be paid to affiliates,
including a description of the technology acquired through the
technology purchase agreement from your CEO.
8. You indicate in the third paragraph on page 10 that if you
"exceed
the minimum" you intend to expend various amounts on maintenance
of
your website, marketing and software development. Revise your
disclosure to clarify the priority of such expenditures. For
example, if you exceed the minimum by $3,000, will that entire
amount
be spent on maintaining your website or will it be allocated among
the activities listed above?
Description of Business, page 10
9. Please describe the intellectual property rights, including
trademarks, Mr. Susin sold to you pursuant to the technology
purchase
agreement dated May 6, 2005. Please indicate whether these
trademarks are registered. Also, please briefly explain how the
customer database was compiled.
10. Revise your disclosure to explain the nature of the "SEC
Doctor
Search Engine Affiliate Program" referred to on your web site.
Compensation, page 17
11. Please reconcile your disclosure that you have agreed to pay
Mr.
Susin up to $12,000 per year for management services with the
disclosure that you value Mr. Susin`s management services at $400
per
month. Please provide the compensation table as required by Item
402
of Regulation S-B
12. Please explain how you are able to conclude that "there are no
formal employment arrangements in place." We note that you "have
agreed to pay Mr. Susin up to $12,000 per year for his management
services," that the services are "valued at $400 per month" and
that
you "have agreed to reimburse Mr. Susin for expenses incurred" on
your behalf. Please file as exhibits any compensation agreements
with Mr. Susin, whether oral or written. Please see Item
601(b)(10)(ii)(A) of Regulation S-B.
13. Revise your disclosure to better explain what is meant by the
statement "We do not anticipate formalizing this arrangement."
Based
on the terms described in the preceding sentences of this
paragraph,
it would appear that such arrangement has been formalized.
Market for Common Stock, page 19
14. You state you have six shareholders. Please reconcile such
disclosure with your disclosure described in Item 26 on page 36.
Financial Statements, page 26
General
15. Please update the financial statements to include your most
recent interim period as required by Item 310(g) of Regulation S-
B.
16. Provide a currently dated consent from your independent public
accountants with your next amendment.
Note 1. Nature and Continuance of Operations
17. Please revise your filing to disclose your fiscal year.
Exhibits, page 36
18. Please file the Technology Purchase Agreement as an exhibit to
your registration statement. In addition, to the extent
applicable,
please also file the agreements memorializing the terms of the
$7,500
and the $12,500 loans from Mr. Susin to
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
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.
You may contact Tara Harkins at (202) 551-3626 or in her
absence, Michele Gohlke at (202) 551-3327 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Jay Mumford at (202) 551-3637 or me at (202) 551-
3444
with any other questions.
Sincerely,
Perry Hindin
Special Counsel
cc: Cletha A. Walstrand, Esq.
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